The effect of local housing ordinances

Thomas Fitzpatrick (), Lisa Nelson, Francisca Richter and Stephan Whitaker

No 12-40, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: The housing and economic crises have exerted a strong and lingering impact on housing markets across the nation. In this paper, we assess the degree to which local anti-blight policies have infl uenced housing market outcomes following the crises. The analysis is performed for cities in Cuyahoga County, Ohio. We measure outcomes that characterize market distress and that may be influenced by local housing ordinances including foreclosure, bulk sales, flipping, vacancy, and tax delinquency. Using matching procedures on linked data containing property, loan, and transaction characteristics, we compare outcomes across properties in regulated and unregulated municipalities. Point of sale inspections and vacancy registrations both decrease the probability that homes are flipped (resold within two years). We find that point of sale inspections are positively associated with foreclosures, property tax delinquency, and sales prices below the tax assessed value. The inspections may be revealing the need for expensive repairs in some homes, which could push borrowers underwater and into foreclosure. We find evidence that vacancy registration requirements do lower vacancy. The discussion around policies for housing market recovery, for the most part, has addressed efforts at the federal level. This analysis integrates in discussion of efforts and policies arising at the local level.

Keywords: Land use; Housing policy; Housing (search for similar items in EconPapers)
JEL-codes: K30 R31 R52 (search for similar items in EconPapers)
Date: 2012-12-30
New Economics Papers: this item is included in nep-ure
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DOI: 10.26509/frbc-wp-201240

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