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on Housing and Real Estate |
| By: | Nishaad Rao; Tao Wang |
| Abstract: | We use Canadian data to examine how monetary policy affects house prices and the consumer price index for rent (CPI-rent) through exogenous changes in the mortgage interest rates. Nationwide, tighter monetary policy lowers house prices but raises CPI-rent, likely due to higher user costs for landlords or greater relative demand for rental housing. City-level analysis shows that, in response to tighter monetary policy, house prices fall most in cities where supply is inelastic, while CPI-rent tends to rise in cities with lower proportions of households moving from renting to owning. |
| Keywords: | Monetary policy; Inflation dynamics and pressures; Monetary policy framework and transmission |
| JEL: | E31 E52 R21 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocsap:26-2 |
| By: | Coven, Joshua; Golder, Sebastian; Gupta, Arpit; Ndiaye, Abdoulaye |
| Abstract: | Low property taxes amplify lock-in effects for elderly homeowners, limiting housing access for young families. Higher property taxes function as “embedded leverage, †reducing required down payments through a capitalization effect and enabling greater homeownership among younger households. Our overlapping generations model shows that raising California’s property taxes to Texas levels would increase homeownership by six percentage points and young household ownership by eight percentage points. Conversely, higher capital gains taxes worsen lock-in effects and reduce young homeownership. Asset taxes can effectively reallocate housing to higher-valuation households when financial constraints exist, providing an independent justification for property taxation policies. |
| Keywords: | housing affordability; Housing inequality; Property taxes |
| JEL: | H71 R21 H24 J11 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19230 |
| By: | Alisaleh Shariati |
| Abstract: | The productivity performance of Canada’s residential construction has been abysmal since the turn of the century. Output per hour in 2024 was 8 per cent lower than in 2000, reflecting an average annual decline of 0.4 per cent over the period. This report sheds light on this troubling development, with particular attention to the sharp 3.8 per cent average annual decline in labour productivity from 2019 to 2024, which has intensified cost pressure and further undermined housing price affordability in Canada. This report identifies several factors contributing to the construction sector’s poor productivity performance, including: technological stagnation marked by persistent reliance on manual building methods; an industry structure dominated by small firms that are slow to adopt innovations; and regulatory barriers, such as fragmented building codes, lengthy permitting processes, and restrictive zoning. Since 2019, “labour hoarding” (i.e., retaining workers despite reduced activity) was also a significant factor. This collapse in labour productivity after 2019 raised unit labour costs by nearly 8 per cent annually in residential construction, well above economy-wide cost pressures. We estimate this added $6–$7.7 billion to new housing costs, accounting for 15-20 per cent of the increase in new homes from 2019 to 2024, raising average homebuyer costs by $24, 000-$31, 000 in 2024. This report concludes that, without a dramatic improvement in residential construction productivity, Canada will not meet its ambitious housing supply targets. It recommends actionable strategies to boost residential construction productivity — including wider adoption of digital tools and off-site manufacturing, streamlined regulations, and stronger recruitment of skilled workers — which taken together, could lower home costs, boost supply, and ultimately restore housing affordability over the long run. |
| Keywords: | residential construction, labour productivity, housing affordability, housing prices, housing starts, Canada, provinces |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:sls:resrep:2508 |
| By: | Fabian Slonimczyk; Danila Karapsin |
| Abstract: | The CLIP Q-score is a novel, safe, fully reproducible, and computationally efficient method for extracting objective product quality metrics from visual data using contrastive language-image pre-training. We introduce the technique and provide an extensive application to real estate data from an online platform ($\sim500, 000$ images). Our open-source metric aligns with LLM assessments and proves to be a powerful predictor of housing market prices for both sales and rentals. We also show that a higher CLIP Q-store is associated with better liquidity (reduced time on the market), especially for properties on sale. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.01544 |
| By: | Datta, Nikhil (Department of Economics and CAGE, University of Warwick and CEP, London School of Economics); Kulka, Amrita (Department of Economics and CAGE, University of Warwick); Wehbe, Jawad (Department of Economics and CAGE, University of Warwick) |
| Abstract: | House prices are widely used across the social and environmental sciences to inform crucial business and policy making decisions meant to reduce spatial economic inequalities and future-proof locations at risk from environmental shocks. Yet prices are biased by supply and only observed for the selected properties that transact. This paper is the first to introduce a direct measure of latent location demand, using billions of housing searches in Great Britain between 2019 and 2024. Across three causal applications spanning public health, environmental science and economics, we show that searches reveal demand that transaction data either obscure or cannot measure. The COVID-19 pandemic triggered a "race for space", but demand for private greenspace returned to pre-pandemic levels before new supply could respond, leaving planners and developers chasing yester day's preferences. Local flooding generates temporary dips in demand, suggesting people are myopic. New housing supply developments do not induce increases in location demand, implying new town development policies are misguided. In all three cases, transaction data miss the fundamental behavioural response, leading to suboptimal policy design. Finally, we use the search data to construct a measure of excess housing demand for 235, 243 micro neighbourhoods and release it through the WhereToBuild mapping tool. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:820 |
| By: | Barkley, Aaron; Genesove, David; Hansen, James |
| Abstract: | This paper concerns how trade mechanism choice affects how decentralized markets respond to shocks and policy choices. We consider this issue in the context of housing market search. We pose a dynamic search model in which agents can trade by auction or negotiation, both featuring two-sided incomplete information. We apply the model to housing data, estimating buyer and seller value distributions using a structural auction model, primitives that are used in solving for the search model equilibrium. Adding auctions as a second mechanism dampens the shock response of prices and values as agents optimally switch between mechanisms. We also find that policies that increase seller information disclosure at one mechanism can nonetheless benefit sellers and harm buyers, at odds with their intended purpose. Our estimates also highlight how mechanism efficiency assumptions influence search cost inference, with estimated seller negotiation search costs significantly lower under Nash bargaining than incomplete information. |
| Keywords: | Auctions; Price determination |
| JEL: | C78 D44 D47 D83 R21 R31 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19262 |
| By: | Albarracín, Dolores; Hyde, Timothy (Department of Economics, Oberlin College) |
| Abstract: | Flood risk disclosure is expanding rapidly in real estate markets, but if disclosures move demand by commanding attention rather than by conveying information, theirwelfare effects are ambiguous. We examine this tension in a discrete choice experiment where 1, 498 respondents make hypothetical choices among real Gulf Coast properties under a control condition and four disclosure formats varying in informational content and presentation. Absent disclosure, insurance costs barely influence choices; by contrast, when respondents are shown precise flood insurance estimates, they are willing to pay $3.34 in annualized housing costs to avoid each annual premium dollar. Using a separate beliefs elicitation, we estimate each format’s technical information content and construct a Bayesian benchmark for how much choices should respond. Observed responses exceed this benchmark by a factor of four to six; informational content accounts for at most 30 percent of the response to any format. |
| Keywords: | Flood risk, Risk disclosure, Salience, Attention, Willingness to pay, Stated preferences |
| JEL: | D83 D91 Q54 R31 G22 |
| Date: | 2026–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:cxv:wpaper:2603 |
| By: | Lorenzo Neri; Hector Blanco |
| Abstract: | We study how neighborhood change shapes local business demographics and employment. We use the regeneration of London public housing into mixed-income housing as a natural experiment that led to a large influx of more affluent households. In a difference-in-differences design comparing nearby businesses to those located farther away, we find that regenerations shift business composition - in both counts and employment - away from small local shops and toward larger general retail establishments and dining services that cater to the new residents. While we find no effect on total local employment on average, employment does increase in the areas most disadvantaged at baseline, suggesting that neighborhood change can expand local employment opportunities in these areas. |
| Keywords: | Mixed-income housing, Gentrification, Businesses, Employment |
| JEL: | E24 I38 R12 R38 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26209 |
| By: | Wang, Chang |
| Abstract: | Coastal property markets are influenced by unique environmental attributes, yet traditional models often assume their economic value is spatially constant. This study investigates the spatial heterogeneity of beach proximity value in Glynn County, Georgia, using a geographically weighted spatial lag (GWSL) hedonic model. By analyzing 42, 152 residential transactions from 1984 to 2021, we find that the effect of beach proximity on house prices is highly non-stationary, with significant capitalization concentrated in barrier islands. Our results reveal a powerful spatial multiplier, which indicates that property wealth is highly socialized through localized price spillovers. Applying individual local parameters, we estimate a mean Total Marginal Willingness to Pay (MWTP) of $1.06 million for a 100-meter reduction in network distance to the shoreline. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404453 |
| By: | Abramson, Boaz; Van Nieuwerburgh, Stijn |
| Abstract: | A rent guarantee insurance (RGI) policy makes a limited number of rent payments to the landlord on behalf of an insured tenant unable to pay rent due to a negative income or health expenditure shock. We introduce RGI in a rich quantitative equilibrium model of housing insecurity and show it increases welfare by improving risk sharing across idiosyncratic and aggregate states of the world, reducing the need for a large security deposits, and reducing homelessness which imposes large costs on society. While unrestricted access is not financially viable with either private or public insurance providers due to moral hazard and adverse selection, restricting access can restore viability. Private insurers must target better off renters to break even, while public insurers focus on households most at-risk of homelessness. |
| JEL: | D15 D31 D52 D58 E21 G22 G52 H71 R28 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19216 |
| By: | Amina Enkhbold; Serdar Kabaca |
| Abstract: | This note finds evidence of a positive and nonlinear relationship between mortgage interest costs (MIC) and rental inflation: the impact of MIC on rents is small when population growth is near its historical norm, but significantly stronger during periods of rapid population growth. This pattern is consistent with a nonlinear Phillips curve, where cost pressures are more likely to feed into higher prices when demand is elevated. |
| Keywords: | Monetary policy; Inflation dynamics and pressures; Monetary policy framework and transmission |
| JEL: | E31 E32 E52 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocsap:26-14 |
| By: | Ryan Gallagher; Allison Shertzer; Tate Twinam |
| Abstract: | American suburbs are generally characterized by single-family neighborhoods featuring large lots, with few businesses or apartments. To understand the origins of this pattern of development, we construct the first panel dataset of suburban zoning maps and bylaws for a major American metropolitan area and ask how comprehensive land use regulation shaped the form of the suburbs of Chicago today. Our strategy identifies the impact of zoning using land that was undeveloped before such regulations were adopted. The typical post-zoning suburban neighborhood sets aside over 90 percent of land for single-family homes, but adopting the most diverse zoning we observe reduces the single-family share by about half, with most of this land redistributed to businesses and apartments in equal measure. Supply restrictions were also binding earlier than widely believed, and prewar minimum lot size regulations were associated with lots that were 20 percent larger than those that emerged from unregulated markets. Comprehensive land use regulation thus substantially increased the prevalence of single-family residential neighborhoods relative to the suburban form that would have prevailed without zoning, which would have featured more mixed uses and smaller lots. |
| Keywords: | zoning; land use regulation; urban form; suburban development |
| JEL: | K11 N92 R14 R31 R52 |
| Date: | 2026–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:103638 |
| By: | Li, Yixuan; Sun, Wenxin |
| Abstract: | We estimate the amenity value of trees using spatial and temporal variation in tree cover from an exogenous ecological shock: the invasion of the Emerald Ash Borer, which killed millions of ash trees throughout the eastern United States starting in 2002. We estimate heterogeneous responses between renters and homeowners, as these groups may hold different conditions of the contracts. Results show that the substantial reduction in tree cover significantly decreased local property prices, and that renters and homeowners reacted divergently to this unexpected ecological shock. These findings highlight the economic value of environmental amenities and market responses to unanticipated environmental shocks. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404495 |
| By: | Laura Zhao; Jia Qi Xiao; Aidan Witts |
| Abstract: | This paper examines the behavioural patterns of Canadian borrowers as they progress toward mortgage delinquency. Using the full universe of TransUnion borrower credit data from 2015 to 2024, we document that mortgage holders begin increasing their credit utilization roughly two years before their first mortgage delinquency. One to two years before becoming late on their mortgage, households frequently begin missing payments on various consumer credit products, particularly credit cards. This pattern accelerates markedly in the final six months leading up to mortgage delinquency. These empirical patterns provide a consistent and robust set of early warning signals that can be used to monitor emerging household financial stress. |
| Keywords: | Financial system; Financial system regulation and oversight; Household and business credit |
| JEL: | D14 G21 G51 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocsap:26-3 |
| By: | Thomas Michael Pugh; Tao Wang; Taylor Webley |
| Abstract: | Mortgage debt represents over 70% of all Canadian household financial liabilities, and the performance of these debts is critical to the health of the financial system. We explore the relationships between mortgage arrears and key macroeconomic fundamentals such as labour market variables, interest rates, house prices and inflation. We then develop a framework to assess future household mortgage stress. |
| Keywords: | Financial system; Financial stability and systemic risk; Household and business credit; Models and tools; Econometric, statistical and computational methods; Monetary policy; Real economy and forecasting |
| JEL: | E37 G51 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocsap:26-12 |