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":null,"pages":null},"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":null,"pages":null},"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":null,"pages":null},"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":null,"pages":null},"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":null,"pages":null},"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 study the comovement of public real estate returns and inflation shocks over 1981–2022, using both survey‐based expected inflation and the Consumer Price Index (CPI). We find a complex relation that is: strongly negative during weaker‐economic (WE) times over the 1980s and 1990s, when stagflation was more a concern; strongly positive during WE times over roughly 2000–2022, when low growth with low inflation tended to be more a concern; and marginally negative otherwise. Linking inflation to both macroeconomic fundamentals and real estate operational data, we show that inflation shocks comove with changing beliefs about the underlying economic‐growth state and/or the risk premium. Thus, we argue that inflation nonneutrality has a central role in understanding our findings.
{"title":"Public real estate returns and inflation shocks: The central role of inflation nonneutrality","authors":"Robert A. Connolly, Chris Stivers","doi":"10.1111/1540-6229.12495","DOIUrl":"https://doi.org/10.1111/1540-6229.12495","url":null,"abstract":"We study the comovement of public real estate returns and inflation shocks over 1981–2022, using both survey‐based expected inflation and the Consumer Price Index (CPI). We find a complex relation that is: strongly negative during weaker‐economic (WE) times over the 1980s and 1990s, when stagflation was more a concern; strongly positive during WE times over roughly 2000–2022, when low growth with low inflation tended to be more a concern; and marginally negative otherwise. Linking inflation to both macroeconomic fundamentals and real estate operational data, we show that inflation shocks comove with changing beliefs about the underlying economic‐growth state and/or the risk premium. Thus, we argue that inflation nonneutrality has a central role in understanding our findings.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":null,"pages":null},"PeriodicalIF":2.2,"publicationDate":"2024-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141367790","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 design and implement a correspondence experiment to test for differences in real estate agent response to Chinese clients. In the full sample, real estate agents are no more likely to respond to white clients than Chinese clients. Subsample results show statistically significant differential treatment of Chinese clients in rural areas and in some states. White real estate agents favor white clients (7.90% higher response rate), and Chinese real estate agents favor Chinese clients by a wide margin (151.11% higher response rate).
{"title":"Chinese exclusion? Agent response in the market for owner‐occupied housing","authors":"Andrew Hanson, Zackary B. Hawley","doi":"10.1111/1540-6229.12503","DOIUrl":"https://doi.org/10.1111/1540-6229.12503","url":null,"abstract":"We design and implement a correspondence experiment to test for differences in real estate agent response to Chinese clients. In the full sample, real estate agents are no more likely to respond to white clients than Chinese clients. Subsample results show statistically significant differential treatment of Chinese clients in rural areas and in some states. White real estate agents favor white clients (7.90% higher response rate), and Chinese real estate agents favor Chinese clients by a wide margin (151.11% higher response rate).","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":null,"pages":null},"PeriodicalIF":2.2,"publicationDate":"2024-06-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141273884","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":null,"pages":null},"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}
Rooted in my upbringing in the South Bronx and informed by my extensive equity‐focused research on housing, energy, and health, alongside practical experience in small‐scale, place‐based real estate, I advocate for a more nuanced and holistic approach to understanding and achieving “sustainable affordable housing.” By challenging the conventional emphasis on environmental and economic sustainability, I argue that social realities must also take precedence in this endeavor. Drawing from my lived experiences and expertise, I propose viewing housing and neighborhoods through a population lens to drive equitable, intergenerational progress. In this commentary, I present three innovative strategies to harness the transformative potential of sustainable affordable housing. Bold Idea #1 emphasizes community‐based, non‐profit‐led retrofits, maintenance, and property management, while Bold Idea #2 champions legacy housing placements. Bold Idea #3 focuses on promoting moderate income housing and homeownership opportunities. These bold propositions aim to propel sustainable affordable housing beyond its current constraints, positioning it as a true catalyst for positive social change.
{"title":"Prisms of Possibility: Biographically situated insights on the transformative potential of sustainable affordable housing","authors":"Diana Hernández","doi":"10.1111/1540-6229.12493","DOIUrl":"https://doi.org/10.1111/1540-6229.12493","url":null,"abstract":"Rooted in my upbringing in the South Bronx and informed by my extensive equity‐focused research on housing, energy, and health, alongside practical experience in small‐scale, place‐based real estate, I advocate for a more nuanced and holistic approach to understanding and achieving “sustainable affordable housing.” By challenging the conventional emphasis on environmental and economic sustainability, I argue that social realities must also take precedence in this endeavor. Drawing from my lived experiences and expertise, I propose viewing housing and neighborhoods through a population lens to drive equitable, intergenerational progress. In this commentary, I present three innovative strategies to harness the transformative potential of sustainable affordable housing. Bold Idea #1 emphasizes community‐based, non‐profit‐led retrofits, maintenance, and property management, while Bold Idea #2 champions legacy housing placements. Bold Idea #3 focuses on promoting moderate income housing and homeownership opportunities. These bold propositions aim to propel sustainable affordable housing beyond its current constraints, positioning it as a true catalyst for positive social change.","PeriodicalId":47731,"journal":{"name":"Real Estate Economics","volume":null,"pages":null},"PeriodicalIF":2.2,"publicationDate":"2024-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140971749","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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