EconPapers    
Economics at your fingertips  
 

Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge Massachusetts

David Autor (), Christopher J. Palmer and Parag Pathak

No 18125, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Understanding potential spillovers from the attributes and actions of neighborhood residents onto the value of surrounding properties and neighborhoods is central to both the theory of urban economics and the development of efficient housing policy. This paper measures the capitalization of housing market spillovers by studying the sudden and largely unanticipated 1995 elimination of stringent rent controls in Cambridge, Massachusetts that had previously muted landlords' investment incentives and altered the assignment of residents to locations. Pooling administrative data on the assessed values of each residential property and the prices and characteristics of all residential transactions between 1988 and 2005, we find that rent control's removal produced large, positive, and robust spillovers onto the price of never-controlled housing from nearby decontrolled units. Elimination of rent control added about $1.8 billion to the value of Cambridge's housing stock between 1994 and 2004, equal to nearly a quarter of total Cambridge residential price appreciation in this period. Positive spillovers to never-controlled properties account for more half of the induced price appreciation. Residential investments can explain only a small fraction of the total.

JEL-codes: D61 H23 R23 R31 R32 R38 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-ure
Note: LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Published as David H. Autor & Christopher J. Palmer & Parag A. Pathak, 2014. "Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge, Massachusetts," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 661 - 717.

Downloads: (external link)
http://www.nber.org/papers/w18125.pdf (application/pdf)

Related works:
Journal Article: Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge, Massachusetts (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:18125

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w18125

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2022-08-25
Handle: RePEc:nbr:nberwo:18125