All Politics is Local
Homeownership, Dissatisfaction and Voting
Matthew Holian
Journal of Housing Economics, forthcoming
Abstract:
This article explores the relationships between homeownership, dissatisfaction with city services, and voting turnout in local elections, using original survey data. Homeowners are more likely than renters to vote, but the pure effect of ownership is not robust to either basic socio-economic controls or an instrumental variable strategy. However, dissatisfaction has a positive, significant and robust effect on likelihood of voting. When interacting homeownership and dissatisfaction, the author finds that dissatisfied homeowners are significantly more likely to vote than both satisfied homeowners and all renters. This finding is consistent with Fischel's (2001) homevoter hypothesis.
----------------------
Geoffrey Wodtke, David Harding & Felix Elwert
American Sociological Review, forthcoming
Abstract:
Theory suggests that neighborhood effects depend not only on where individuals live today, but also on where they lived in the past. Previous research, however, usually measures neighborhood context only once and does not account for length of residence, thereby understating the detrimental effects of long-term neighborhood disadvantage. This study investigates effects of duration of exposure to disadvantaged neighborhoods on high school graduation. It follows 4,154 children in the Panel Study of Income Dynamics, measuring neighborhood context once per year from age 1 to 17. The analysis overcomes the problem of dynamic neighborhood selection by adapting novel methods of causal inference for time-varying treatments. In contrast to previous analyses, these methods do not "control away" the effect of neighborhood context operating indirectly through time-varying characteristics of the family; thus, they capture the full impact of a lifetime of neighborhood disadvantage. We find that sustained exposure to disadvantaged neighborhoods has a severe impact on high school graduation that is considerably larger than effects reported in prior research. We estimate that growing up in the most (compared to the least) disadvantaged quintile of neighborhoods reduces the probability of graduation from 96 to 76 percent for black children, and from 95 to 87 percent for nonblack children.
----------------------
Garrett Glasgow, Paul Lewis & Max Neiman
Urban Affairs Review, forthcoming
Abstract:
Can local governments shape the long-run fortunes of their communities through their own policies, or is the autonomy of localities swamped by larger macroeconomic forces? This study considers the relationship between California municipalities' policy orientations toward residential development at the start of the housing boom in the late 1990s and the subsequent incidence of foreclosures during the housing crisis in 2008 and 2009. The authors find that cities reported to have stronger city council opposition to residential growth had a lower incidence of foreclosures a decade later, even after controlling for the rate of increase in the housing stock and other local economic, demographic, and geographic characteristics. Although the foreclosure crisis was driven by national and global forces, more cautious local government policy approaches to residential growth appeared to moderate the damage.
----------------------
Residential Land Use Regulation and the US Housing Price Cycle Between 2000 and 2009
Haifang Huang & Yao Tang
Journal of Urban Economics, forthcoming
Abstract:
In a sample covering more than 300 cities in the US from January 2000 to July 2009, we find that more restrictive residential land use regulations and geographic land constraints are linked to larger booms and busts in housing prices. The natural and man-made constraints also amplify price responses to the subprime mortgage credit expansion during the decade, leading to greater price increases in the boom and subsequently bigger losses. Contrary to prior literature, our findings indicate a significant link between supply inelasticity and price declines during the bust, whereas Glaeser, Gyourko, and Saiz (2008) found little evidence of such a relationship from an earlier downturn from 1989 to 1996.
----------------------
Tiebout Sorting and Neighborhood Stratification
Patrick Bayer & Robert McMillan
NBER Working Paper, August 2011
Abstract:
Tiebout's classic 1956 paper has strong implications regarding stratification across and within jurisdictions, predicting in the simplest instance a hierarchy of internally homogeneous communities ordered by income. Typically, urban areas are less than fully stratified, and the question arises how much departures from standard Tiebout assumptions contribute to observed within-neighborhood mixing. This paper quantifies the separate effects on neighborhood stratification of employment geography (via costly commuting) and preferences for housing attributes. It does so using an equilibrium sorting model, estimated with rich Census micro-data. Simulations based on the model using credible preference estimates show that counterfactual reductions in commuting costs lead to marked increases in racial and education segregation and, to a lesser degree, increases in income segregation, given that households now find it easier to locate in neighborhoods with like households. While turning off preferences for housing characteristics increases racial segregation, especially for blacks, doing so reduces income segregation, indicating that heterogeneity in the housing stock serves to stratify households based on ability-to-pay. Further, we show that differences in housing also help accentuate differences in the consumption of local amenities.
----------------------
Are homes hot or cold potatoes? The distribution of marketing time in the housing market
Paul Carrillo & Jaren Pope
Regional Science and Urban Economics, forthcoming
Abstract:
This paper analyzes how the distribution of marketing time of residential real estate evolves across time. Using real estate data from a large suburb in the Washington D.C. area we first show that the whole distribution of marketing time shifts to the right when a "hot" housing market in 2003 is compared with a "cold" one in 2007. The shift, however, is not homogenous across the distribution: it is negligible at lower percentiles, very large at the median and much smaller at higher percentiles. Moreover, the shift in the distribution cannot be explained by changes in the characteristics of the units. We then compute (quality adjusted) time on the market distributions and hazard functions for each year during the period 1997 to 2007. We find that while there are no changes at the bottom of the (conditional) distribution over time, higher percentiles, such as the first quartile and the median, are notably more volatile. We also find that the distribution of marketing time is heterogeneous across property types and property location. The focus on the distribution of marketing time rather than solely on the mean or on the median provides a comprehensive description of the evolution of this asset's liquidity and may help homeowners and financial institutions to better grapple with liquidity risk.
----------------------
Emily Drew
Journal of Urban Affairs, forthcoming
Abstract:
Every month residents in a gentrifying Portland neighborhood gather for a cross-racial dialogue in which the long-term African American residents explain to the new white, middle-class residents how neighborhood change, and their new neighbors'"white behaviors" are harmful. Through participant observations at these dialogues for over two years, as well as in-depth interviews, I uncovered how the Restorative Listening Project (RLP) uses dialogue as a strategy for community formation and "antiracist place-making" in Portland's Northeast neighborhoods. The RLP attempts to mitigate the relational effects of gentrification and construct "antiracist place" by (1) positioning people of color as knowledge producers about the institutional and interpersonal effects of racism in the neighborhood; (2) confronting the tactics of white denial; and (3) promoting consciousness about systemic racism. By doing so, the project promotes antiracist awareness that responds to - perhaps reduces - the racial-relational effects of gentrification. However, it also reveals the limits of consciousness-raising projects in the absence of action that resists structural inequalities.
----------------------
Testing the Ownership Society: Ownership and voting in Britain
Mark Huberty
Electoral Studies, forthcoming
Abstract:
Prior work on political effects of personal asset ownership in the United Kingdom has found a causal link between home and share ownership and conservative political preferences and voting. These estimates appear to confirm the "ownership society" thesis tying privatization and asset ownership to improved prospects for conservative parties. This paper proposes a new identification strategy for testing this causal connection that improves on earlier research designs. I exploit temporal variability in panel data to better specify the definition of home ownership and control for unobserved confounders associated with ownership. Under this design, home ownership is found to have no or very weak effects on voting in the 1997 and 2001 General Elections. Where weakly significant results are found, they suggest a mixed effect on partisan outcomes at the ballot box. Finally, while extending this strategy to financial assets does support the "ownership society" hypothesis, doing so illuminates a very different set of identification problems, which point to underlying flaws in the ``ownership society'' argument itself.
----------------------
Hazards of neoliberalism: Delayed electric power restoration after Hurricane Ike
Lee Miller, Robert Antonio & Alessandro Bonanno
British Journal of Sociology, September 2011, Pages 504-522
Abstract:
This case study explores how neoliberal policies shape the impacts of a natural disaster. We investigate the reactions to major damages to the electric power system and the restoration of power in the wake of Hurricane Ike, which devastated the Houston, Texas, metropolitan area in September 2008. We argue that the neoliberal policy agenda insured a minimalist approach to the crisis and generated dissatisfaction among many residents. The short-term profitability imperative shifted reconstruction costs to consumers, and prevented efforts to upgrade the electric power infrastructure to prepare for future disasters. We illustrate the serious obstacles for disaster mitigation and recovery posed by neoliberal policies that privatize public goods and socialize private costs. Neoliberalism neither addresses the needs of a highly stratified public nor their long-term interests and safety.
----------------------
Neighbors and Coworkers: The Importance of Residential Labor Market Networks
Judith Hellerstein, Melissa McInerney & David Neumark
Journal of Labor Economics, October 2011, Pages 659-695
Abstract:
We specify and implement a test for the presence and importance of labor market networks based on residential proximity, in determining the establishments at which people work. Using matched employer-employee data at the establishment level, we measure the importance of these network effects for groups broken out by race, ethnicity, and measures of skill. The evidence indicates that these types of labor market networks do exist and play an important role in determining the establishments where workers work; that they are more important for minorities and the less skilled, especially among Hispanics; and that they appear to be race based.
----------------------
Illinois' Municipal Telecommunications Tax: Tax Base Elasticity and Revenue Potential
Yonghong Wu & David Merriman
Urban Affairs Review, forthcoming
Abstract:
In this article, the tax base elasticity and revenue potential of the municipal telecommunications tax in Illinois over the period 2004 to 2007 are studied. The hypothesis that the municipal telecommunications tax base is perfectly inelastic with respect to variation in the tax rate cannot be rejected. Under the assumption that the tax base is purely inelastic, the maximum revenue potential of this local option tax is estimated. This study suggests that municipal telecommunications taxes have the potential to provide much needed relief to the current and future fiscal stress of municipal governments with minimal economic efficiency costs.
----------------------
The Effect of Power Plants on Local Housing Values and Rents
Lucas Davis
Review of Economics and Statistics, forthcoming
Abstract:
This paper uses restricted census microdata to examine housing values and rents for neighborhoods in the United States where power plants were opened during the 1990s. Compared to neighborhoods with similar housing and demographic characteristics, neighborhoods within 2 miles of plants experienced 3% to 7% decreases in housing values and rents, with some evidence of larger decreases within 1 mile and for large-capacity plants. In addition, there is evidence of taste-based sorting, with neighborhoods near plants associated with modest but statistically significant decreases in mean household income, educational attainment, and the proportion of owner-occupied homes.
----------------------
Keeping up with the Joneses : Neighborhood effects in housing renovation
Andrew Helms
Regional Science and Urban Economics, forthcoming
Abstract:
Despite widespread recognition that housing renovation is influenced by "neighborhood effects," virtually all empirical studies have failed to identify a positive feedback effect between renovation activity and neighborhood quality. By explicitly modeling the spatial interdependence of households' renovation decisions and analyzing a detailed block-level data set, this study finds strong empirical evidence that endogenous neighborhood effects exist as expected. Moreover, by considering four different parameterizations of a "neighborhood set" and comparing the results of these spatial econometric models with a standard OLS estimation, this paper provides insight into some common methodological issues encountered when modeling neighborhood effects.
----------------------
Land Rent and Housing Policy: A Case Study of the San Francisco Bay Area Rental Housing Market
Stephen Barton
American Journal of Economics and Sociology, October 2011, Pages 845-873
Abstract:
In the San Francisco Bay Area, where residential rent is among the highest in the United States, an analysis of data from several sources demonstrates that high rent cannot be accounted for by higher quality, higher operating costs, or higher construction costs. At least one-third of the total rent paid is land rent. Despite increases in real incomes, very-low-income tenants in the Bay Area today have less income remaining after payment of rent than tenants did in 1960. High land rent is a long-term feature of the Bay Area rental market that results mostly from its geography, the density of its urban centers, and a strong economy, rather than from regulatory barriers to new multifamily construction. Deregulation is not a sufficient response to the effects of land rent on low-income tenants. Government should subsidize non-profit housing organizations, particularly land trusts that remove residential land from the market. Taxes on land rent would be a particularly appropriate funding source.