Affordable Housing and City Welfare

Jack Favilukis, Pierre Mabille and Stijn Van Nieuwerburgh
Additional contact information
Pierre Mabille: New York University

No 867, 2018 Meeting Papers from Society for Economic Dynamics

Abstract: Housing affordability has become one of the main policy challenges for the major cities of the world. Two key policy levers are zoning and rent control policies. We build a new dynamic equilibrium asset pricing model to evaluate the implications of such policies for house prices, rents, production and income, residential construction, income and wealth inequality, as well as the spatial distribution of households within the city. We calibrate the model to New York City, incorporating current zoning and rent control systems. Our model suggests large welfare gains from relaxing zoning regulations in Manhattan, and more modest gains from reducing the size of the rent control program. The former policy is progressive and a Pareto improvement, while rent control reform is regressive in nature and hurts the current beneficiaries.

Date: 2018
New Economics Papers: this item is included in nep-dge and nep-ure
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Affordable Housing and City Welfare (2023)
Working Paper: Affordable Housing and City Welfare (2019)
Working Paper: Affordable Housing and City Welfare (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:867

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