Submissions Accepted for Presentation at the World Bank Land Conference 2024

In this paper, I develop a model to study the equilibrium effects of price control policies. My framework considers the option for consumers to wait and re-enter the market if items are not immediately allocated due to excess demand. While waiting is commonly associated with the price ceiling, it has received limited attention in prior research. I study the housing market in Shanghai, where a price ceiling has been imposed on new houses since 2017. Using a structural model, I estimate household demand, supply, and waiting costs. The welfare loss associated with the price ceiling is 13 billion USD from 2018 to 2020. Consumer surplus increased by 1.3 billion USD, as most of the gains from lower prices of new houses were offset by waiting and misallocation. Counterfactual analyses suggest that distributing a voucher to buyers instead could significantly reduce welfare loss and achieve more equitable outcomes.

We develop a framework to estimate the economic value of zoning reform in the city of Sao Paulo, Brazil. Using a spatial regression discontinuity design, we show that developers respond to reform with short-run increases in filings for multi-family construction permits in blocks with higher allowable densities. In the medium-run we observe increases in housing availability and reductions in house prices in neighborhoods that were allowed more densification. We estimate welfare with an equilibrium model of housing demand and supply that allows for housing regulation. We find that, in the long-run, the reform produces a 1.9% increase in housing stock and a 0.5% reduction in prices, with substantial heterogeneity across neighborhoods. Consumer welfare gains due to price reductions are small, but increase 4-fold once accounting for changes in built environment, with more gains accruing to college educated and higher income families.

We study how various zoning regulations combine to affect housing supply, rents, and prices, and which regulations policy makers should relax if they want to reduce housing prices. Exploiting cross-sectional variation across space in novel parcel-level zoning data from Greater Boston and a boundary discontinuity design at regulation boundaries, we causally estimate the effect of various zoning regulations on housing supply, prices, and rents of single- and multifamily homes. We find that relaxing density restrictions, alone or combined with relaxing other regulations, is most effective at increasing housing supply, particularly of multifamily properties, and reducing per-housing-unit rents and prices. Our results also suggest that zoning regulations affect per-housing-unit prices by changing housing characteristics and, in effect, increasing the size of the smallest housing unit available. Counterfactual simulations imply that the recent Massachusetts policy to increase building density near transit stations can reduce rents and sale prices, particularly in suburban municipalities.

When natural disasters strike, the impact on housing markets can be far-reaching. This paper explores the unique dynamics of natural disaster-induced migration on the housing market, focusing on Los Angeles—the top destination of the 1930s Dust Bowl (DB) migrants. We employ U.S. Census-linked and geocoded address data to show that the arrival of “Dust Bowlers” significantly impacted the city’s housing market. We find that houses inhabited by Dust Bowl migrants had lower growth rates in prices and rents over the decade. We also find that houses inhabited by non-migrants had higher depreciation of their values the closer they were to Dust Bowl migrants. We also find that neighborhoods that received more Dust Bowl migrants had lower growth rates of house values and rents over the decade. Our research contributes to a better understanding of how natural disaster-induced migration shapes housing markets.