Essays in Urban and Housing Economics
Citation:
Günnewig-Mönert, Maximilian, Essays in Urban and Housing Economics, Trinity College Dublin, School of Social Sciences & Philosophy, Economics, 2024Download Item:
Abstract:
This dissertation consists of three essays at the intersection of urban economics and the economic effects of affordable housing policy. While they do not use common data or methods, they all tackle fundamental issues concerning affordable housing policy's direct and indirect effects on housing markets and urban and regional dynamics.
Chapter 1 examines the long-run effects of the building design of public housing on neighborhood composition and rental prices in New York City from 1930 to 2010. It documents sizeable effects on racial composition by using a newly assembled dataset on the US census tract level and leveraging the staggered rollout of public housing. White population declined in tracts with public housing projects with significant spillover effects to adjacent tracts, while black population increased only in public housing tracts. The effects on white and black population are driven by a specific project type called the ``Tower in the park'' -- slim brick high-rises and vast green spaces in between. Falling rent prices around ``Towers'' indicate negative demand effects. A cross-sectional analysis finds that ``Towers in the Park'' are more associated with higher incarceration rates than non-towers. However, incarceration rates cannot entirely explain spillover effects on white population. Finally, calibrating a structural neighborhood choice model evaluates the welfare consequences of building design. The model demonstrates that removing public housing can increase amenity values and improve welfare. It shows that welfare gains can be explained by ``Tower in the park'' removal. This suggests that building design can mitigate the negative externalities of public housing.
Chapter 2 contributes to an intensively discussed topic, rent control policies, by examining the effects of a not-yet-studied policy design: the 1920 New York City (NYC) rent control laws. These laws gave elected civil court judges the power to decide in landlord-tenant cases whether a rent increase was ``reasonable'' or not, giving them discretionary authority to set rents according to their notions of ``reasonableness.'' This discretionary approach gave rise to the phenomenon of ``tenant'' and ``landlord'' judges who openly advocated for the interests of their respective sides. The chapter improves on the existing literature on rent control regarding data and identification. It uses the binding nature of court borders between land and tenant-judge and landlord-judge controlled districts and implements a spatial regression-discontinuity-design. This strategy reveals a 10\% increase in market rents within landlord-judge-controlled districts, contrasting with no effect on transaction prices. The chapter rationalizes these results, positing a mechanism whereby rent control undermines landlord profitability in the face of escalating legal expenses, thereby shaping market dynamics.
Chapter 3 explores the responsiveness of housing supply to prices and costs, using the case of Ireland over the last half-century. It uses data for the country and Dublin at a quarterly frequency from the 1970s and a county-level panel from the 1990s. It uses an error-correction framework, supported by an instrumental variables approach, given endogeneity concerns. It shows that responsiveness to prices rose after the 1980s, then fell in the 2000s before rising again. The chapter also documents significant heterogeneity in elasticities at the county level, with supply in Dublin among the least responsive to prices and costs. These findings suggest new avenues for research on the determinants of supply elasticities.
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https://tcdlocalportal.tcd.ie/pls/EnterApex/f?p=800:71:0::::P71_USERNAME:GNNEWIGMDescription:
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Author: Günnewig-Mönert, Maximilian
Advisor:
Lyons, RonanPublisher:
Trinity College Dublin. School of Social Sciences & Philosophy. Discipline of EconomicsType of material:
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