On the Political Economy of Urban Growth: Homeownership versus Affordability
AbstractWe study the equilibrium properties of an overlapping-generation economy where agents choose where to locate, and how much housing to own, and city residents vote on the number of new building permits every period. Under-supply of housing persists in equilibrium under conditions we characterize. City residents invest in housing because they expect their investment to be protected by a majority of voters opposed to urban growth. They vote against growth because they have invested in local housing. This vicious cycle between ownership and urban growth generates a tension between the common housing policy objectives of affordability for all and homeownership for most. Homeownership subsidies increase resistance to urban growth. Capturing the value of new building permits and distributing the proceeds to residents may move the economy away from a welfare-dominated no-growth equilibrium.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8243.
Date of creation: Feb 2011
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Find related papers by JEL classification:
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Todd Sinai & Nicholas Souleles, 2013.
"Can Owning a Home Hedge the Risk of Moving?,"
American Economic Journal: Economic Policy,
American Economic Association, vol. 5(2), pages 282-312, May.
- Francois Ortalo-Magne & Andrea Prat, 2010.
"Spatial Asset Pricing: A First Step,"
STICERD - Theoretical Economics Paper Series
/2010/546, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Jeffrey A. Dubin & D. Roderick Kiewiet & Charles Noussair, 1992.
"Voting On Growth Control Measures: Preferences And Strategies,"
Economics and Politics,
Wiley Blackwell, vol. 4(2), pages 191-213, 07.
- Dubin, Jeffrey A. & Kiewiet, Roderick D. & Noussair, Charles N., 1991. "Voting on Growth Control Measures: Preferences and Strategies," Working Papers 777, California Institute of Technology, Division of the Humanities and Social Sciences.
- Noussair, C.N. & Dubin , Y. & Kiewiet, D.R., 1992. "Voting on growth control measures: Preferences and strategies," Open Access publications from Tilburg University urn:nbn:nl:ui:12-381125, Tilburg University.
- Calabrese, Stephen & Epple, Dennis & Romano, Richard, 2007. "On the political economy of zoning," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 25-49, February.
- Mayer, Christopher J. & Somerville, C. Tsuriel, 2000.
"Land use regulation and new construction,"
Regional Science and Urban Economics,
Elsevier, vol. 30(6), pages 639-662, December.
- Bertaud, Alain & Brueckner, Jan K., 2004. "Analyzing building height restrictions - predicted impacts, welfare costs, and a case study of Bangalore, India," Policy Research Working Paper Series 3290, The World Bank.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:CitEc Project, subscribe to its RSS feed for this item.
- Solé-Ollé, Albert & Viladecans-Marsal, Elisabet, 2012.
"Lobbying, political competition, and local land supply: Recent evidence from Spain,"
Journal of Public Economics,
Elsevier, vol. 96(1), pages 10-19.
- Albert Solé-Ollé & Elisabet Viladecans-Marsal, 2010. "Lobbying, political competition, and local land supply: recent evidence from Spain," Working Papers 2010/45, Institut d'Economia de Barcelona (IEB).
- Albert Sole-Olle & Elisabet Viladecans-Marsal, 2010. "Lobbying, political competition, and local land supply: recent evidence from Spain," Working Papers in Economics 248, Universitat de Barcelona. Espai de Recerca en Economia.
- Stephen Coate, 2011. "Property Taxation, Zoning, and Efficiency: A Dynamic Analysis," NBER Working Papers 17145, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.