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on Housing and Real Estate |
| By: | Adrian Fernandez-Perez (Department of Banking and Finance, Michael Smurfit Graduate Business School, University College of Dublin, Ireland.); Marta Gómez-Puig (Department of Economics and Riskcenter, Universitat de Barcelona, Spain.); Simón Sosvilla-Rivero (Complutense Institute for Economic Analysis, Universidad Complutense de Madrid, Spain.) |
| Abstract: | This study examines the impact of extreme temperatures on housing price dynamics in Spain, considering both direct and indirect effects across geographic space. Using panel data at the provincial level and a spatial econometric model, we find that an increase in the number of days with maximum temperatures exceeding 35 °C (95ºF) over the past year is significantly associated with a decline in both sale and rental prices within the affected province. However, we also identify a positive indirect effect on housing markets in more distant provinces, particularly in the rental sector, consistent with a pattern of temperature-induced house price premium in cooler regions. A central methodological contribution of this paper is the use of spatial econometric techniques to detect and quantify these spillover effects. By explicitly modelling spatial dependence, we can disentangle local impacts from broader geographic transmission mechanisms, revealing how climate stressors reshape housing demand across regions. These findings highlight the importance of incorporating climate-related factors into real estate market analysis and the design of adaptation policies. |
| Keywords: | Extreme Heat Temperature; Housing Prices; Spatial Econometrics; Environmental Economics. JEL classification: C23; Q54; R14; R21; R31. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ira:wpaper:202516 |
| By: | Zhiguo He; Zehao Liu; Xinle Pang; Yang Su; Kunru Zou |
| Abstract: | Collateral constraints limit household migration to expensive locations by restricting financing for home purchases. Such endogenous location choice amplifies the impact of relaxing household borrowing constraints. Using China’s cash-based shantytown renovation program (2015-2018) as a natural experiment, we provide evidence that cash resettlement—by converting illiquid shanty houses into cash—facilitated household location upgrading and raised house prices in more expensive locations. A dynamic spatial model with collateral constraints confirms household migration responses to the cash transfer. Quantitatively, endogenous migration amplifies household housing expenditure responses by around 40%, and is able to explain more than 20% of the housing price growth in 2016-2020. |
| JEL: | D15 D50 G0 R0 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34982 |
| By: | Wanqi Liu; Rong Zhao |
| Abstract: | Restaurants, cafes, and other commercial amenities are among the most visible markers of neighborhood change, yet whether their arrival drives house price appreciation or merely follows rising demand remains an open empirical question. This study investigates the causal effect of commercial entry on residential property values in Greater London. Exploiting the staggered timing of 21, 189 restaurant and cafe openings across 4, 835 Lower Layer Super Output Areas (LSOAs)--identified through Energy Performance Certificate records--we implement an event study design with LSOA-specific linear trends that passes the parallel trends test (F = 1.04, p = 0.384). We find that house prices rise monotonically after commercial entry, reaching +4.1% at four years post-treatment (p |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.03260 |
| By: | Parker, Madeleine E.G. PhD; Chapple, Karen PhD |
| Abstract: | California faces the loss of thousands of affordable rental units in the coming decade as affordability restrictions—known as covenants—expire. These agreements, signed between housing developers and government agencies, typically last 15 to 30 years and require that units be rented at below-market rates. When covenants expire, owners can convert units to market-rate housing, often displacing lower-income families.In Southern California alone, over 17, 000 affordable units are at risk of conversion, and nearly 70% of these units are located near high-quality transit. If the owners of these properties do not enter into new covenants, these units will be placed on the open market, likely leading to the displacement of lower-income residents to the urban outskirts, resulting in longer commutes and reduced access to reliable transit. To better understand the risk of losing affordable units, we analyzed historic data on affordable housing conversion and identified key factors that influence whether at-risk properties are preserved or lost. |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2026–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt7cg95810 |
| By: | Chihiro Shimizu |
| Abstract: | When the real interest rate falls below expected asset returns, the Bubble Necessity Theorem (Hirano and Toda, 2025) implies that high valuations are structurally necessary rather than speculative. We provide the first empirical test. Following Shiller—who built price indices to test excess-volatility theory—we construct synchronized quality-adjusted price and rent indices from 11 million listings across 40 years in Tokyo: the city of the twentieth century's largest housing bubble and the world's longest near-zero-rate episode. A cointegrated VECM yields an expectation-to-rate elasticity of 2.92 across five proxies. The post-2013 Necessary Regime transfers JPY 1.96 million per year from buyers to owners; raising the property tax from 1.4% to 3.0% would have prevented it. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:tcr:wpaper:e227 |
| By: | Silva, Olmo; Szumilo, Nikodem |
| Abstract: | Giglio, Maggiori, and Stroebel (2015) provided seminal evidence for low, constant long-run discount rates by analysing housing leaseholds using proprietary data. While their results stand as best estimates of very long discount rates, their reliance on restricted access data is a major drawback at times of a 'replicability crisis' in economics. We conduct the first external replication exercise using newly available public administrative records from the UK covering the same period and geography as in the original study. Our headline finding is stark: the baseline results replicate – but some of their key robustness checks do not. In particular, while the basic correlation between lease lengths and price discounts holds, this association vanishes when controls for initial lease terms or building fixed effects (which had no effect in the original study) are added. We further show that finer maturity bins produce noisy estimates that are not fully consistent with a constant discount rate. |
| Keywords: | discount rates; leaseholds; replication; real estate; housing markets |
| JEL: | G12 R30 Q54 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137709 |
| By: | Bäcker-Peral, Verónica; Hazell, Joe; Mian, Atif |
| Abstract: | Each month, a fraction of UK property leases are extended by 90 years or more. We construct a new dataset using thousands of these natural experiments since 2000 and estimate the expected long-term housing yield, y*. After remaining steady at around 5 percent, y* starts to decline when the Great Recession hits and reaches a low of 2.7 percent in 2024. The decline is steeper in inelastic markets, while y* remains higher in regions more exposed to long-run climate risk. Our estimate of y* is updated in real time using public data. |
| JEL: | E32 G12 Q54 R31 R38 |
| Date: | 2026–03–12 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129062 |
| By: | Chihiro Shimizu |
| Abstract: | This paper develops a spatial model of remote work, firm technology, and intergenerational care within the Becker-Diewert household-production tradition. The firm's technology is modeled using the Normalized Quadratic cost function, which allows the office-remote labor substitution elasticity to vary with factor prices. Residential space is decomposed into living and home-office components. Childcare and eldercare have separate production functions with own time and market services as substitutes. A generational structure distinguishes children, workers, and the elderly; only workers commute. I derive shadow-price bounds extending Schreyer and Diewert (2014) to five service prices, a spatial full-income identity with care surpluses, and rent gradients that flatten with remote-work technology. Heterogeneous households sort by remote-work capacity and care needs. Population aging amplifies the value of remote work as a care-enabling technology and generates a rent rotation between residential and commercial real estate. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:tcr:wpaper:e225 |
| By: | Abhishek Seth (Indian Institute of Technology Roorkee); Manish K. Singh (Indian Institute of Technology Roorkee); Diya Uday (xKDR Forum) |
| Abstract: | Property taxes (PTs) are the primary own-source revenue for Indian urban local bodies (ULBs), yet actual collections fall short of potential, constraining service delivery. Existing studies have documented this gap but have been limited to state or district-level analysis due to the absence of reliable municipal data. This paper exploits new geospatial datasets-ULB boundary maps, nighttime lights, and building volume to estimate PT demand at the ULB level in Karnataka. Using cross-sectional data for 268 ULBs in 2019-20, we show that the sum of building volume (SoBV) within a ULB boundary alone can explain over 80% of the variation in PT demand across ULBs, with a 1% increase in SoBV predicting a 1.09% rise in demand. Benchmarking exercises reveal stark regional disparities aligned with historical administrative boundaries. These findings demonstrate how non-government spatial data can measure fiscal capacity, verify self-reported statistics, and highlight institutional legacies that shape urban tax performance. |
| JEL: | H71 H72 R51 C21 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:anf:wpaper:47 |
| By: | Liao, Yanjun (Penny) (Resources for the Future); Walls, Margaret A. (Resources for the Future); DeAngeli, Emma (Resources for the Future) |
| Abstract: | With increasing threats from sea level rise (SLR) and hurricanes, state and local governments in coastal areas face difficult adaptation decisions about infrastructure. Should they continue to build and maintain infrastructure to keep communities viable or forgo those expenditures and instead facilitate a managed retreat? We examine these questions in the context of sewer expansion to address the increasing risk of failure of onsite waste disposal (septic) systems, in the face of SLR. Using a spatial discontinuity design around the boundary of sewer service areas, we find that properties with sewer access are 30 percent higher in value per acre of lot size than those on septic, indicating a strong preference for extending sewer access as a solution to problems of failing septic systems. However, we also show that sewer access induces more development exposed to flooding and SLR. These findings highlight an important adaptation challenge for local policymakers: reducing the impacts of climate change on existing residents while not worsening exposure to risk in the future. |
| Date: | 2026–03–18 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-26-05 |
| By: | Pol Cosentino |
| Abstract: | Cities are places where people commute to work and where goods are traded across space. While a large literature examines how lower commuting costs reshape cities, much less is known about within-city trade costs as a distinct force. This paper studies both channels using the construction of the Petite Ceinture railroad in nineteenth-century Paris, the world's first circular transit system, designed for both freight and passengers. Using newly digitized data on firms, population, rents, and transport networks spanning 1801 to 1906, I provide causal evidence that improved access to the railroad reshaped the spatial distribution of economic activities during this period. To quantify general equilibrium effects, I develop and calibrate a quantitative urban model in which within-city freight costs generate spatial variation in tradable goods prices, creating consumption-driven forces at the residence absent from canonical models. Counterfactuals show that removing the railroad would substantially reduce total population, consumption of tradables, and spatial specialization. Ignoring within-city freight costs leads to a 17.1% underestimation of the effects of transport infrastructure on urban structure and welfare. |
| Keywords: | commuting, trade, transport infrastructure, quantitative urban model |
| JEL: | R40 R12 R13 F12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12557 |