We decompose the break-even rents of new multifamily housing into three cost components — land prices, construction costs, and financial capital — for 50 of the largest cities in the United States from 2012 to 2020. This is accomplished by combining existing data on land prices and income capitalization rates with a new data series on local historical pricing of required construction components of complete buildings called “assemblies”. For both 3-story, wood-framed buildings and 12-story, steel-framed buildings, we find that construction costs contribute significantly to the growth of break-even rents, and the relative contribution of construction costs exceeds that of land values for the taller buildings. Meanwhile, cap rates have declined, mediating the effect of development costs on the rents borne by tenants. Overall, there is significant variation in rent growth across cities that can be explained by these three cost factors.
Housing Mobility Programs (HMPs) support residential mobility to reduce economic segregation. One design feature of HMPs requires identifying areas to which moving will most improve outcomes. We show that ranking neighborhoods’ effects using current residents’ outcomes has strengths over using previous residents’ outcomes due to statistical uncertainty, bias from sorting over time, and lack of support. We simulate how the choice of neighborhood ranking and others affect an originally-intended outcome of HMPs: reducing racial segregation. HMP success on this dimension depends on the ability to port vouchers across jurisdictions, access to cars, and the range of neighborhoods targeted.