A Lasting Impact From Stop & Frisk : Evidence From The Housing Market in New York City

Crime negatively affects housing values. However, little empirical evidence documenting the amenity value of how people are policed exists. Stop & Frisk was a particularly salient policing tactic employed in New York City until a judge ruled it to be unconstitutional. This study uses exogenous variation in Stop & Frisk activity resulting from landmark events in a federal class action lawsuit, as well as exposure to Operation Impact, a high intensity policing strategy, to explain variation in property sale prices. Results indicate a 6% increase in sale price for properties most exposed to Stop & Frisk relative to nearby properties after the practice is ruled unconstitutional. However, this increase in value does not appear to be received by property owners who are predicted to be non-white or having lived in the property during an active Impact Zone. The decrease in perception of one’s home value is comparable to that resulting from an economic recession. This result adds to a growing literature that shows strong negative cognitive consequences of Stop & Frisk such as decreased mental health and lower educational outcomes