Causal Evaluation of the Impact of Urban Redevelopment on Moscow’s Urban Environment in the Context of Commercial Gentrification

Abstract

Renovation and integrated territorial development programs have covered hundreds of former industrial sites in Moscow, yet their impact on business has not been measured. We estimate how the completion of new housing construction on such sites changes the revenue and profit margins of incumbent firms, as well as the size of the local market. The method is a doubly robust difference-in-differences estimator with staggered adoption, applied to a firm-level panel and to a hexagonal grid of the city for 2012–2024. The effect is heterogeneous and depends on the initial density of the area. Profit margins decline by 0.4–0.6 percentage points after redevelopment regardless of location. Revenue falls by 3–4% inside the Moscow Ring Road (MKAD), while outside it revenue grows by 9–28% with spatial decay away from the site. The number of active firms in a redevelopment zone grows by 20 on average, and the effect strengthens over time – from 7 firms in the year of construction completion to 50 firms five years later, with no signs of sectoral displacement