What we’re reading: Housing Job Market Papers We’re Excited About
Where new researchers are looking
The Abundance and Growth Fund team combed through over 1,000 economics job market papers to find the ones relevant to our work on abundance and growth. We’re in the process of posting roundups by topic; first we did innovation, and now we’re doing housing.
There are a few reasons to pay attention to job market papers. They tell you what’s capturing the attention of new researchers and where the field might be heading. They also represent years of work by people trying to impress future employers with fresh ideas and cutting-edge methods. And frankly, I think housing policy is wildly important and still pretty understudied, so I want to direct some eyeballs toward people doing this work.
We found 19 papers covering everything from zoning dynamics to mortgage markets to transit-oriented development. We’ve posted the full list of those papers here. Below are five papers (titles and abstract) that I’m especially excited to dig into.
Zoning and the Dynamics of Urban Redevelopment
Vincent Rollet
Cities increasingly grow through redevelopment—demolishing old buildings to make way for new ones. This paper studies this process and how it is influenced by zoning, which regulates the size and uses of new buildings, using New York City as a case study. I build the first parcel-level panel of a city’s buildings, zoning, and floorspace prices. This data allows me to estimate a new dynamic spatial equilibrium model of floorspace supply and demand. I validate the model using quasi-experimental variation from recent zoning reforms and apply it to evaluate the effects of relaxing regulation on construction and affordability. While zoning strongly constrains city growth, the effects of relaxing regulation take decades to materialize and are limited in inexpensive or densely built areas. This is due to the large fixed costs of redevelopment, which rise sharply with the size of existing buildings. These costs generate considerable persistence in city structure and substantially lower the expected gains from relaxing zoning. Furthermore, due to migration, the affordability benefits of zoning reform largely accrue to households outside the rezoned neighborhoods.
Optimal Land Use Regulations
Shijian Yang
This paper measures land use regulations across neighborhoods in a city and solves for optimal land use regulations within a general equilibrium model of the city with urban externalities. Land use regulations are hard to quantify because they are bundles of statutory rules whose effects depend on local market conditions. To measure land use regulations, I construct a wedge-based measure of land use regulations that is recovered using data on construction costs and property values. I embed neighborhoodlevel regulations into a general-equilibrium model of a city with productivity and amenity externalities. I show that land use regulations cannot perfectly correct for urban externalities. Land use regulations are second-best policies as they do not directly target people, who are the source of urban externalities, but instead act on real estate. I solve numerically for optimal land use regulations across neighborhoods and use automatic differentiation methods to keep the high-dimensional optimal policy problem computationally tractable. Calibrating the model for the city of Chicago and Cook County, I find that the optimal policy delivers significant welfare gains relative to current land use regulations. Optimal regulations depend less on local amenities and productivity and more on spatial linkages between locations, in the form of residents’access to high-paying jobs and firms’ access to workers.
The Expansion and Dynamic Equilibrium Effects of Institutional Landlords
Zhichun Wang
This paper studies how dynamically formed cost efficiencies from scope and density drive institutional landlords’ expansion and, in turn, alter the distribution of welfare across heterogeneous households in single-family housing markets. Institutional landlords convert owner-occupied homes into large, spatially clustered rental portfolios. They constrain households’ access to homeownership while expanding rental opportunities. This leads households to reoptimize between buying and renting, as buyers may face higher prices while renters may benefit from expanded choice sets. We build a dynamic equilibrium model of landlord investment with three key features: (i) oligopolistic landlords’ investment determines the evolution of housing supply structure, (ii) portfolio size and density introduce endogenous variation in landlord costs, and (iii) households substitute within and across buying and renting in an integrated choice set. We estimate the model using firm-property-level data from 2013 to 2022 in the Atlanta metropolitan area. We find that institutional landlords’ expansion achieved a 60.03% reduction in maintenance cost from economies of scope and density. Households’ total welfare increased, with varying effects across renters and buyers. The majority of renters gained from expanded rental supply, while a small fraction of renters, together with most buyers, lost from diminished access to affordable homeownership. Our findings have significant policy implications for regulating institutional landlords’ expansion in the single-family home market.
Taming the Growth Machine: The Long-Run Consequences of Federal Urban Planning Assistance
Tianfang Cui
We study how the federal Urban Planning Assistance Program, which subsidized growing communities in the 1960s to hire urban planners to draft land-use plans, affected housing supply. Using newly digitized records merged with panel data across municipalities on housing and zoning outcomes, we exploit eligibility thresholds and capacity to approve funds across state agencies to identify effects. Planning assistance caused municipalities to build 20% fewer housing units per decade over the 50 years that followed. Regulatory innovation steered construction in assisted areas away from apartments and toward larger single-family homes. Textual evidence related to zoning and development politics further shows that, since the 1980s, assisted communities have disincentivized housing supply by passing on development costs to developers. These findings suggest that federal intervention in planning helped institutionalize practices that complicate community growth, with subsequent consequences for national housing affordability
Mortgage Rates and the Price-to-Rent Ratio Across Space
Alberto Nasi
This paper develops a parsimonious housing market model that conceptualizes residential real estate as both a non-tradable consumption good and an investment asset. The framework embeds households’ joint location–tenure choices, which shape local price-to-rent ratios. I test its predictions using a granular dataset of Italian housing prices and rents and a shift-share instrumental variable design exploiting heterogeneity in mortgage uptake across age groups. The results show that mortgage rate shocks induce spatially asymmetric responses in prices, rents, price-to-rent ratios, population, and tenure choices, consistent with the implications of the model. A structural estimation reproduces these heterogeneous effects and indicates that a positive mortgage rate shock alleviates spatial welfare inequality and narrows the divide between renters and homeowners