Green Housing or Green Gentrification?

Research on green-certified buildings has often been focused on the benefits of green standards, such as energy efficiency, smart growth, resource conservation, and health protection. Recent studies suggest the adoption of a reductionist sustainability planning language can turn green-certified houses into luxury goods, attracting White, prime-age, college-educated households with some pro-environmental attitudes who replace existing long-term, lower-income residents in core urban areas. While many factors may work together in driving neighborhood change and gentrification in cities, the question this study aims to address is to what extent the supply of green-certified units can affect neighborhood change and gentrification? We use Central Virginia’s Multiple Listing Service (MLS) housing market transactions data and the U.S. Census Bureau’s socioeconomic data to present the differential effect of new construction of market-rate, green-certified units in a natural experiment using difference-in-differences estimates. We find that neighborhoods that include new, green-certified units have experienced a statistically significant increase in population, supporting new construction and positively affecting house prices. We also detect some negative effects on minorities and minority owners, but these effects have not yet reached statistical significance. This study finds strong evidence of green housing providing the conditions that make areas ripe for gentrification, but more studies should follow up to better measure and generalize this finding.