Hilber, C., Rouwendal, J. and Vermeulen, W. (2021). Local economic conditions and the nature of new housing supply Journal of Economic Geography, 21(3):339--366.
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Affiliated author
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Publication year2021
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JournalJournal of Economic Geography
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.