Secondary housing supply

Mense, Andreas (2023) Secondary housing supply. Geography and Environment Discussion Paper Series (40). Department of Geography and Environment, LSE, London, UK.

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Abstract

I estimate the impact of new housing supply on the local rent distribution, exploiting delays in housing completions caused by weather shocks during the construction phase. Increasing the flow of new supply by 1% lowers average rents by 0.2%, and increases disproportionately the number of second-hand units offered for rent. The supply shock affects the entire rent distribution. Employing a quantitative model, I explain this pattern by secondary supply: New supply triggers a cascade of moves that frees up units in all segments of the local market. The impact on rents is similarly strong in locations experiencing growing housing demand.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.lse.ac.uk/geography-and-environment/re...
Additional Information:	© 2023 The Author
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HB Economic Theory
JEL classification:	D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General D - Microeconomics > D4 - Market Structure and Pricing > D40 - General R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets
Date Deposited:	17 Apr 2023 10:36
Last Modified:	14 Sep 2024 04:24
URI:	http://eprints.lse.ac.uk/id/eprint/118645

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