This study examines how immigrants, often concentrated in urban areas with higher rent burdens, benefit from rent control. We focus on New York City's rent stabilization policy, using data from 2002 to 2017. We find that immigrant tenants are more likely to live in rent‐stabilized units than nonimmigrant tenants. However, conditional on living in rent‐stabilized units, immigrants receive $151 less monthly rent discounts than their nonimmigrant counterparts. This notable immigrant–native gap is economically and statistically significant and robust to various checks. Factors like spatial sorting, tenancy duration, policy awareness, and property characteristics primarily contribute to this disparity.
{"title":"Do immigrants equally benefit from rent control?","authors":"Xun Bian, Ruoyu Chen, Hanchen Jiang","doi":"10.1111/1540-6229.12509","DOIUrl":"https://doi.org/10.1111/1540-6229.12509","url":null,"abstract":"This study examines how immigrants, often concentrated in urban areas with higher rent burdens, benefit from rent control. We focus on New York City's rent stabilization policy, using data from 2002 to 2017. We find that immigrant tenants are more likely to live in rent‐stabilized units than nonimmigrant tenants. However, conditional on living in rent‐stabilized units, immigrants receive $151 less monthly rent discounts than their nonimmigrant counterparts. This notable immigrant–native gap is economically and statistically significant and robust to various checks. Factors like spatial sorting, tenancy duration, policy awareness, and property characteristics primarily contribute to this disparity.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":"5 1","pages":""},"PeriodicalIF":2.2,"publicationDate":"2024-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142217288","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We test whether the tendency to overvalue a free service over a paid alternative may lead to inferior economic outcomes. We examine data from an online classified real estate service in Israel that allows private and commercial owners to offer their real estate properties for sale and lease under either free‐basic or paid‐premium listing categories. Estimation results indicate a zero‐price effect in owners’ choice of a listing category. Moreover, although the vast majority of owners opt for the free‐ad category, the paid‐premium category generates increased buyer demand, greater transaction price, and decreased time‐on‐market—adding up to an average net benefit of about 3.5%–3.8% of the average transaction price (equivalent to about $12K–$13K). Outcomes are robust to a series of identification and test‐design issues.
{"title":"Zero‐price effect and consumer welfare: Evidence from online classified real estate service","authors":"David Ash, Danny Ben‐Shahar","doi":"10.1111/1540-6229.12508","DOIUrl":"https://doi.org/10.1111/1540-6229.12508","url":null,"abstract":"We test whether the tendency to overvalue a free service over a paid alternative may lead to inferior economic outcomes. We examine data from an online classified real estate service in Israel that allows private and commercial owners to offer their real estate properties for sale and lease under either free‐basic or paid‐premium listing categories. Estimation results indicate a zero‐price effect in owners’ choice of a listing category. Moreover, although the vast majority of owners opt for the free‐ad category, the paid‐premium category generates increased buyer demand, greater transaction price, and decreased time‐on‐market—adding up to an average net benefit of about 3.5%–3.8% of the average transaction price (equivalent to about $12K–$13K). Outcomes are robust to a series of identification and test‐design issues.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":"41 1","pages":""},"PeriodicalIF":2.2,"publicationDate":"2024-07-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141780893","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The goal of this article is to analyze the county‐level impact of public policies related to COVID‐19 on the housing market in the United States. Aimed at reducing the spread of the virus, different states throughout the United States enacted nonpharmaceutical interventions (NPIs) such as shelter‐in‐place (SIP) and eviction moratoria, in different months and for varied stretches throughout 2020 and 2021. SIP orders could potentially limit the ability of home‐buyers and sellers to interact as well as they could pre‐COVID, introducing frictions in the process of selling houses. Prolonged and overlapping eviction moratoria could dampen the construction of multifamily units and encourage the landlords to sell rented‐out apartments. This article attempts to investigate if and how these interventions causally impacted the county‐level housing sales and building permits approval in the United States. The article estimates the average treatment effect of these orders using a traditional generalized difference‐in‐difference estimator and a recent variation of the estimator that is more suited to multiple treatment groups with staggered treatment introductions and withdrawals. The results show that SIP is associated with significantly smaller year‐on‐year changes in sales of single‐family houses, condominiums and the collection of all residences. Selective moratoria on eviction hearings and judgments are also found to be associated with smaller year‐on‐year changes in multifamily building permit approvals.
{"title":"Housing sales and construction responses to COVID‐19: Evidence from shelter‐in‐place and eviction moratoria in the United States","authors":"S. Sayantani","doi":"10.1111/1540-6229.12507","DOIUrl":"https://doi.org/10.1111/1540-6229.12507","url":null,"abstract":"The goal of this article is to analyze the county‐level impact of public policies related to COVID‐19 on the housing market in the United States. Aimed at reducing the spread of the virus, different states throughout the United States enacted nonpharmaceutical interventions (NPIs) such as shelter‐in‐place (SIP) and eviction moratoria, in different months and for varied stretches throughout 2020 and 2021. SIP orders could potentially limit the ability of home‐buyers and sellers to interact as well as they could pre‐COVID, introducing frictions in the process of selling houses. Prolonged and overlapping eviction moratoria could dampen the construction of multifamily units and encourage the landlords to sell rented‐out apartments. This article attempts to investigate if and how these interventions causally impacted the county‐level housing sales and building permits approval in the United States. The article estimates the average treatment effect of these orders using a traditional generalized difference‐in‐difference estimator and a recent variation of the estimator that is more suited to multiple treatment groups with staggered treatment introductions and withdrawals. The results show that SIP is associated with significantly smaller year‐on‐year changes in sales of single‐family houses, condominiums and the collection of all residences. Selective moratoria on eviction hearings and judgments are also found to be associated with smaller year‐on‐year changes in multifamily building permit approvals.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":"84 1","pages":""},"PeriodicalIF":2.2,"publicationDate":"2024-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141741520","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We show evidence of the impact providing information on market conditions (supply growth, demand patterns, pricing trends, and competitor rates) on pricing in the short‐term rental market. Using a sample of 2196 housing units over 18 months available on Airbnb in Madrid, Spain, we observe property managers' adoption of this technology at different points in time for 16% of our observations. Our propensity score matching estimates support the evidence of greater market transparency obtained through the adoption of this technology, with a significant increase in revenues obtained through a reduced average daily price and increased occupancy. Our results are robust to several model selections dealing with a potential endogeneity issue. We also show some preliminary evidence of property managers increasingly engaging in dynamic pricing after adopting this technology. Mainly, revenue growth seems to be generated through a small price drop leading to a rise in occupancy at the top end of the price distribution rather than at the bottom end, where a significant and much higher price drop is not able to generate the necessary occupancy growth to obtain an overall increase in revenues.
{"title":"Property management technology adoption in the short‐term housing rental market","authors":"Sophia Göppinger, Jaime Luque, Gianluca Marcato","doi":"10.1111/1540-6229.12504","DOIUrl":"https://doi.org/10.1111/1540-6229.12504","url":null,"abstract":"We show evidence of the impact providing information on market conditions (supply growth, demand patterns, pricing trends, and competitor rates) on pricing in the short‐term rental market. Using a sample of 2196 housing units over 18 months available on Airbnb in Madrid, Spain, we observe property managers' adoption of this technology at different points in time for 16% of our observations. Our propensity score matching estimates support the evidence of greater market transparency obtained through the adoption of this technology, with a significant increase in revenues obtained through a reduced average daily price and increased occupancy. Our results are robust to several model selections dealing with a potential endogeneity issue. We also show some preliminary evidence of property managers increasingly engaging in dynamic pricing after adopting this technology. Mainly, revenue growth seems to be generated through a small price drop leading to a rise in occupancy at the top end of the price distribution rather than at the bottom end, where a significant and much higher price drop is not able to generate the necessary occupancy growth to obtain an overall increase in revenues.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":"1 1","pages":""},"PeriodicalIF":2.2,"publicationDate":"2024-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141509848","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The use of social networking sites (SNS) within professional contexts is increasingly prevalent, yet studies examining their impact within the real estate sector remain limited. In this study, using LinkedIn followers as an indicator of professional networks, we investigate the effect of professional networking on performance within the commercial real estate market. By leveraging an agent's LinkedIn followers, we introduce a novel measure of professional network into the real estate literature. Findings suggest that listing agents with a larger number of SNS followers tend to engage in more property transactions, achieve higher sales prices, and experience shorter sale times than agents with fewer SNS connections. Similarly, agents considered “active” on the SNS also perform better than agents that have an account but are not “active.” These findings persist after accounting for various agent, property, and location characteristics, suggesting that SNS can be a helpful tool for real estate agents in utilizing and expanding their professional network.
{"title":"“Connect” me! Social networking in commercial real estate","authors":"Eren Cifci, Alan Tidwell","doi":"10.1111/1540-6229.12506","DOIUrl":"https://doi.org/10.1111/1540-6229.12506","url":null,"abstract":"The use of social networking sites (SNS) within professional contexts is increasingly prevalent, yet studies examining their impact within the real estate sector remain limited. In this study, using LinkedIn followers as an indicator of professional networks, we investigate the effect of professional networking on performance within the commercial real estate market. By leveraging an agent's LinkedIn followers, we introduce a novel measure of professional network into the real estate literature. Findings suggest that listing agents with a larger number of SNS followers tend to engage in more property transactions, achieve higher sales prices, and experience shorter sale times than agents with fewer SNS connections. Similarly, agents considered “active” on the SNS also perform better than agents that have an account but are not “active.” These findings persist after accounting for various agent, property, and location characteristics, suggesting that SNS can be a helpful tool for real estate agents in utilizing and expanding their professional network.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":"4 1","pages":""},"PeriodicalIF":2.2,"publicationDate":"2024-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141509849","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We develop housing overvaluation measures that are separate from local economic conditions and show that banks with greater exposure to such overvalued markets have higher mortgage delinquency and charge‐off rates and significantly higher probabilities of failure during the 2007–2009 financial crisis even after controlling for bank characteristics. While high house prices relative to fundamentals present a greater likelihood of house price correction, we find no evidence that banks managed this risk by building capital. We also show that our overvaluation measures are important in explaining individual mortgage loan defaults and could be used to improve bank risk management.
{"title":"Bank failures, capital buffers, and exposure to the housing market bubble","authors":"Gazi I. Kara, Cindy M. Vojtech","doi":"10.1111/1540-6229.12494","DOIUrl":"https://doi.org/10.1111/1540-6229.12494","url":null,"abstract":"We develop housing overvaluation measures that are separate from local economic conditions and show that banks with greater exposure to such overvalued markets have higher mortgage delinquency and charge‐off rates and significantly higher probabilities of failure during the 2007–2009 financial crisis even after controlling for bank characteristics. While high house prices relative to fundamentals present a greater likelihood of house price correction, we find no evidence that banks managed this risk by building capital. We also show that our overvaluation measures are important in explaining individual mortgage loan defaults and could be used to improve bank risk management.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":"57 1","pages":""},"PeriodicalIF":2.2,"publicationDate":"2024-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141153345","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article examines the responsiveness of new housing supply to prices and costs, using the case of Ireland at quarterly frequency from the 1970s, as well as a county‐level panel from the 1990s. Across four error‐correction specifications, and supported by an instrumental variables approach, we find the estimated elasticity of new housing supply to prices of +0.9 in the baseline, while that of costs is larger in magnitude (−1.9). We present evidence that responsiveness to prices rose after the 1980s, then fell in the 2000s, before rising again and also that elasticities vary at the county level.
{"title":"Housing prices, costs, and policy: The housing supply equation in Ireland since 1970","authors":"Maximilian Günnewig‐Mönert, Ronan C. Lyons","doi":"10.1111/1540-6229.12491","DOIUrl":"https://doi.org/10.1111/1540-6229.12491","url":null,"abstract":"This article examines the responsiveness of new housing supply to prices and costs, using the case of Ireland at quarterly frequency from the 1970s, as well as a county‐level panel from the 1990s. Across four error‐correction specifications, and supported by an instrumental variables approach, we find the estimated elasticity of new housing supply to prices of +0.9 in the baseline, while that of costs is larger in magnitude (−1.9). We present evidence that responsiveness to prices rose after the 1980s, then fell in the 2000s, before rising again and also that elasticities vary at the county level.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":"18 1","pages":""},"PeriodicalIF":2.2,"publicationDate":"2024-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140935781","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We document how a select set of large and growing metropolitan areas have accommodated growth in their housing supply over 40 years. In particular, we examine how housing provision has evolved for the largest four metropolitan statistical areas (MSAs) in California and Texas. Despite differences in their topographies and regulatory environments, we find several common dynamics. As these MSAs grow, we see that fewer new net units are built at the periphery and a smaller share of the new units are built as single‐family detached houses. As a greater share of new net units are built in infill locations, more units are built using higher‐density—and more costly—multifamily housing construction techniques. Interestingly, we see these housing supply patterns in both “pro‐growth” MSAs and “highly regulated” MSAs. Among all of our sample MSAs, we also find a declining share of Census tracts that participate in accommodating growth. Our results are consistent with the existence of a convex housing supply curve. We believe that this secular trend will pose genuine challenges to many urban housing policies aimed at improving affordability.
{"title":"Houston, you have a problem: How large cities accommodate more housing","authors":"Anthony W. Orlando, Christian L. Redfearn","doi":"10.1111/1540-6229.12490","DOIUrl":"https://doi.org/10.1111/1540-6229.12490","url":null,"abstract":"We document how a select set of large and growing metropolitan areas have accommodated growth in their housing supply over 40 years. In particular, we examine how housing provision has evolved for the largest four metropolitan statistical areas (MSAs) in California and Texas. Despite differences in their topographies and regulatory environments, we find several common dynamics. As these MSAs grow, we see that fewer new net units are built at the periphery and a smaller share of the new units are built as single‐family detached houses. As a greater share of new net units are built in infill locations, more units are built using higher‐density—and more costly—multifamily housing construction techniques. Interestingly, we see these housing supply patterns in both “pro‐growth” MSAs and “highly regulated” MSAs. Among all of our sample MSAs, we also find a declining share of Census tracts that participate in accommodating growth. Our results are consistent with the existence of a convex housing supply curve. We believe that this secular trend will pose genuine challenges to many urban housing policies aimed at improving affordability.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":"171 1","pages":""},"PeriodicalIF":2.2,"publicationDate":"2024-05-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140888436","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the effect of housing leverage, measured using the loan‐to‐value (LTV) ratio, on homeowners' retirement decisions. We find that in general, elevated LTV ratios delay retirements. By decomposing the changes of the current LTV ratio into (1) equity extractions, (2) equity build‐up, (3) home value increases, and (4) home value decreases, we find that equity extractions and declining home value drive the negative relationship between housing leverage and retirement. In contrast, retirement decisions are less responsive to equity build‐up and home value appreciation. Our results suggest that the influence of housing leverage on retirement decisions is path‐dependent and asymmetric. We also find that transitions into retirement are more sensitive to home price declines, and retirement reversals are often triggered by equity extraction. Further analyses also reveal that the impact of housing leverage on retirement differs by household age and financial constraints, and it also varies across different stages of a housing market cycle.
{"title":"Housing leverage, home value, and retirement","authors":"Xun Bian, Zhenguo Lin, Feifei Zhu","doi":"10.1111/1540-6229.12492","DOIUrl":"https://doi.org/10.1111/1540-6229.12492","url":null,"abstract":"We study the effect of housing leverage, measured using the loan‐to‐value (LTV) ratio, on homeowners' retirement decisions. We find that in general, elevated LTV ratios delay retirements. By decomposing the changes of the current LTV ratio into (1) equity extractions, (2) equity build‐up, (3) home value increases, and (4) home value decreases, we find that equity extractions and declining home value drive the negative relationship between housing leverage and retirement. In contrast, retirement decisions are less responsive to equity build‐up and home value appreciation. Our results suggest that the influence of housing leverage on retirement decisions is <jats:italic>path‐dependent</jats:italic> and <jats:italic>asymmetric</jats:italic>. We also find that transitions into retirement are more sensitive to home price declines, and retirement reversals are often triggered by equity extraction. Further analyses also reveal that the impact of housing leverage on retirement differs by household age and financial constraints, and it also varies across different stages of a housing market cycle.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":"68 1","pages":""},"PeriodicalIF":2.2,"publicationDate":"2024-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140840253","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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