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Local economic conditions and the nature of new housing supply

Author

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  • Christian A. L Hilber
  • Jan Rouwendal
  • Wouter Vermeulen

Abstract

We explore the effects of local economic conditions on the type and size of newly constructed housing units in a city. Exploiting the 1984–2004 metro area samples of the American Housing Survey and US Census building permit data from 1980 to 2018, we find that positive local income shocks (i) increase a city’s share of multi-family housing in new construction and (ii) trigger the construction of smaller units. These responses are driven by migration. Our findings are consistent with a modified open monocentric city model that more realistically assumes land is available for conversion into new housing throughout the city.

Suggested Citation

  • Christian A. L Hilber & Jan Rouwendal & Wouter Vermeulen, 2021. "Local economic conditions and the nature of new housing supply," Journal of Economic Geography, Oxford University Press, vol. 21(3), pages 339-366.
    • Handle: RePEc:oup:jecgeo:v:21:y:2021:i:3:p:339-366.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbaa015
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    2. Gyourko, Joseph & Molloy, Raven, 2015. "Regulation and Housing Supply," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1289-1337, Elsevier.
    3. Molloy, Raven, 2020. "The effect of housing supply regulation on housing affordability: A review," Regional Science and Urban Economics, Elsevier, vol. 80(C).
    4. Nikolay Kurichev & Ekaterina Kuricheva, 2020. "Interregional migration, the housing market, and a spatial shift in the metro area: Interrelationships in the case study of Moscow," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(4), pages 689-703, August.
    5. Michael Ball, 2008. "UK Planning Controls and the Market Responsiveness of Housing Supply," Real Estate & Planning Working Papers rep-wp2008-13, Henley Business School, University of Reading.
    6. N. K. Kurichev & E. K. Kuricheva, 2018. "Regional Differentiation of Buyers’ Activity in the Primary Housing Market of the Moscow Agglomeration," Regional Research of Russia, Springer, vol. 8(4), pages 322-333, October.
    7. Maja Nikšić Radić & Siniša Bogdan & Marina Barkiđija Sotošek, 2025. "Unlocking the Nexus: Personal Remittances and Economic Drivers Shaping Housing Prices Across EU Borders," World, MDPI, vol. 6(3), pages 1-22, August.

    More about this item

    Keywords

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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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