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Research Details

Housing Supply and Housing Affordability: Evidence from Rents, Housing Consumption and Household Location

Abstract

We show that housing supply constraints distort housing affordability by less than their estimated effects on house prices suggest. In our dynamic model, supply constraints increase the price of housing services by only half has much as the purchase price of a home, and they cause only small changes in housing consumption and household location. We evaluate these predictions using data from US metropolitan areas from 1980 to 2016. We find sizeable effects of supply constraints on house prices, but modest-to-negligible effects on rent, lot size, structure consumption, location choice within metropolitan areas, sorting across metropolitan areas, and housing expenditures.

Type

Working Paper

Author(s)

Charles Nathanson, Raven Molloy, Andrew Paciorek

Date Published

2020

Citations

Nathanson, Charles, Raven Molloy, and Andrew Paciorek. 2020. Housing Supply and Housing Affordability: Evidence from Rents, Housing Consumption and Household Location.

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