Housing
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Matthew Desmond -
Rebecca Diamond
Leaders: Matthew Desmond, Rebecca Diamond
The Housing RG is tasked with exploring the the inner workings of disadvantaged neighborhoods and the low-cost housing market, with a focus on (a) the relationship between housing, employment, and poverty, (b) the causes, dynamics, and consequences of eviction, and (c) the effectiveness of housing vouchers and other housing programs. A sampling of our ongoing projects follows.
Evictions and poverty: Are evictions an important cause of deep and extreme poverty? In collaboration with Raj Chetty, Matt Desmond is starting a project on the long-term consequences of eviction that will reveal the extent to which deep and extreme poverty can be reduced with a “housing first” policy that ramps up federal housing programs.
Housing voucher policy: The U.S. currently spends approximately $20 billion per year on subsidized housing vouchers, but 80 percent of these vouchers are used in moderate- or high-poverty neighborhoods, where opportunities for upward mobility are typically limited. Can voucher policies be recast to increase the number of families moving to “high opportunity” neighborhoods?
Featured Examples
Housing - CPI Research
| Title | Author | Media | |
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| The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco | Rebecca Diamond, Timothy McQuade, Franklin Qian |
The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San FranciscoAuthor: Rebecca Diamond, Timothy McQuade, Franklin QianPublisher: NBER Date: 01/2018 We exploit quasi-experimental variation in assignment of rent control to study its impacts on tenants, landlords, and the overall rental market. Leveraging new data tracking individuals’ migration, we find rent control increased renters’ probabilities of staying at their addresses by nearly 20%. Landlords treated by rent control reduced rental housing supply by 15%, causing a 5.1% city-wide rent increase. Using a dynamic, neighborhood choice model, we find rent control offered large benefits to covered tenants. Welfare losses from decreased housing supply could be mitigated if insurance against rent increases were provided as government social insurance, instead of a regulated landlord mandate. |
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| State of the Union 2017: Housing | Matthew Desmond |
State of the Union 2017: HousingAuthor: Matthew DesmondPublisher: Stanford Center on Poverty and Inequality Date: 06/2017 Racial and ethnic gaps in homeownership, housing wealth, and tax expenditures on housing are still very wide. Whereas 71 percent of white families live in owner-occupied housing, only 41 percent of black families and 45 percent of Hispanic families do. Many nonwhite families were excluded from social programs that facilitated dramatic growth in homeownership in the mid-20th century. The ownership gap is related to an affordability gap. Black and Hispanic families are approximately twice as likely as white families to experience “extreme housing costs,” defined as spending at least 50 percent of income on housing.
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| Home, heart, and being Latina: Housing and intimate relationship power among low-income Mexican mothers | Whitney Welsh, Linda Burton |
Home, heart, and being Latina: Housing and intimate relationship power among low-income Mexican mothersAuthor: Whitney Welsh, Linda BurtonPublisher: Sociology of Race and Ethnicity Date: 07/2016 The authors examine an emergent association between low-income Mexican mothers’ control of housing and power relations in their romantic unions. Guided by valued resource theory, and mothers’ lived racial, ethnic, and gender experiences of navigating access to housing and sustaining intimate unions, the authors used secondary longitudinal ethnographic data on 29 low-income mothers of Mexican descent as exemplar cases to explore (1) mothers’ housing dependencies as they transitioned from their natal homes to coresidential housing with romantic partners, (2) the factors that differentially shaped mothers’ housing options, and (3) how mothers’ control of housing procurement influenced their intimate relationship power. The findings suggest that mothers followed one of five housing dependency pathways, with 25 percent securing housing independently. Most traversed complex and transient levels of dependence on their partners for housing with immigrants and native-born Mexican Americans evincing nuanced differences in their relationship power depending on their housing situations. In most cases, regardless of their national origin (Mexico or the U.S.), mothers’ control of housing procurement directly corresponded to increased relationship power. The importance of considering the impact of race/ethnicity on housing and women’s power in Latino families in future research is also discussed. |
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| Evicted: Poverty and Profit in the American City | Matthew Desmond |
Evicted: Poverty and Profit in the American CityAuthor: Matthew DesmondPublisher: New York: Crown Publishers Date: 03/2016 Even in the most desolate areas of American cities, evictions used to be rare. But today, most poor renting families are spending more than half of their income on housing, and eviction has become ordinary, especially for single mothers. In vivid, intimate prose, Desmond provides a ground-level view of one of the most urgent issues facing America today. As we see families forced into shelters, squalid apartments, or more dangerous neighborhoods, we bear witness to the human cost of America’s vast inequality—and to people’s determination and intelligence in the face of hardship. |
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| Who Wants Affordable Housing in their Backyard? An Equilibrium Analysis of Low Income Property Development | Rebecca Diamond, Timothy McQuade |
Who Wants Affordable Housing in their Backyard? An Equilibrium Analysis of Low Income Property DevelopmentAuthor: Rebecca Diamond, Timothy McQuadePublisher: Journal of Political Economy (revision requested) Date: 01/2016 We estimate the spillovers of properties financed by the Low Income Housing Tax Credit (LIHTC) onto surrounding neighborhood residents. We nonparametrically estimate the impact of LIHTC development on nearby house prices by developing a new difference-in-differences style estimator which exploits smoothness in housing prices across geographic distance and time. We find LIHTC development helps revitalize low income neighborhoods, driving up house prices 6.5%, lowering crime rates, and attracting a more racially and income diverse population. LIHTC development in higher income, low minority areas leads to local house price declines of 2.5% and attracts lower income households. We link these housing price effects to homeowner and renter preferences by developing a generalized hedonic model. Our estimates indicate that an affordable housing development in a low-income area improves welfare by $23,000 per local homeowner and $6500 per local renter, with aggregate welfare benefits to society of $115 million. When viewed as a place-based policy, affordable housing appears to be a desirable way to invest in and revitalize low-income communities. |
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housing - CPI Affiliates
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Matt Desmond |
Housing Research Group Leader; Professor of Sociology |
Princeton University |
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Rebecca Diamond |
Housing Research Group Leader, Assistant Professor of Economics |
Stanford University |
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Jens Ludwig |
McCormick Foundation Professor of Social Service Administration, Law, and Public Policy, Director, University of Chicago Crime Lab, Co-Director, University of Chicago Urban Education Lab |
University of Chicago |
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Lisa Gennetian |
Research Professor, Institute for Human Development and Social Change; Director, the beELL initiative , Director, Poverty and Economic Self-Sufficiency, National Center for Research on Hispanic Families and Children; Senior Researcher, National Bureau of Economic Research |
New York University |
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Robert Haveman |
Professor Emeritus of Public Affairs and Economics, Faculty Affiliate, Institute for Research on Poverty |
University of Wisconsin-Madison |
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Housing - Other Research
| Title | Author | Media | |
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| Subsidized Housing and the Transition to Adulthood | Yana Kucheva |
Subsidized Housing and the Transition to AdulthoodAuthor: Yana KuchevaPublisher: Demography Date: 04/2018 Despite abundant evidence about the effect of children’s socioeconomic circumstances on their transition to adulthood, we know much less about the effect of social policy programs aimed at poor families with children in facilitating how and when children become adults. This issue is particularly important for the U.S. federal subsidized housing program given its long history of placing subsidized units in some of the poorest and most racially segregated neighborhoods. Using counterfactual causal methods that adjust for the length of receipt of subsidized housing, I estimate the effect of subsidized housing on teenage parenthood, household formation, and educational attainment. I find that the subsidized housing program has either null or positive effects on the transition to adulthood and that these effects vary by both race and gender. These results underscore the importance of considering whether social programs have differential effects on the life chances of individuals based on both race and gender. |
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| Gentrification and the Amenity Value of Crime Reductions: Evidence from Rent Deregulation | David H. Autor, Christopher J. Palmer, Parag A. Pathak |
Gentrification and the Amenity Value of Crime Reductions: Evidence from Rent DeregulationAuthor: David H. Autor, Christopher J. Palmer, Parag A. PathakPublisher: NBER Date: 10/2017 Gentrification involves large-scale neighborhood change whereby new residents and improved amenities increase property values. In this paper, we study whether and how much public safety improvements are capitalized by the housing market after an exogenous shock to the gentrification process. We use variation induced by the sudden end of rent control in Cambridge, Massachusetts in 1995 to examine within-Cambridge variation in reported crime across neighborhoods with different rent-control levels, abstracting from the prevailing city-wide decline in criminal activity. Using detailed location-specific incident-level criminal activity data assembled from Cambridge Police Department archives for the years 1992 through 2005, we find robust evidence that rent decontrol caused overall crime to fall by 16 percent—approximately 1,200 reported crimes annually—with the majority of the effect accruing through reduced property crime. By applying external estimates of criminal victimization’s economic costs, we calculate that the crime reduction due to rent deregulation generated approximately $10 million (in 2008 dollars) of annual direct benefit to potential victims. Capitalizing this benefit into property values, this crime reduction accounts for 15 percent of the contemporaneous growth in the Cambridge residential property values that is attributable to rent decontrol. Our findings establish that reductions in crime are an important part of gentrification and generate substantial economic value. They also show that standard cost-of-crime estimates are within the bounds imposed by the aggregate price appreciation due to rent decontrol. |
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| Preservation of Affordable Rental Housing: Evaluation of the MacArthur Foundation's Window of Opportunity Initiative | Heather L. Schwartz, Raphael W. Bostic, Richard K. Green, Vincent J. Reina, Lois M. Davis, Catherine H. Augustine |
Preservation of Affordable Rental Housing: Evaluation of the MacArthur Foundation's Window of Opportunity InitiativeAuthor: Heather L. Schwartz, Raphael W. Bostic, Richard K. Green, Vincent J. Reina, Lois M. Davis, Catherine H. AugustinePublisher: RAND Corporation Date: 06/2016 In 2000, the MacArthur Foundation began the Window of Opportunity initiative, a 20-year, $187 million project intended to help preserve privately owned affordable rental housing. The authors of this report assess whether the initiative achieved its goals and identify lessons learned about effective preservation practices. In doing so, they also provide a summary of the evolution of practices in preserving affordable rental housing, discuss challenges and opportunities for preservation going forward, and identify lessons learned that may help other philanthropies in their own philanthropic initiatives, even if they do not pertain to housing. The authors find that the MacArthur Foundation met most of its goals for Window of Opportunity. As the initiative nears its end, large nonprofit preservation developers/owners have greater financial capacity and reputation, there are more resources and vehicles for preservation, and, to a lesser degree, the policy environment has changed to the benefit of preservation. However, Window of Opportunity has not achieved its most ambitious federal policy goals and is likely to fall short of its target for the number of privately owned affordable rental housing that will be preserved. |
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| Do Rising Top Incomes Lead to Increased Borrowing in the Rest of the Distribution? | Jeffrey P. Thompson |
Do Rising Top Incomes Lead to Increased Borrowing in the Rest of the Distribution?Author: Jeffrey P. ThompsonPublisher: Finance and Economics Discussion Series 2016-046 Date: 05/2016 One potential consequence of rising concentration of income at the top of the distribution is increased borrowing, as less affluent households attempt to maintain standards of living with less income. This paper explores the “keeping up with the Joneses” phenomenon using data from the Survey of Consumer Finances. Specifically, it examines the responsiveness of payment-to-income ratios for different debt types at different parts of the income distribution to changes in the income thresholds at the 95th and 99th percentiles. The analysis provides some evidence indicating that household debt payments are responsive to rising top incomes. Middle and upper-middle income households take on more housing-related debt and have higher housing debt payment to income ratios in places with higher top income levels. Among households at the bottom of the income distribution there is a decline in non-mortgage borrowing and debt payments in areas with rising top-income levels, consistent with restrictions in the supply of credit. The analysis also consistently shows that 95th percentile income has a greater influence on borrowing and debt payment across in the rest of the distribution than the more affluent 99th percentile level. |
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| The Neighborhood Context of Latino Threat | Matthew Hall, Maria Krysan |
The Neighborhood Context of Latino ThreatAuthor: Matthew Hall, Maria KrysanPublisher: Sociology of Race and Ethnicity Date: 04/2016 In recent years, the size of the Latino immigrant population has swelled in communities throughout the United States. For decades, social scientists have studied how social context, particularly a minority group’s relative size, affects the sentiments of the dominant group. Using a random sample survey of five communities in suburban Chicago, the authors examine the impact of Latino population concentration on native-born white residents’ subjective perceptions of threat from Latino immigrants at two micro-level geographies: the immediate block and the surrounding blocks. After controlling for Latino population size in surrounding blocks, percentage Latino in the immediate block does not influence perceptions of threat from Latino immigrants. The effect of surrounding blocks’ population size is consistent with group threat theories for white residents: the larger the Latino population, the greater the perceived threat. |
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