This dissertation examines the effectiveness of place-based policies that address spatial externalities in order to regenerate urban neighborhoods. Spatial externalities generate market inefficiencies that expose certain urban neighborhoods to either an insufficient presence or an excessive concentration of particular economic activities. In response, local governments around the world have increasingly turned to place-based policies as a means to address these market failures and enhance or regenerate specific urban neighborhoods. However, there is considerable skepticism as to the effectiveness of such policies. The four empirical studies included in this dissertation examine spatial externalities in urban areas that can be addressed by place-based policies, and evaluate the effects of specific place-based policies on their direct and nearby socioeconomic environments. The studies included in this dissertation touch upon three core elements of cities: housing, retail, and urban labor markets.