Hilber, Christian A. L., Rouwendal, Jan and Vermeulen, Wouter (2014) Local economic conditions and the nature of new housing supply. Discussion Paper (164). London School of Economics and Political Science, Spatial Economics Research Centre, London, UK.
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Abstract
We present a modified open monocentric city model that assumes that land is available for conversion into new housing throughout the city. The model predicts that positive local income shocks (i) increase the city’s share of multi-family housing in new construction and (ii) lead to the construction of smaller units. We exploit the metro area samples of the American Housing Survey from 1984 to 2004 and find support for both predictions. We confirm that the adjustment process is driven by migration and is hindered by strict local land use control. Our findings imply that tight regulation may hamper metro area level labor market adjustment to positive economic shocks not only through limits on the quantity of newly supplied units but also by constraining their type to single-family houses and larger units that may be less suitable for would-be-migrants.
| Item Type: | Monograph (Discussion Paper) |
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| Official URL: | http://www.spatialeconomics.ac.uk/ |
| Additional Information: | © 2014 The Authors |
| Divisions: | Spatial Economics Research Centre Geography & Environment |
| Subjects: | H Social Sciences > HC Economic History and Conditions |
| JEL classification: | R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes 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 R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations |
| Date Deposited: | 07 May 2015 14:35 |
| Last Modified: | 15 Sep 2023 23:34 |
| URI: | http://eprints.lse.ac.uk/id/eprint/61872 |
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