Research
Publications
Housing Supply and Affordability in Canada
with Nathaniel Baum-Snow and Aled ab Iorwerth
Accepted, Canadian Journal of Economics
Abstract:
Since 2000, housing markets across Canada have experienced growth rates in prices that far exceed corresponding rates of household income growth. However, rents have grown at similar rates to household incomes. In the 2015-2024 period, immigration has been a central booster of housing demand and population growth, compensat- ing for declining birth rates. Annual per-capita housing unit new construction rates have grown slightly to about 0.0075 across all types of markets for 1991-2024, even as Canada’s population boomed in 2023-2024, with the composition shifting markedly from single-family homes to multi-family structures. Purpose-built rental construction has recently risen from very low levels. To understand these patterns, we consider local regulatory environments and infrastructure provision, rental housing supports, sources of housing demand growth, and Canada’s macroprudential regulatory institutions and environment.
Working papers
Housing Regulation and Neighborhood Sorting Across the United States
Honorable mention for best student paper at the 2024 Urban Economics Association European meeting.
Winner of the Bank of Canada Student Award.
Abstract:
In this paper, I consider the effect of minimum lot size regulation on welfare and urban structure. I construct a general equilibrium model in which households of heterogeneous incomes choose cities and neighborhoods, value affluent neighbors, and are burdened differently by regulation. The model explains two salient facts about residential income sorting: household incomes decline with residential density within cities, and this gradient is steeper in more productive cities. I provide causal evidence in support. A counterfactual deregulation exercise shows significant and progressive welfare gains for households (exceeding $2000 per household per year) that offset the losses to landowners. The exercise also reveals two surprising results. First, any productivity gains that occur from the expansion of productive cities are largely nullified by the out-migration of affluent households who prefer regulated neighborhoods. Second, deregulation does not exacerbate the neighborhood choice externality arising from the demand for affluent neighbors. These results suggest that the most important consequence of deregulating housing markets is an increase in housing affordability. Other counterfactual exercises underscore the lack of incentives for cities to unilaterally deregulate and show a significant opportunity for improved spatial targeting.
Redevelopment and Gentrification in General Equilibrium
with Guangbin Hong (New Draft)
Abstract:
Redevelopment is a major source of housing supply in dense cities, but it is spatially concentrated and often associated with gentrification and displacement. This paper studies the equilibrium consequences of redevelopment and of policies that restrict it. We first empirically evaluate a teardown tax implemented in two Chicago neighborhoods using a spatial difference-in-differences design and find that it substantially reduced demolitions and modestly curbed displacement. We then develop a dynamic general equilibrium model with forward-looking landlords who choose when to redevelop and heterogeneous households who choose across neighborhoods and vertically differentiated housing units. Redevelopment affects income sorting across neighborhoods and generates filtering dynamics over time. Model counterfactuals show that a spatially targeted teardown tax preserves old, affordable housing in treated areas but shifts redevelopment to untreated areas, raising rents there. The policy benefits lowincome households but harms middle- and high-income households, with the largest losses for the middle. Land values fall in treated areas and rise elsewhere. We conclude with a discussion of the policy implications of our findings.