Just starting: #AREUEA2021 session on affordable housing. First up, Doug McManus & co-authors look at geographic patterns of housing filtering.

Key findings: MSAs vary widely in income filtering rates (income of HHs living in homes as homes age). Large positive filtering in supply constrained metros like DC & LA, downward filtering in slow-growth metros (Detroit & Chicago). Lots of within-metro variation too.

Great comment from @EvanMast2: urban econ literature shd find better language to describe types of filtering (changes in prices/rents of homes over time vs changes in income of residents of those homes). Agree!

How do we separate housing cohort effects from aging effects? Homes built in similar time window share design & structural characteristics, which can independently influence price/desirability over time (eg who's excited to buy 1970s split level ranch).

Next presenting: Xiaoyu Zhang & coauthors on political economy of upgrading public housing. (Hmm...)

(Singapore offers such a rich empirical setting for lots of urban econ questions, given its unusually large share of social housing & high degree of centralized govt control. Can we imagine US politicians competing for votes by offering more $ to upgrade public housing??)

Key findings: incumbent political party offers more housing upgrades to wards that support them. Upgrades boost housing prices in surrounding neighborhood (positive externality). Patronage may be politically efficient, but distort housing markets.

Next presenter: @Siqi_MIT & coauthors on role of informal housing in Chinese urban areas lowering urbanization costs wrt labor market & housing outcomes.

Siqi motivates paper w/ fascinating paradox: China's cities have experienced huge population growth (in-migration from rural areas) combined w/ soaring hsg prices. Yet, homelessness is almost non-existent. How can this be?? Ans: informal hsg acts as safety valve.

(Would strongly recommend this paper to affluent Dupont Circle residents who are convinced that poor people would prefer to be homeless than live in below-grade apartments.)

Key findings: I'm shocked--shocked!--to learn that elasticity of housing supply matters! Cities w/ greater availability of land to provide informal housing can accommodate larger population in-flows & increases in GDP. Perhaps some lessons for supply-constrained US cities??

Last up in the session: Jim Shilling & coauthors on vulnerability of low-income households to rent increases (also super topical).

Key findings: renters are willing to pay premium to purchase homes in order to hedge against expected future rent increases. Premium is higher in supply-constrained markets & varies substantially over time.

Super interesting policy suggestion: instead of local govts imposing rent controls, should be market for insurance contracts against large rent increases (like other uncertain adverse outcomes).

(Noting that some economists have also proposed housing price insurance for owners, to guard against wealth losses, esp close to retirement age. Would love to hear from folks who study insurance why neither of these insurance markets have emerged?)

And we're out! Don't forget to join WREN http://gather.town  networking session at 6pm EST tonight!
https://gather.town/app/lYUd4A6k3EPsfKvF/WREN2021