Estate renewal programmes have little impact on the local economy

27th January, 2015

Today we publish our review of estate renewal evidence.

Economic benefits are not the prime justification for estate renewal programmes, but they are often cited as a benefit in the policy-making process. However, our systematic evidence search found very few high quality impact evaluations that isolate the economic effect these programmes.

This is disappointing given the large amounts spent on these programmes. Of course, it is not entirely surprising. These projects are complex and take place over a long time frame (so key personnel may have moved on and priorities may have changed by the time that projects are completed). But our review shows that better evaluation of these projects is possible – if information on the programme is adequately recorded and attempts are made to make careful comparison to similar neighbourhoods that aren’t benefiting from the programme.

Despite the limited amount of evidence, a fairly clear set of messages about the wider impacts emerge from what evidence is available. In particular, while estate renewal programmes may improve the quality of housing and local amenities, the evidence suggests they tend to have little or no impact on the local economy.

As expected, investment does seem to increase property prices (at least for the properties that benefit from improvements), but any impacts on employment or income tend to be small or zero. Perhaps more surprisingly, the evidence also suggests that these programmes have limited impact on reducing crime, and improving health, well-being, and education.

Of course, it could be the case that a larger body of impact evaluation evidence would show positive impacts. But the existing evidence base is not encouraging.

It’s also important to remember that where we do see positive results, it’s important to distinguish carefully between effects on the local area and benefits to existing residents – as we discuss further in our briefing on public realm interventions.

None of this should undermine the case for estate renewal as a means of improving housing supply and local amenities. But it does highlight the importance of either focusing on those direct benefits or on trying to understand how policy design could be improved to help deliver better wider economic impacts. Better impact evaluation should play a central role in addressing this challenge.

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