Cutting Funding for Police Protection: The Consequences for the Size of Newly-Constructed Housing

David Brasington

The Journal of Real Estate Finance and Economics, 2022, vol. 65, issue 4, No 1, 549-571

Abstract: Abstract Households with children may Tiebout (1956) sort to safe cities. Cities that cut funding for police protection may become less attractive to households with children, spurring housing developers to build smaller houses with fewer rooms. Voting data on police tax levies using regression discontinuity suggests that newly-built houses have more rooms in cities that renew rather than fail their tax levies. The treatment effect peaks in the second year after the tax levy at 1.9 rooms, a sizeable difference over the mean of 6.6 rooms. House size tells a similar story: the difference between newly-built houses in communities that pass and fail public safety tax levies is 317.6 square feet (29.5 square meters), representing 15% of the mean house size in the sample. The results become evident 2 years after the tax levy and persist in the third year before petering out in the fourth year. The effect may stem from communities signaling a decreased commitment to public safety, rather than an increase in the crime rate itself, because cutting small tax levies has about the same effect on house size as cutting large tax levies.

Keywords: Residential construction; House size; Tax levy voting; Police protection; Regression discontinuity; Tiebout sorting; H20; H31; H41; R21; R31 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11146-021-09870-0

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