Puzzling patterns in neighborhood change: upgrading and downgrading in highly regulated urban housing markets

This study disentangles the relationship between income and real estate value development in Dutch urban neighborhoods. Within the literature on upgrading and downgrading, it is often assumed that neighborhood income and real estate value development are strongly linked. The results reported here—based on research in Amsterdam, The Hague, and Tilburg—indicate that income and real estate values develop simultaneously in only a relatively small number of neighborhoods, which are at the top and bottom of the housing market hierarchy. The majority reveal a more complex relationship: a number of neighborhoods show a time lag between the trends, whereas in other neighborhoods income and real estate values show partially diverging trends. Several tentative explanations are offered for the complex relationship, and stress the importance of place-specific knowledge. Three points of attention are suggested for further research: understanding the role of household dynamics, the position of neighborhoods within their urban system, and the role of the state and housing associations in neighborhood change.