Evaluating the Minneapolis Neighborhood Revitalization Program’s Effect on Neighborhoods by Richard Holzer A Thesis Presented to the Faculty of the USC Graduate School University of Southern California In Partial Fulfillment of the Requirements for the Degree Master of Science (Geographic Information Science and Technology) May 2017 Copyright ® 2017 by Richard Holzer To my parents Table of Contents List of Figures ................................................................................................................................ vi List of Tables ............................................................................................................................... viii Acknowledgements ......................................................................................................................... x List of Abbreviations ..................................................................................................................... xi Abstract ......................................................................................................................................... xii Chapter 1 Introduction .................................................................................................................... 1 1.1 The Minneapolis Neighborhood Revitalization Program ....................................................1 1.1.1. Inception ....................................................................................................................1 1.1.2. Implementation ..........................................................................................................3 1.2 Motivation ............................................................................................................................6 1.3 Research Goals .....................................................................................................................8 1.4 Study Organization ..............................................................................................................8 Chapter 2 Background .................................................................................................................... 9 2.1 Evaluation of the Minneapolis Neighborhood Revitalization Program ...............................9 2.2 Related Work .....................................................................................................................12 2.2.1. Research about Neighborhood Quality ....................................................................12 2.2.2. Assessing the Effects of Community Development Projects ..................................13 2.3 Summary ............................................................................................................................16 Chapter 3 Methodology ................................................................................................................ 17 3.1 Research Design .................................................................................................................17 3.1.1. Data Sources ............................................................................................................17 3.1.2. Indicators..................................................................................................................18 3.1.3. Propensity Score Matching ......................................................................................21 3.1.4. Difference-in-differences Analysis ..........................................................................23 3.1.5. Regression Analysis .................................................................................................24 3.2 Regional Level Analysis ....................................................................................................28 3.2.1. Demographic and Housing Stock Characteristics....................................................28 3.2.2. Neighborhood Opinion ............................................................................................29 iv 3.3 City and Neighborhood Level Data Analysis ....................................................................30 3.3.1. Comparing Minneapolis and St. Paul ......................................................................31 3.3.2. Neighborhood Analysis ...........................................................................................32 Chapter 4 Results .......................................................................................................................... 39 4.1 Difference-in-differences ...................................................................................................39 4.2 Regression Testing .............................................................................................................50 Chapter 5 Discussion and Conclusion .......................................................................................... 55 References ..................................................................................................................................... 66 Appendix A: NRP Funding Allocations by Category ................................................................... 68 v List of Figures Figure 1: Neighborhoods by Type During Phase 2 in Minneapolis Source: (Minneapolis, PlanNet n.d.)............................................................................................... 5 Figure 2: Phase 1 Funding Allocations by Neighborhood Median Household Income and Type. Source: (Fagotto and Fung 2006) ................................................................................................... 6 Figure 3: Matched neighborhood pairs resulting from propensity score matching ...................... 22 Figure 4: Neighborhood Opinion from 1 (worst) to 10 (best) using data from the American Housing Survey Source: (U.S. Census Bureau 1992; U.S. Census Bureau 1995; U.S. Census Bureau 2000; U.S. Census Bureau 2009; U.S. Census Bureau 2015) .......................................... 30 Figure 5: Phase 1 Neighborhood Types Source: (Minneapolis, PlanNet n.d.) ............................. 35 Figure 6: Phase 1 Neighborhood Allocations in Dollars per Household Source: (Minneapolis, PlanNet n.d.)............................................................................................. 35 Figure 7: Hot spot Analysis of Income Change from 1990-2014 ................................................. 39 Figure 8: Hot spot Analysis of Home Value Change from 1990-2014 ........................................ 39 Figure 9: Hot spot Analysis of Rent Change from 1990-2014 ..................................................... 39 Figure 10: Hot spot Analysis of Vacancy Rate Change from 1990-2014 .................................... 39 Figure 11: Number of indicators in which each neighborhood showed improvement over St. Paul .................................................................................................................................. 42 Figure 12: Income Difference-in-differences Value by Neighborhood ........................................ 43 Figure 13: Home Value Difference-in-differences Value by Neighborhood ............................... 43 Figure 14: Rent Difference-in-differences Value by Neighborhood ............................................ 44 Figure 15: Vacancy Rate Difference-in-differences Value by Neighborhood ............................. 44 Figure 16: Hot spot Analysis of Difference-in-differences Values for Income ............................ 46 vi Figure 17: Hot spot Analysis of Difference-in-differences Values for Home Value ................... 46 Figure 18: Hot spot Analysis of Difference-in-differences Values for Rent ................................ 47 Figure 19: Hot spot Analysis of Difference-in-differences Values for Vacancy Rate ................. 47 Figure 20: Neighborhood Barriers and Difference-in-differences Values for Home Value ........ 59 vii List of Tables Table 1: American Housing Survey (AHS) Indicator Values for the Minneapolis-St. Paul Metropolitan Area 1989-2013....................................................................................................... 29 Table 2: Median Household Income for Renters and Owners in Minneapolis-St. Paul Metropolitan Area 1989-2013....................................................................................................... 29 Table 3: Population and Area of Minneapolis and St. Paul in 1990 ............................................. 31 Table 4: Comparison of Median Neighborhood Normalized Indicator Values in 1990 ............... 32 Table 5: Change of Mean Neighborhood Normalized Indicator Values from 1990-2014 ........... 32 Table 6: Average Indicator Values by Neighborhood Type ......................................................... 33 Table 7: Moran’s I Spatial Autocorrelation Results for Change in Indicator Value .................... 36 Table 8: Difference-in-Differences Summary Statistics ............................................................... 40 Table 9: T-Test Comparing Minneapolis and St. Paul by Indicator Value .................................. 40 Table 10: Moran’s I Spatial Autocorrelation by Indicator Difference-in-Differences Value ...... 45 Table 11: Mean Difference-in-differences Value by Neighborhood Type ................................... 48 Table 12: Mean Difference-in-differences Value per Dollar of Funding per Household by Neighborhood Type .....................................................................................................................