City-wide effects of new housing supply: Evidence from moving chains

Cristina Bratu, Oskari Harjunen and Tuukka Saarimaa

No 146, Working Papers from VATT Institute for Economic Research

Abstract: We study the city-wide effects of new, centrally-located market-rate housing supply using geo-coded total population register data from the Helsinki Metropolitan Area. The supply of new market rate units triggers moving chains that quickly reach middle- and low-income neighborhoods and individuals. Thus, new market-rate construction loosens the housing market in middle- and low-income areas even in the short run. Market-rate supply is likely to improve affordability outside the sub-markets where new construction occurs and to benefit low-income people.

Keywords: Housing supply; Housing affordability; Filtering; Local public finance and provision of public services; R31; R21; R23; Housing policy (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-eur, nep-isf and nep-ure
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Citations: View citations in EconPapers (4)

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