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on Housing and Real Estate |
| By: | José García-Montalvo |
| Abstract: | Do housing markets price flood risk only when a disaster makes it salient? I combine 3.4 million notarial housing transactions in Spain (2007–2025) with official flood-hazard maps and use the October 2024 Valencia DANA, which killed 232 people, as a nationwide shock to the salience of long-available risk information. After the DANA, prices per square meter in 10-year flood zones fell by about 8 % relative to unexposed dwellings, even outside the affected municipalities; repeat-sales estimates imply a decrease of 4-5 %. Before the event, these zones sold at no discount. Within the affected municipalities, demand shifted toward nearby safe housing, increasing prices in those areas and decreasing housing prices in affected areas. |
| Keywords: | capitalization, climate change, flood risk, housing prices, natural disasters, risk salience, valencia |
| JEL: | Q54 R31 Q51 R21 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1600 |
| By: | Megan Evans (Max Planck Institute for Demographic Research, Rostock, Germany); Noli Brazil |
| Abstract: | Urban residents increasingly rely on online tools to searchfor housing, raising new questions as to the role of digital tools in interrupting or reinforcing racialized housing searches. Generative Artificial Intelligence (GenAI), in particular, represents a new intermediary in how neighborhood knowledge is created and distributed in housing platforms and search engines. This study examines whether ChatGPT engages in racial matching by systematically varying user demographics in housing queries across 10 large U.S. cities. Using 14, 400 unique queries per city, we asked GPT-4o for neighborhood recommendations and areas to avoid. Merging AI generated recommendations with census data, we investigate racial patterns in how GPT-4o incorporate user characteristics and neighborhood demographics into their housing guidance. Findings suggest that AI recommendations reflect and may amplify existing patterns of residential segregation through systematic differences in how neighborhoods are recommended to different users. Results have important implications for informing both fair housing policy and the responsible development and regulation of AI systems in the housing market. |
| JEL: | J1 Z0 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2026-041 |
| By: | Garret Christensen; John Voorheis |
| Abstract: | We measure the effects of housing quality and living in renter- versus owner-occupied housing as a child on later life outcomes. Homeownership is the primary source of most US households’ wealth, and homeownership and housing quality potentially have large impacts on children, yet we know relatively little about any long-term effects. Ownership and housing quality are correlated with income, neighborhood characteristics, and many other socioeconomic characteristics, making causal estimation difficult. Using the US Census Bureau’s data linkage infrastructure, we create a new data linkage between the American Housing Survey (1995-2002) and administrative tax data (2016-2019), to investigate adult outcomes such as earnings and having a mortgage or owning a home, while comprehensively controlling for a wide variety of variables, including housing quality. We find strong positive correlations with growing up in a parent-owned home, approximately $2, 000 higher incomes and a 6 percentage point increased likelihood of ownership. However, we find no evidence of causal effects: unobservables that are significantly less correlated with outcome and treatment than observables would drive the coefficients of interest to zero, and family fixed effects models that compare siblings to each other show no effect of years of childhood spent in an owned home or being born into an owned home. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-54 |
| By: | Guillaume Chapelle; Julia Paul-Venturine; Camille Urvoy (CY Cergy Paris Université, THEMA) |
| Abstract: | When a national government relaxes a local regulation, do local ocials comply, or find other ways to keep the same rules in place? We study a 2014 French reform that abolished floor area ratios (FAR), a widely used cap on building density, with the explicit goal of expanding housing construction. We assemble a new geospatial panel tracking three zoning tools floor area ratios, building heights, and coverage ratios | over 15 years across 118 municipalities in the Paris region, linked to building permits, housing stock, and transaction prices. Comparing municipalities where FAR existed before the reform to those where it did not, we show that local governments o set the deregulation by tightening the two instruments they retained: maximum heights fell, coverage ratios tightened, and permit denials rose. Density did not increase in previously regulated areas, and we detect no e ect on prices, consistent with the limited change in supply. The regulatory tightening was strongest where mayors faced closer elections and where property values are higher, not where mayors belong to parties opposing the reforming government, pointing to electoral accountability rather than partisanship. Top-down deregulation can therefore be substantially undercut when local governments retain complementary instruments, suggesting reforms must either limit local discretion directly or realign local incentives. |
| Keywords: | Decentralization, Fiscal federalism, Local political incentives, Upzoning, Land use regulations |
| JEL: | H77 R52 R38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ema:worpap:2026-12 |
| By: | Arka P. Bandyopadhyay |
| Abstract: | I use a deep neural network (DNN) on a proprietary panel of commercial mortgages spanning 1998--2021 to separate liquidity-constrained default from strategic default -- two competing, observationally similar explanations for delinquency that are difficult to disentangle with standard parametric models. Conditional on delinquency, property income (net operating income, or NOI) is a more important determinant of the default rate than leverage (loan-to-value, or LTV), despite LTV's status as the workhorse variable in the commercial mortgage default literature. I recover borrower motive from otherwise observationally equivalent delinquency states through a joint analysis of default rates across NOI and LTV buckets, and show that the resulting thresholds are stable across the 2008 financial crisis and the 2020--2021 COVID-19 shock to commercial real estate. Because commercial borrowers are firms rather than households, and because responsibility for a missed payment is diffused across an organization rather than borne by a single decision-maker, the moral and reputational frictions that discourage strategic default in the residential setting are attenuated -- making commercial mortgages a setting in which strategic behavior should be comparatively easier to detect, and comparatively costly to ignore for investors, servicers, and regulators. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.23901 |
| By: | Patrick Baylis; Judson Boomhower; Jonathan Colmer; John Voorheis |
| Abstract: | The economic burden of natural disasters is shaped by who is exposed, who experiences losses, how those losses alter individual economic trajectories, and how affected communities evolve in the aftermath. We link property-level damage data from over 100 U.S. wildfires to administrative tax and Census data to understand individual level relationships between disaster damage and economic outcomes. Residents of burned areas are wealthier than the U.S. population on average, but within these wildfire perimeters the likelihood that a home burns is negatively correlated with pre-fire income. Home destruction imposes costs beyond rebuilding the property: occupants of destroyed homes experience lower income for three years post-fire, producing cumulative income losses equal to 26 percent of pre-fire annual income. We do not detect income or employment effects for residents without direct property damage. Community recovery is slow and accompanied by changes in composition. Four years after a fire, half of destroyed addresses remain unoccupied and reoccupied addresses house residents with substantially higher incomes than before. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-53 |
| By: | Neil Bhutta; Benjamin J. Keys; Adithya Raajkumar |
| Abstract: | Market power may arise not only from firms, but also from individual salespeople who can exploit informational advantages over consumers. We explore this phenomenon in the mortgage market by examining a Fannie Mae/Freddie Mac fee waiver targeted at lower-income first-time homebuyers. We estimate that mortgage intermediaries capture over 60% of $1.5 billion in total fee waivers during 2023–2024, rather than fully passing these savings through to borrowers. Pass-through varies substantially across loan officers: those with a track record of originating expensive mortgages (independent of lender pricing) pass through less than 20% of the waiver. Our evidence suggests that loan officers retain incentives to steer borrowers into higher-rate mortgages, despite post-crisis regulations designed to limit such practices. |
| JEL: | D14 G18 G21 G51 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35907 |