Urban renewal and residential displacement in Myllypuro

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School of Business | Master's thesis
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I conduct a descriptive analysis on the socioeconomic change and potential displacement effect in a Finnish neighbourhood, Myllypuro, which is located in Eastern Helsinki. Myllypuro is a typical Finnish suburb built in the 1960s with ample space and emphasis on multistorey residential buildings. Since its initial construction, there has been little infill development or other change, until in the early 21st century several large, transformative construction projects for a new shopping mall, sports center, health station and a campus for university of applied sciences took place. The changes in both physical appearance and in reputation have been significant. Urban renewal and gentrification are typically associated with a concern for the outcomes of most vulnerable incumbent residents. Significant increases in housing prices may force low-income residents out of their apartments. This descriptive analysis studies the share of movers who move out of the zip code and into a lower income neighborhood as a proxy for push migration or displacement. To further validate the results, the analysis is conducted using two different control groups. Another subway neighbourhood in Eastern Helsinki, Kontula, is used as the first control group. The two neighbourhoods have very similar history, but over the years their trajectories diverge, as the improvements in Myllypuro take place. In second specification rental residents in non-subsidized housing are compared to those in subsidized housing within Myllypuro post code, as the incentives for the two groups vary significantly. This difference in incentives is a result of cost-based pricing implemented in subsidized housing. Two main insights can be drawn from this thesis. First, the urban renewal and infill development appear to have influenced the alarming development seen in Myllypuro, where the share of higher income residents kept decreasing and the share of low-income residents climbed. Particularly higher-income in-migration has increased due to the new residential buildings. Second, despite an increase in neighbourhood attractiveness and housing values there is little evidence of low-income residents being displaced during the observation period in either of the two specifications. However, as the analysis is purely descriptive, there is no presumption of causal inference. These results, even if they coincide with construction of the new mall and infill development around it, could be driven by some completely unrelated factors. The goal of this thesis is rather to provide a description of a neighbourhood in change and a starting point for further econometric analysis.
Thesis advisor
Saarimaa, Tuukka
urban renewal, infill development, residential displacement, neighbourhood change
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