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on Housing and Real Estate |
| By: | Bruneel, Christophe; Chapelle, Guillaume; Eymeoud, Jean Benoit; Wasmer, Etienne |
| Abstract: | A puzzle is that price-to-rent ratios in the housing market vary a lot in time and space, even after accounting for differences in local discount rates or rent growth differences. We propose a variant of asset pricing equations for housing markets that include a price gradient in space. It is analogous to the transport equation in physics and generates a new range of solutions consistent with the facts. The rationale for the price gradient in the asset pricing equation is the existence of spatial search frictions for housing. It is supported by the data analysis of a large urban area, Paris region. |
| JEL: | R31 G12 D83 C61 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19956 |
| By: | Marina Gómez-García (Universidad Autónoma de Madrid and Banco de España) |
| Abstract: | This paper estimates the causal impact of air pollution on housing prices in Madrid, a large European city with relatively high and persistent nitrogen dioxide (NO2) concentrations and a home ownership rate of around 70%. Using location-specific data on pollution levels and the universe of housing transactions, my estimation controls for house and neighborhood characteristics, year and neighborhood fixed effects, a bad weather index and a set of time-varying neighborhood characteristics. To address endogeneity concerns, I make use of quasi-experimental variation in nitrogen dioxide levels resulting from temperature inversions. The results suggest that a 10% increase in air pollution reduces housing prices by 0.65% (around €1, 327 for the average house). This effect is robust to alternative measures of air pollution, different bad weather indices and the inclusion of seasonality dummies, and is highly non-linear, being larger for higher levels of pollution. |
| Keywords: | air pollution, housing market, valuation of environmental effects |
| JEL: | Q53 R31 Q51 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2624e |
| By: | Pierre Monnin (aCouncil on Economic Policies and Centre for Economic Transition Expertise (London School of Economic and Political Science)); Adam Banai (Magyar Nemzeti Bank); Kristina Bojare (Latvijas Banka); Jan Klacso (Narodna banka Slovenska); Reiner Martin (Narodna banka Slovenska); Janos Szakacs (Magyar Nemzeti Bank) |
| Abstract: | In this paper, we explore how borrower-based measures (BBMs) can be adjusted to provide additional funding for housing-related energy-efficiency investments without compromising financial stability objectives. We first show that lower energy costs and higher house price values resulting from renovation work allows an easing of borrowing limits while keeping loan risk metrics unchanged. We then focus on three recent easing measures implemented in Slovakia, Hungary, and Latvia and assess their effectiveness using a bank survey. We find that these policy changes did not significantly affect banks' credit portfolio risk profile and thus financial stability. At the same time, they did not generate a significant increase in loans for energy-efficient investments. We thus suggest combining BBM adjustments with other policy measures to improve energy-efficiency in real estate. |
| Keywords: | housing renovation, borrower-based measures, green loans |
| JEL: | C8 E44 E50 G21 |
| Date: | 2026–06–08 |
| URL: | https://d.repec.org/n?u=RePEc:ltv:wpaper:202603 |
| By: | Katherine Cuff; Nicolas Marceau; Reyhaneh Nikoonejad; Bradley Ruffle |
| Abstract: | We develop a model of monopolistic competition in the rental housing market for low-income households with endogenous tenancy default. Identical suppliers choose the number of rental units to supply and the rental price to charge to maximize expected profits. Potential tenants who differ in their incomes and face an uninsurable income risk choose whether to engage in a costly search for rental housing. If they search and find a rental unit, then they must commit to a rental agreement before their income uncertainty is resolved. Consequently, some tenants may default on their rental payments. We show that tenancy default can explain persistent excess demand in the low-income rental housing market without any government price regulations, and that such excess demand can lead to nonstandard effects of government regulations. We also test whether the excess-demand equilibrium is behaviorally plausible by designing a laboratory experiment. Our experimental results reveal that, with feedback and repetition, the excess-demand equilibrium that requires landlord participants to restrict supply is no more difficult for participants to reach than a market-clearing equilibrium. |
| Keywords: | tenancy default; excess demand; rental housing policies; market experiment |
| JEL: | R21 R31 R38 D41 C91 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:mcm:deptwp:2026-05 |
| By: | Doerr, Sebastian; Fuster, Andreas |
| Abstract: | Policy makers place high hopes in manufactured homes—the largest source of unsubsidized affordable housing in the US—to alleviate housing supply shortages. This paper shows that high market concentration in the multi-billion-dollar manufactured home loan market allows lenders to charge significantly higher interest rates than for site-built homes. Loan-level data indicate that borrowers in counties with higher lender concentration face significantly higher rates. Evidence from bunching at the regulatory HOEPA rate threshold, an instrumental variable analysis, and a difference-in-differences analysis around HOEPA's introduction suggests a causal link. We further show that integrated lenders, which play an outsized role in the manufactured home loan market, charge particularly high rates, and we provide evidence suggesting that these lenders exploit their market power over borrowers. |
| Keywords: | Manufactured homes; Mortgage market; Competition; Household finance; HOEPA |
| JEL: | G21 G23 L13 R31 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20015 |
| By: | Chen, Ziyang; Combes, Pierre-Philippe; Démurger, Sylvie; Liu, Xiuyan |
| Abstract: | We document variations in real income for high-skilled, low-skilled, and rural migrant households across Chinese cities. Using comprehensive data on land parcel transactions along with individual data for land development and household expenditure, we construct a city-specific housing cost index and assess how it varies across locations. All three components of housing costs –unit land prices, land share in construction, and housing share in expenditure– decrease from city centres to the periphery, increase with city population, and decrease with city land area, as predicted by theory. Overall, housing costs in China are high and vary widely between locations. While income gains outweigh housing costs when moving from smaller to larger cities, in the largest cities, housing costs begin to dominate, particularly for low-skilled and rural migrant households. This suggests a bell-shaped relationship between real income and city population in China, aligning with theoretical predictions. |
| Keywords: | Housing costs; Income disparities; Land use regulation; City size; Quality of life; Agglomeration economies; China |
| JEL: | O18 R21 R23 R31 R52 O53 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20011 |
| By: | Damen, Sven; Korevaar, Matthijs; Van Nieuwerburgh, Stijn |
| Abstract: | Residential properties with the lowest rent levels provide the highest investment returns to their owners. Using detailed rent, cost, and price data from the United States, Belgium, and The Netherlands, we show that this phenomenon holds across housing markets and time. If anything, low-rent units hedge business cycle risk. We also find no evidence for differential regulatory risk exposure. We document segmentation of investors, with large corporate landlords shying away from the low-tier segment possibly for reputational reasons. Financial constraints prevent renters from purchasing their property and medium-sized landlords from scaling up, sustaining excess risk-adjusted returns. Low-income tenants ultimately pay the price for this segmentation in the form of a high rent burden. |
| JEL: | G5 R2 R3 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20061 |
| By: | Ouasbaa, Ghizlen; Solé-Ollé, Albert; Viladecans-Marsal, Elisabet |
| Abstract: | We examine the impact of city council members with real estate back-grounds on housing supply in California between 1995 and 2019. Using candidate occupation data and a close-elections regression discontinuity design, we find that electing a developer increases approved housing units by 68% during their term, especially for multifamily projects. The effect operates primarily through discretionary zoning approvals and does not persist beyond the developer’s term, suggesting limited impact on broader regulatory reform. These findings offer new causal evidence on how policymakers’ professional backgrounds shape land-use deci-sions and contribute to a long-standing debate on the political origins of housing supply constraints. |
| JEL: | P00 R31 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20151 |
| By: | Koijen, Ralph; Shah, Neel; Van Nieuwerburgh, Stijn |
| Abstract: | We develop a new approach to understand the joint dynamics of transaction prices and trading volume in the market for commercial real estate. We start from a micro-founded model in which buyers and sellers differ in their private valuation of building characteristics, such as size, location, and quality. Consistent with the decentralized nature of the commercial real estate market, we model the probability that a seller meets a particular buyer, where the meeting probability depends on the characteristics of the buyer, the seller, and the building. In equilibrium, the mapping from building characteristics to observed transaction prices depends on the identity of the buyer and the seller, an important property missed by traditional hedonic valuation models. We estimate the model using granular data on commercial real estate transactions, which contain detailed information on the identity of buyers and sellers. Our central finding is that the identity of buyers and sellers has a first-order effect on both property valuation and the likelihood of trade. The importance of investor characteristics for valuations remains true, in fact is amplified, in a rich machine learning model that allows for non-linearities and interactions. We show how the model can be used for out-of-sample predictability and for counterfactual analyses on investment flows and prices. As a concrete example, we find that the Manhattan office market would have seen 7.5% lower valuations if it had not been for a large inflow of foreign buyers in 2013--2021. Our methodology extends to other private markets, including private equity, private credit, and infrastructure. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20053 |
| By: | Franklin, Simon |
| Abstract: | The case for government supply of housing hinges on two key questions: do intended beneficiaries value it more than the cost to the state of providing it, and does relocation to remote housing sites impose unintended costs for movers or society? I study a large-scale lottery in Addis Ababa, Ethiopia, which randomly assigned slum residents to housing on the city’s outskirts. Leveraging eight years of low-attrition panel survey data alongside market rents, construction costs, and land values, I find that willingness to pay exceeds per-unit production costs for a substantial share of slum households. There is no evidence that housing negatively affects labour market outcomes, education, or household consumption— suggesting that there are neither unanticipated drawbacks for movers nor broader negative externalities. Multiple surveys allow me to track how households adjust to moves and how new mega-neighbourhoods evolve. Although social networks and neighbourhood amenities initially deteriorate for winners, they significantly improve after 8 years. The results differ significantly by randomly assigned location, implying a weaker case for centrally located housing given its higher cost relative to benefits. |
| Keywords: | Housing demand; Neighbourhoods; Market access; public housing; Slums |
| JEL: | I38 O18 R23 R21 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19944 |
| By: | Bo Li |
| Abstract: | During the 1999-2019 U.S. housing cycle, three empirical facts present a puzzle: in the boom period, the correlation between income growth and mortgage growth is (1) negative across ZIP codes within a metropolitan area, but (2) positive across metropolitan areas, and (3) the metropolitan areas that experience the worst bust also show the strongest recovery. I develop a unified credit expansion theory that explains both within- and cross-metro patterns in the prior, boom, bust, and recovery periods (including the three facts above) and generates new testable implications of ``double differences" (cross ZIP codes and cross metros) for the four periods. Following the idea of ``Economic Base Theory", I construct local economic exposure to net export growth as the driving force of local economy and credit expansion. For the identification strategy, I use a new instrumental variable approach from the International trade literature for the following empirical results. First, I show that high-net-export-growth metros experience a stronger boom-bust-recovery housing cycle due to credit expansion in private-label mortgages (PLMs), rather than in government-sponsored enterprise mortgages (GSEMs), because only the former can legally respond to local economic conditions. Second, for the ``double differences", I define a low-minus-high (LMH) factor as the private-label mortgage (and house price) growth in low-income ZIP codes minus that in high-income ZIP codes within the same metropolitan area. I show that this low-minus-high factor (as a measure of credit expansion) in the high-net-export-growth metros is more positive during the boom period, more negative during the bust period, and slightly more positive in the recovery period than in the low-net-export-growth metros. Lastly, I employ five tests to demonstrate that ``speculation" is unlikely to play a dominant role in this housing cycle. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.12205 |
| By: | Kristopher Gerardi; Franklin Qian; David Hao Zhang |
| Abstract: | This paper reviews the rapidly growing literature on mortgage lock-in and its effects on household mobility, labor reallocation, home sales, owner-occupied prices, and spillovers into rental and commercial markets. We then discuss two future research directions: (1) separately identifying lock-in effects from the direct effects of the existing interest rate on the mortgage, which have different implications for household behavior as market interest rates rise, and (2) assessing the general-equilibrium consequences of reduced mobility on labor markets and productivity. We close by discussing policy responses, including portability, broader assumability, and a Danish-style delivery option. |
| Keywords: | mortgage lock-in; fixed-rate mortgage (FRM); household mobility; house prices; rents |
| JEL: | G18 G21 E52 |
| Date: | 2026–08–03 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedawp:103593 |
| By: | Tomohiro Hirano; Alexis Akira Toda |
| Abstract: | We analyze how equilibrium housing prices are determined along with economic development in an overlapping generations model with perfect housing and rental markets, in which housing prices and rents are both endogenous. We focus on demand-side factors: home buyers income and the elasticity of substitution between consumption and housing. We characterize the long-run rent growth rate in all equilibria and show that, when this elasticity exceeds one (the empirically relevant case), rents grow more slowly than income. The economy then exhibits a two-stage phase transition in the income ratio of home buyers relative to home sellers. When this ratio is low, only fundamental equilibria exist. Above a first threshold, fundamental and bubbly equilibria coexist and the outcome is selected by self-fulfilling expectations. Above a second threshold, fundamental equilibria cease to exist and housing bubbles are necessary for equilibrium. We further prove that the fundamental equilibrium is always unique and the bubbly equilibrium is unique whenever the elasticity of intertemporal substitution is not far below 1/2. Uniqueness lets us study expectation-driven booms: if agents anticipate future income growth, housing prices rise and contain a bubble today even when current incomes lie in the fundamental region, with the price-income and price-rent ratios rising together. Finally, contrary to the common understanding that land eliminates dynamic inefficiency in overlapping generations models, we show that inefficient equilibria arise robustly, and only for intermediate income ratios. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:cnn:wpaper:26-011e |
| By: | Ioannides, Yannis; Ngai, Liwa Rachel |
| Abstract: | We approach the literature on housing and inequality from two angles. One is the impact of unequal endowments on housing. The second is the "memberships" inequality associated with neighborhoods, namely, households' location in a geographic and social context. We elaborate on these two angles of inequality and focus on three distinctive features of housing: consumption, capital and location. For owner-occupants, capital and consumption are bundled together in a single good. For both renters and owner-occupants, housing consumption inequality, access to good neighborhoods, and housing wealth follow from unequal endowments. Housing can propagate inequality by enabling owner-occupants to use it as collateral for other investments, or secure higher returns to human capital investments through the better schools in better neighborhoods. We use this approach to analyse key aspects of housing and inequality, paying special attention to the impacts of racial discrimination and segregation. |
| Keywords: | Inequality; housing consumption; Housing wealth; housing location |
| JEL: | R3 E2 D3 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19907 |
| By: | Oliver Skultety (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Jan Zalman (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | This paper studies the capitalization of property taxes into housing prices by exploiting a unique institutional setting. We utilize a nationwide reform that raised the statutory base rate of the property tax by 80% while simultaneously restricting the fiscal instruments municipalities could use to mitigate the hike. Exploiting a population-based discontinuity in tax rates, we deploy a difference-in-discontinuities design to jointly identify municipal tax-setting behavior and asset price capitalization. We show that prior to the reform, municipalities aggressively used local coefficients to offset statutory rates. Following the reform, however, local governments failed to utilize their remaining discretionary tools to offset the tax increase, leaving residents with a higher effective tax burden. Despite this substantial fiscal shock, we find no evidence that the resulting tax wedge is capitalized into housing prices. Our findings demonstrate that accounting for endogenous municipal responses to nationwide policy shocks is vital for accurately evaluating the economic incidence of property taxation. |
| Keywords: | Property tax, municipal tax-setting, tax competition, capitalization |
| JEL: | H71 H73 H22 R21 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2026_21 |
| By: | Zuzana Gric; Simona Malovana; Dominika Ehrenbergerova |
| Abstract: | Borrower-based mortgage limits are designed to make lending safer, but they may not affect all households in the same way. We study how tighter loan-to-value and debt-service-to-income limits are associated with access to new mortgages across the income distribution. We combine household-level data from the Household Finance and Consumption Survey with hand-collected information on policy actions in 17 European countries over 2008-2019. We find that middle-income households are disproportionately affected. Following tightening, they are approximately 2 percentage points less likely than households in the top income decile to obtain a first mortgage on their main residence. The pattern is driven mainly by loan-to-value tightening. Among middle-income households, the differential effect is stronger for younger households, which typically have less accumulated savings and housing equity. |
| Keywords: | Borrower-based measures, distributional effects, household borrowing, macroprudential policy, household finance and consumption survey |
| JEL: | E58 D31 G21 G28 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:cnb:wpaper:2026/10 |
| By: | Sejin Myung; Hyungjoon Kim |
| Abstract: | Apartment transaction records are useful for studying housing markets, household finance, regional economics, and macro-financial transmission, but transaction data are often distributed separately from contextual socioeconomic indicators. We present KRAFT, a nationwide transaction-level dataset of South Korean apartment sales from January 2015 to December 2024. The dataset contains 5, 320, 379 apartment sale transactions across all 17 Sido regions and includes transaction timing, administrative location, exclusive residential area, reported transaction price, floor level, and construction year. KRAFT also provides auxiliary indicators covering macro-financial conditions, demographic structure, education infrastructure, private education expenditure, housing price indices, consumer sentiment, and economic policy uncertainty. The released files are organized as year-specific transaction files and separate auxiliary data tables to preserve the original temporal and spatial resolution of each source. KRAFT supports reproducible research on apartment price modeling, regional housing-market comparison, housing-demand analysis, and links between housing transactions and socioeconomic context. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.11961 |
| By: | Davide Martino; Francesco Zambonin; Nuve Yazgan |
| Abstract: | Europe faces a dual challenge: the climate crisis and a persistent housing crisis, both of which converge in the urgent need to renovate aging urban housing stock. While energy-efficient renovations are essential to meet EU carbon neutrality targets by 2050, they risk triggering “renovictions”, the displacement of vulnerable residents due to rising rents and property values. This policy study shows how these renovictions can be avoided. We summarise scientific literature and survey best practices and cautionary tales from three cities across Europe: Amsterdam, Athens, and Paris. These are three large capitals, with historic centres protected by heritage status, and facing the pressure of (over)tourism. We recommend that tenants should not pay for renovations, and identify alternative sources of funding for different types of housing. The overall principle is that any money entering the housing sector should remain in the housing sector. Our recommendations are intended for policymakers at the local and European level. Local administrations should learn from each other, replicating successful policies like one-stop-shops to accompany renovations. The EU should use the policy levers that it already has to coordinate and facilitate policies at local level, namely by simplifying existing funding options or setting up publicly backed loan guarantees.Incremental, locally adapted policies—supported by EU coordination—are essential to ensure that the green transition in housing does not come at the expense of social justice. Policymakers must act to make European cities both sustainable and inclusive for all residents. |
| Date: | 2026–07–20 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/412228 |
| By: | Fan, Ying; Fan, Ziying; Zhou, Yiyi |
| Abstract: | This paper studies how dynamic changes in the search environment affect consumer search and purchase behavior. We develop a dynamic model that incorporates a non-stationary search environment and propose a feasible estimation procedure to estimate its parameters. We apply our model and estimation procedure to the Beijing housing market, utilizing detailed data on consumers' complete search records. We show that accounting for dynamics is crucial for accurately estimating search costs. Additionally, we find that search environment dynamics have a significant impact on consumer decisions and welfare. Housing supply policies that alter search environment dynamics---by increasing the number of new listings and slowing down price increases---benefit consumers, primarily by incentivizing longer searches, more property visits, and ultimately leading to purchases that yield higher utility. |
| JEL: | D8 L8 R3 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19957 |
| By: | Huber, Johannes; Kindermann, Fabian; Kohls, Sebastian |
| Abstract: | Wealth inequality and aggregate homeownership are negatively correlated across the Euro area. We explain this within a quantitative overlapping generations model, where households consume food and shelter and make portfolio decisions. Households purchase real estate for consumption purposes or rent it out to other households on the private rental market. A reduced form wedge - correlated with empirical measures of rent control - governs rental market efficiency. Rental market efficiency is crucial in explaining cross-country variation in aggregate homeownership. Wealth inequality, however, is mainly driven by mortgage market characteristics, most importantly an interest rate spread between deposits and mortgages. |
| JEL: | C68 D15 E21 R21 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20111 |
| By: | Gaubert, Cecile; Robert-Nicoud, Frédéric |
| Abstract: | We propose a spatial equilibrium model with heterogeneous households holding general non-homothetic preferences over tradable goods and housing. In equilibrium, desirable and productive locations command high housing prices. So long as housing is a necessity, these locations are disproportionately inhabited by high-income earners who are relatively less affected by high housing prices. We clarify how this source of sorting complements other potential sorting forces in spatial equilibrium models, namely, comparative advantage in production and heterogeneous preferences for locations. We show how to measure changes in welfare inequality across income groups in a theoretically-consistent way when housing is a necessity, extending the approach popular in models with homothetic preferences. We use our framework to track the evolution of welfare inequality between college and non-college graduates in the United States between 1980 and 2020. We find that, accounting for change in prices, it has risen by more than nominal wage inequality, even as college graduates increasingly sort into cities with expensive housing over this time period. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20094 |
| By: | Monras, Joan; García-Montalvo, José |
| Abstract: | Catalonia enacted a rental cap policy that affected only some municipalities and, within those, only units with prices above their "reference" price. We show that, as intended, the policy led to a reduction in rental prices, but with price increases at the bottom and price declines at the top of the distribution. The policy also affected supply, with exit at the top which was not compensated by entry at the bottom. We show that a model with quality differences in rental units rationalizes the empirical facts and allows us to compute the welfare consequences of an (increasingly popular) policy that was designed as a short-term remedy to a tight rental market. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20018 |
| By: | Skudelny, Frauke; Aliman, Mihai; Regnér, Martin; Sarchi, Cecilia; Valetto, Matteo |
| Abstract: | The commercial real estate (CRE) sector is a source of financial stability risk, yet its financing structures remain poorly understood because of complex corporate group structures and data limitations. This paper investigates the financing networks of the 100 largest CRE groups in the euro area, constructing two distinct networks: one for loan financing and one for bond issuance. The loan network exhibits strong regional clustering, a pronounced home bias and a core-periphery structure. Regional differences in loan financing patterns give rise to geographically concentrated communities of CRE entities with similar characteristics. The backbone of the loanmarket shows limited overlap among banks, both in the set of CRE borrowers they serve and in the size and composition of their loan portfolios, pointing to segmented lending relationships. By contrast, the bond network displays greater interconnectedness, is largely free of home bias and allows access to a diversified investor base. Financial stability implications are assessed through the structural properties of the networks and the identification of systemic nodes. In the loan network, regional clustering may amplify cross-border contagion, while highly central CRE groups in both networks could generate spillovers in distress, shaping credit allocation and systemic risk in the euro area. JEL Classification: G21, G28, R31, D85, C63 |
| Keywords: | commercial real estate, euro area, interconnectedness, network analysis, systemic risk |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:srk:srkwps:2026155 |
| By: | Li, Jiacheng; Trannoy, Alain; Wasmer, Etienne |
| Abstract: | We explore the efficiency properties of land taxes, and compare them with more traditional taxes. Starting from a Ramsey-Cass and Judd (1985) dynamic setup, we add population growth, perpetual youth and stochastic death, a dynastic representative agents, a class of rentiers detaining undeveloped land, and capitalists purchasing land and developing it. A first- best modified golden rule is contrasted with the decentralized modified golden rule. A uniform land tax that entirely compensates for the initial allocation of property rights leads to a first- best condition of the level of the land tax if a second instrument to transfer between rentiers and capitalists is available. Accidental bequests taxes and taxes on assets of the living are shown to be equivalent. Steady state and dynamic simulations illustrate the benefits of land taxes in various contexts. Property taxes, were they exclude the rental market and focused on homeowners, would be distortive, yet come close to the welfare gain of a land tax, at least in the steady state. However, this exclusion may be difficult to implement and a uniform property tax on all dwellings negatively affects renters through its incidence on rents. |
| JEL: | H21 R14 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19954 |
| By: | Yu-Hsin Ho; Chang-Tai Hsieh; Wen-Tai Hsu; Yu-Jhih Luo |
| Abstract: | We study how residential-commercial zoning affects the allocation of urban space. Using property-level data from Taipei and 34 U.S. metropolitan areas, we infer neighborhood-level zoning wedges from the allocation of residents, workers, and floor space. We find substantially greater dispersion in these wedges in U.S. cities than in Taipei, where mixed-use development is pervasive. The inferred wedges increase neighborhood specialization and reduce welfare. We then evaluate whether zoning is aligned with the neighborhood characteristics that would justify intervention. Although zoning is systematically related to comparative advantage, comparative advantage explains only a small fraction of the variation in zoning. The dominant effect of zoning in American cities is therefore not to promote efficient land use, but to increase the segregation of residential and commercial activity across neighborhoods. |
| JEL: | D61 R13 R52 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35455 |
| By: | David P. Glancy; Robert J. Kurtzman; Lara Loewenstein |
| Abstract: | Place-based policies are often caught between two potentially conflicting aims: (i) directing aid to needy communities and (ii) spurring investment. We study this tradeoff in the context of the Opportunity Zones (OZ) program. Leveraging unique phase-level microdata on commercial construction projects, we show that US state governors prioritized designating tracts where construction projects were already being planned. About two-thirds of the greater construction growth in OZs can be attributed to this selection. States prioritizing tracts with greater investment opportunities observed larger construction increases in designated tracts. We calibrate a structural model to quantify the effects of the program and examine counterfactuals under alternative preferences or eligibility criteria. |
| JEL: | R23 R32 R58 |
| Date: | 2026–07–15 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedcwq:103569 |