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Migration and Housing

Paper Session

Friday, Jan. 3, 2020 8:00 AM - 10:00 AM (PST)

Manchester Grand Hyatt, Regatta C
Hosted By: American Real Estate and Urban Economics Association
  • Chair: Danny Ben-Shahar, Tel Aviv University

International Student Migration and Local Housing Markets

Tatiana Mocanu
,
University of Illinois
Pedro Tremacoldi-Rossi
,
University of Illinois

Abstract

This paper analyzes the impact of the international student enrollment boom that occurred in the last decade on local housing markets. We construct a unique sample of American college towns that describes rarely studied local markets. These cities concentrate one third of the U.S. 4-year college enrollment and are characterized by high student representation of housing demand and geographic isolation. Using a modified shift-share instrument based on the historical distribution of foreign students across college towns, we find that international students increased rents by 1% and home prices by 1.6% on average relative to the housing boom peak. By exploiting highly stylized facts of housing markets in college towns, we show how within-city dynamics enabled international inflows to contribute to the replacement of single-family homes near campus and expansion of luxury rentals.

A Tale of Two Cities: The Impact of Cross-Border Migration on Hong Kong's Housing Market

Maggie Hu
,
Chinese University of Hong Kong
Yi Fan
,
National University of Singapore
Xinwei Wan
,
University of Cambridge

Abstract

In this era of globalization, cross-border migration brings capital flows and leads to accelerating
demand for local housing resources. This paper examines the impact of the increase in mainland Chinese migrants between 2001 and 2017 on Hong Kong’s housing market. We find that mainland Chinese buyers pay 4.4% more than locals for housing purchase. This price disparity is greater for larger units at central locations. Sellers enjoy 6.6% higher gross holding period return when they sell to mainland buyers. In the same building, more mainland buyers also lead to a housing price increase and higher gross return in the subsequent year. The “safe haven effect”, or mainland buyer’s confidence in China’s currency and economy, explains over 34% of the price premium they pay, which dominates other channels, such as residential sorting and the weak bargaining power of mainland buyers.

A World Divided: Refugee Centers, House Prices, and Household Preferences

Martijn Droes
,
University of Amsterdam
Hans Koster
,
VU University Amsterdam

Abstract

Using detailed housing transactions data from the Netherlands over the period 1990-2015, we examine the disamenity effect associated with the opening of refugee centers (RCs). This effect captures a negative externality but also reflects the attitudes of incumbent households towards immigration. Using a difference-in-differences methodology, we show that the opening of an RC decreases house prices within 2km by 3-6%. This effect has become stronger over the past decade and is correlated with the local share of nationalist, anti-immigration, votes. Using micro-data on home buyers' characteristics and employing a non-parametric hedonic pricing method, we identify households' individual preferences. The willingness to pay is more negative for larger RCs, suggesting stronger negative externalities. However, we also show that the willingness to pay of foreign-born households is more positive. This is indicative of a more positive attitude towards immigration. Overall, these results imply that when opening RCs, it is advisable to keep them relatively small and locate them in more ethnically diverse areas.

Ideology, Religion, and Cheap Housing: Israeli Settlement of the West Bank

Stuart Gabriel
,
University of California-Los Angeles
Danny Ben-Shahar
,
Tel Aviv University
Roni Golan
,
Tel Aviv University

Abstract

We show that religious belief and national-ideological worldview affect response to economic factors among Israeli West Bank settlers. We identify households that likely hold divergent views on West Bank settlement using political party support as inferred from local statistical area national election results. Findings of aggregate polytomous logistic model estimation show that economic opportunity, notably lower housing costs, prompt West Bank moves among all household types. Also, West Bank moves are elevated among households with deeply held national-religious ideology and ultra-orthodox religious beliefs and in their moves to settlements with similar ideological and political stance. Belief divergence affects response to common economic and policy factors: lower housing costs are more important to West Bank moves among households holding national-religious views, whereas those same factors are mediated and substantially less salient among households lacking fundamental ideological imperatives for settlement. Research findings are corroborated in estimation and simulation of micro-based proportional hazard models of Israeli household West Bank moves. Results have implications for policy and for future control of West Bank territory. Ongoing settlement among all belief groups growth remains importantly dependent on favorable pecuniary economic returns to migration.
Discussant(s)
Yongqiang Chu
,
University of North Carolina-Charlotte
Charles Ka Yui Leung
,
City University of Hong Kong
Piet Eichholtz
,
Maastricht University
Daniel Hartley
,
Federal Reserve Bank of Chicago
JEL Classifications
  • F2 - International Factor Movements and International Business
  • R2 - Household Analysis