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Rental Housing

Paper Session

Friday, Jan. 7, 2022 10:00 AM - 12:00 PM (EST)

Hosted By: American Real Estate and Urban Economics Association
  • Chair: Davin Reed, Federal Reserve Bank of Philadelphia

Eviction Risk of Rental Housing: Does It Matter How Your Landlord Finances the Property?

Luis A. Lopez
,
University of Illinois-Chicago
Brent W. Ambrose
,
Pennsylvania State University
Xudong An
,
Federal Reserve Bank of Philadelphia

Abstract

We show, using a stylized model, how the financing choice of landlords can impact eviction decisions in rental markets. Since multifamily loans rely on timely cash flows from tenants, strict underwriting factors can increase the chances that landlords are able to weather income shocks. Lender provided relief may create further leeway for landlords to work out a deal with tenants who default on rental payments. Using comprehensive data on nationwide evictions in the U.S. and performance records on multifamily mortgages, we confirm predictions from our model by documenting a negative relation between evictions and the financing activity by government-sponsored enterprises (GSE) that impose strict underwriting criteria but generally offer borrowers relief during unprecedented income shocks. We also quantify the eviction risks induced by the COVID-19 pandemic for 12 U.S. cities using our empirical model.

Is America's Housing Affordability Problem a Housing Problem?

Andra Ghent
,
University of North Carolina-Chapel Hill
David Leather
,
Chapman University

Abstract

We document what fraction of the housing stock in US cities is affordable to different family types. Rather than looking at what fraction of their income people actually pay in rent in each city, we look at the extent to which the housing stock is affordable using discrete housing expenditure share cutoffs and the distribution of rents. We find that housing affordability is largely a problem for single-parent families and, to a lesser extent, single-person households. Several of the least affordable cities by our metrics are not glamour cities in the US Northeast, California, or South Florida but rather cities with both low incomes and low rents. Finally, we show how overcrowding in many high-cost cities leads to an understatement of the extent of affordability problems if affordability is measured using the actual share of income paid toward rent.

Youth and Family Homelessness Prevention: A Randomized Controlled Trial

David C. Phillips
,
University of Notre Dame
James Sullivan
,
University of Notre Dame

Abstract

We report on a randomized controlled trial comparing two different approaches to homelessness prevention. Between May 2018 and March 2020, we worked with King County, WA to assign 600 families at imminent risk of homelessness to either (1) a combined program of progressive case management and financial assistance relative or (2) flexible financial assistance. Both groups receive $1,000-2,000 of temporary financial assistance, primarily to pay rent, but the first group also receives on-going case management to make and implement a housing stability plan, increase income via employment or public benefits, and manage the emotional challenges of being at risk of homelessness. We measure the effects of this case management on housing stability, as measured by use of homelessness services and housing moves. By summer 2021, we will also link to state administrative records on earnings, healthcare use, public benefit receipt, and arrests.

The Impact of Public Housing on Student Academic Outcomes

Jeehee Han
,
Syracuse University
Amy Ellen Schwartz
,
Syracuse University

Abstract

Is public housing bad for children? Critics charge that public housing projects concentrate poverty and create neighborhoods with limited opportunities, including low-quality schools. However, whether the net effect is positive or negative is theoretically ambiguous and likely to depend on the characteristics of the neighborhood and their quality compared to origin neighborhoods. In this paper, we draw on detailed individual-level longitudinal data on students who move into New York City public housing and examine their standardized test scores over time. Exploiting plausibly random variation in the precise timing of entry into public housing, we estimate credibly causal effects of public housing using both difference-in-differences and event study designs. Further, we control for school mobility and estimate the effects on the quality of schools attended, to shed light on potential underlying mechanisms. We find credibly causal evidence of positive effects of moving into public housing. Academic performance stalls in the first year in public housing – due, perhaps, to disruptive effects of residential and school moves – but rises in subsequent years. Effects are larger for public housing in higher-income neighborhoods and for students moving out of lower-income neighborhoods. Exploratory analyses suggest results may be driven by school quality.
Discussant(s)
Robert Collinson
,
University of Notre Dame
Yichen Su
,
Federal Reserve Bank of Dallas
Elior Cohen
,
University of California-Los Angeles
Winnie Van Dijk
,
Harvard University
JEL Classifications
  • R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location