The Unassuming Economist

On cross-country:

• Housing and the Business Cycle Revisited – University of Augsburg
• Prime Global Cities Index – Q1 2018 – Knight Frank
• How 3D printing is revolutionizing the housing industry – TechCrunch

On the US:

• Fueling a Frenzy: Private Label Securitization and the Housing Cycle of 2000 to 2010 – NBER
• The Great Housing Reset – Citylab
• Rising incomes, rising rents, and greater homelessness – McKinsey
• This is the Wrong Time to Cut Back on Public Housing – Institute for Policy Studies
• Tax Luxury Housing to Fund Social Housing – Inequality.org
• Black and White Homeownership Rate Gap Has Widened Since 1900 – Zillow
• 50 Years After the Fair Housing Act – Inequality Lingers – Trulia
• Government Remains the Biggest Obstacle to Fair Housing – The American Prospect
• Housing Confidence Hits New All-Time High – Fannie Mae
• Seattle Executives Join Opposition to New Tax to Fund Housing – Bloomberg
• Civil Rights Advocates Sue Ben Carson for Suspending Fair Housing Act Enforcement Rule – Slate
• Why Economists Don’t Like the Mortgage Interest Deduction – Federal Reserve Bank of St. Louis
• With the Foreclosure Crisis Behind Us, Have We Stopped Adding Single-Family Rentals? – Harvard Joint Center for Housing Studies
• How Recent Tax Reform Sounds a Clarion Call for Real Reform of Homeownership Policy – Tax Policy Center

On other countries:

• [Australia] A playful solution to the housing crisis – TED
• [Canada] High House Prices in Urban British Columbia: Foreign Buyer Fact or Fiction? – Kumtuks
• [Canada] Why High House Prices: Vancouver Academics vs Ottawa Economists – Kumtuks
• [Canada] Sam Sullivan blames government policies, not Chinese buyers, for high Vancouver housing prices – Straight
• [Canada] Montreal Is Canada’s Next Hot Housing Market – Bloomberg
• [China] North Korea Border Town Is Now China’s Hottest Property Market – Bloomberg
• [Colombia] Rental Housing in Bogota, Columbia: Challenges and Opportunities for Creating More Multifamily Properties – Cornell Real Estate Review
• [Spain] A Drone’s Eye View of Spain’s Housing Bubble – Citylab

Photo by Aliis Sinisalu

On the US:

• Nine rules for better housing policy – Brookings
• Can more housing supply solve the affordability crisis? Evidence from a neighborhood choice model – Regional Science and Urban Economics
• Land Use Regulations, Migration and Rising House Price Dispersion in the U.S. – University of Southern California
• Priced out of the American dream – Financial Times
• America Can’t Afford Ben Carson’s Housing Cuts – Bloomberg
• Getting it Right: Examining the Local Land Use Entitlement Process in California to Inform Policy and Process – Berkeley: Center for Law, Energy & the Environment
• Learning from Hurricane Sandy? Rising Seas and Housing Values in New York – ECONOFACT

On other countries:

• [Australia] Is Australia’s Housing Boom (Finally) Coming to an End? – Wall Street Journal
• [Canada] Mortgage Growth in Canada Hasn’t Been This Weak Since 2001 – Bloomberg
• [Canada] Canada’s Economy and Household Debt: How Big Is the Problem? – Bank of Canada
• [China] China’s Dandong property prices jump on Korea talks – Financial Times
• [Hong Kong] What Could End Hong Kong’s Property Boom? Here Are Some Triggers – Bloomberg
• [Israel] Housing Market in Israel – IMF
• [New Zealand] Loan-to-Value Ratio Restrictions and House Prices – Reserve Bank of New Zealand
• [New Zealand] Housing Leverage and Consumption Expenditure – Evidence from New Zealand Microdata – Reserve Bank of New Zealand
• [New Zealand] Land Use Regulation, The Redevelopment Premium and House Prices – University of Auckland
• [United Kingdom] Is innovation the answer to the chronic under-supply of housing in the UK? – Cambridge Centre for Housing & Planning Research

Photo by Aliis Sinisalu

From ECONOFACT:

The Issue:

“The chance of large-scale coastal flooding episodes is increasing. In the last few decades, sea levels have been rising steadily at about 3 centimeters per decade and many estimates expect that this rate will accelerate going forward. At the same time, the population living in coastal counties in the United States grew by 40 percent between 1970 and 2010 and is projected to continue rising. Are people considering the increased risk of flooding associated with sea level rise in their housing decisions? Looking at what happened to property values in New York City after Hurricane Sandy gives us a first look at how those on the front lines may be responding.”

The Facts:

• “Past research has found the response of homebuyers towards flooding risks and the threat of other climate-related hazards to be short-lived. While a region’s exposure to hurricanes or flooding does not vary greatly from one year to the next, many studies have found that homebuyers tend to take these risks much more into account immediately following hurricanes and other catastrophic events. However, these effects tend to be short-lived —very often vanishing completely within five years (see here and here). Flood insurance take-up rates, for instance, have tended to spike the year after a flooding event and then gradually decline to the levels that prevailed before the flood. This response happened not only in the flooded zones but – to a lesser extent — also in non-flooded areas in the same television media markets according to one study. While the risk of flooding remains objectively the same, people may be more aware of it following a flood and then tend to forget about it with the passage of time. It is also possible that, as time goes by, new people who have had less direct exposure to the risk move into the area. These facts suggest a gap between objective probabilities of flood risk and households’ perceptions of this risk. In addition to the psychological biases mentioned, coordination problems, misguided policies, and the expectation of financial assistance by the government in case of disaster might contribute to a mismatch between home prices and damage risk.”

• “Hurricane Sandy was a climatic event of unprecedented proportions that impacted the Greater New York region. The storm hit New York on October 29, 2012. At the time, Sandy was the largest Atlantic hurricane on record and the second costliest in U.S. history (behind Hurricane Katrina), with damages amounting to over $19 billion. Hurricane Sandy flooded 17 percent of New York City (or nearly 90,000 buildings).”

Continue reading here.

From the IMF’s latest report on Israel:

• On house price developments: “Housing price increases have slowed significantly but supply may also be weakening. After more than doubling since 2008, house price rises slowed to under two percent y/y in 2017, below household income growth. Transactions also declined, with investor activity likely affected by the proposed tax on owners of more than two apartments, and first-time buyers waiting to see the “Buyer’s Price” program impact.5 But residential investment began to decline in mid-2017, and a 16 percent y/y fall in starts in H2’2017 suggests further falls to come.”
• On financial sector and housing policies:
  • “Israel’s banking system is healthy. Capitalization, loan quality, and profitability continued to improve in 2017. The leverage ratio rose to 7.5 percent, exceeding that in most advanced economies. All five of the largest banks met the capital requirement, enabling them to resume or raise dividend payouts in 2017.”
  • “Household debt remains relatively low, with well-contained risks, and business debt has stabilized after declining significantly. The household debt ratio has been rising for a decade, but remains low at just over 40 percent of GDP. The BoI has maintained strong macroprudential measures in the housing area (…). As a result, new mortgages with LTVs over 75 percent have been almost eliminated, and the share of lower LTV loans has risen. However, consumer credit, which usually has a variable interest rate, is almost two-fifths of total household debt, calling for close monitoring. Business sector debt has declined to below 70 percent of GDP, with the stock of corporate bonds falling to 19 percent of GDP by 2017, 9 percent of GDP less than their former ratio. Limited supply and the global search for yield may be contributing to low spreads on these bonds.”
  • “Slowing housing construction despite still high housing prices calls for reforms to make supply more responsive to needs and to improve housing affordability. The authorities estimate that 45–50 thousand new housing units are needed annually during 2015–2020, rising to 60 thousand annually by 2026–35. Completions appear sufficient in 2016–2017, but shortfalls could return given recent falls in housing starts. Hence, continued reform efforts are needed:
    • “Land supply, competition, and regulation. Increased land auctions are needed to avoid supply constraints and to help make construction more responsive to variations in demand. Construction costs and time to build should be reduced by streamlining building regulations and expanding foreign construction company access.”
    • “Municipal incentives. To encourage timely municipal approval of residential development, residential property taxes should be raised—while avoiding work disincentives—coupled with predictable central government support to municipalities for the up-front costs of additional infrastructure and public services.”
    • “Expand commutable areas and increase urban density. Well-developed public transportation can expand commutable areas and relieve demand in major centers, hence plans to establish metropolitan authorities are welcome. Urban renewal should be increased as density in Tel Aviv is relatively low, including through the proposed fast-track approvals of mixed use development.”

      

On the US:

• How Big is the Wealth Effect? Decomposing the Response of Consumption to House Prices – University of Maryland
• Housing Finance, Boom-Bust Episodes, and Macroeconomic Fragility – University of Missouri
• 50 years later, how close are we to making fair housing a reality? – The Atlantic
• What We Get Wrong About Closing the Racial Wealth Gap – Insight Center for Community Economic Development (coverage by Citylab and Quartz)
• U.S. Homebuying Slows Down, But Not for Hispanics – Citylab
• Stringency of Land-Use Regulation: Building Heights in US Cities – IDEAS
• Unpacking the “housing shortage” puzzle – Brookings
• Home Price Charts Updated – Case-Shiller – Real Estate Decoded
• Smartest Month to Sell a Home by Metro – ATTOM
• US housing: how Fannie Mae and Freddie Mac became rental powerhouses – Financial Times

On other countries:

• [Canada] Canadian Housing Market Still Highly Vulnerable – CMHC
• [Spain] Spain’s Palma to ban holiday rentals after residents’ complaints – BBC

Photo by Aliis Sinisalu