Openings of tech offices are associated with "strong and long-lasting" impacts on local housing prices, according to a new analysis by UCLA's Benjamin Freyd.
His research found that within two years of an office opening, housing prices rose 11% within 1 kilometer o the new office relative to matched areas between 1 and 3 kilometers away. The difference persists, he says, at around 8% five years later. And the effects are "substantially larger" than those found when supermarkets or coffee shops open in a neighborhood.
"An agglomeration explanation seems to be the most compelling mechanism," he says. " The new office attracts similar firms in its neighborhood, such that the number of high-skill, affluent residents substantially increases."
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