Impact of downtown revitalization on new housing construction

This paper evaluates the impact of the Main Street Program (MSP), a widely adopted downtown revitalization strategy, on housing markets in rural counties across ten U.S. states from 1990 to 2023. Using Callaway & Sant’Anna difference-in-differences (CSDiD) approach, we analyze data from 543 nonmetropolitan communities, combining building permit records, House Price Index data, and MSP adoption information. We find that MSP implementation significantly increased county-level Home Price Indices, with effects peaking around eight years post-adoption and remaining elevated long-term. The program showed no statistically significant impact on single-family housing permits. These findings suggest that while the MSP enhances property values in treated areas, it does not necessarily drive new construction activity, showing important considerations for policymakers employing downtown revitalization as an economic development strategy.