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Migration and Housing

Paper Session

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

Manchester Grand Hyatt San Diego, Regatta C
Hosted By: American Real Estate and Urban Economics Association
  • Chair: Morris Davis, Rutgers 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
,
National University of Singapore

Abstract

In this era of globalization, inflows of global migrants lead to accelerating demand for local housing resources. Employing the influx of migrants from Mainland China to Hong Kong between 2001 and 2017 as a quasi-natural experiment, this paper examines the effect of cross-border migration on Hong Kong housing market. We find that migrant buyers pay 6.2% higher price than locals in housing purchase. Home sellers enjoy 1.6% higher annualized holding period return when they sell to migrant buyers. Higher density of lagged migrant homebuyers in same building leads to housing price increase and higher housing turnover. Possible explanations include safe haven effect, residential segregation and weak bargaining power of migrant buyers.

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

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

Abstract

Due to an increase in the number of refugees entering Europe there is an increasing need for refugee centers (RCs). The placement of such centers has sparked considerable opposition from the local population which goes hand in hand with an increasing anxiety for immigrants. Using detailed transactions data over the period 1990-2015, this paper analyses the impact of RCs on housing prices in the Netherlands. Using the variation in opening dates of RCs and the price developments at the locations of planned but canceled RCs as benchmark, we show that, on average, the opening of a refugee center decreases house prices in the near vicinity by about 6%. Using a non-parametric hedonic pricing approach along the lines of Ekeland et al. (2004), we identify households' preferences for RCs. We show that the willingness to pay is more negative for larger RCs and higher income households. Non-western foreigners have a less negative willingness to pay. Further results indicate that households experience more neighborhood dissatisfaction and nuisance after opening of an RC.

Religion, Ideology, and Housing Affordability: 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 incentives among Israeli West Bank settlers. Electoral support for orthodox-religious and right-wing political parties is used to proxy for household beliefs as well as for the religious and ideological stance of West Bank settlements. Election data show that settlers are heterogeneous in beliefs: roughly one-half of West Bank movers can be described as secular and non-ideological. Findings of aggregate polytomous logistic model estimation show that economic and amenity factors, notably substantially improved housing opportunities, prompt West Bank moves among all household types. Further, West Bank moves are elevated among households with deeply held national-religious ideology and orthodox-religious beliefs and in their moves to settlements with similar religious and political stance. Economic factors are mediated and substantially less salient among settler households lacking fundamental religious or ideological imperatives for West Bank settlement. Research findings are corroborated in estimation of micro-based proportional hazard models of Israeli household West Bank location choice. Results have implications for policy and for future control of territory. Ongoing settlement growth remains importantly dependent on favorable pecuniary economic returns to migration. Those moves could be damped or even reversed in the wake of changes in subsidy of household location choice, government land release for development, or investment in transportation infrastructure, particularly among Israeli localities west of the Green Line.

"
Discussant(s)
Yongqiang Chu
,
University of North Carolina-Charlotte
Charles Ka Yui Leung
,
City University of Hong Kong
Morris Davis
,
Rutgers University
Daniel Hartley
,
Federal Reserve Bank of Chicago
JEL Classifications
  • F2 - International Factor Movements and International Business
  • R2 - Household Analysis