Highway Project and Residential Property Quality: The Case of Vías Nuevas De Lima

Abstract

The impacts of a highway renovation and expansion project, Vías Nuevas de Lima (VNL) (starting in 2013 in Lima, Peru), on the number of residents in nearby higher-quality property is examined in this study. A regression model is applied to block-level residential data near the North Panamericana section of the VNL in 2007 and 2017. The model includes linear and quadratic terms measuring proximity to the renovated highway as well as other (control) variables. Model results suggest that, before the project, proximity to the highway did not affect the number of people residing in higher-quality properties. However, after renovation, proximity to the VNL has a non-monotonic type of impact, suggesting that the expanded and renovated highway attracts more residents to settle in nearby “middle-buffer” higher-quality properties. A similar pattern is also found in terms of the formal education levels of residents. However, proximity to the highway does not affect the number of residents in lower-quality housing regardless of the status of the project. Findings imply that renovated highway project may affect the composition of nearby neighborhoods and increase the demand for higher quality, more valuable property in proximate areas.