Housing supply and housing bubbles Glaeser, Edward L.; Gyourko, Joseph; Saiz, Albert
Journal of urban economics,
09/2008, Volume:
64, Issue:
2
Journal Article
Peer reviewed
Open access
Like many other assets, housing prices are quite volatile relative to observable changes in fundamentals. If we are going to understand boom-bust housing cycles, we must incorporate housing supply. ...In this paper, we present a simple model of housing bubbles that predicts that places with more elastic housing supply have fewer and shorter bubbles, with smaller price increases. However, the welfare consequences of bubbles may actually be higher in more elastic places because those places will overbuild more in response to a bubble. The data show that the price run-ups of the 1980s were almost exclusively experienced in cities where housing supply is more inelastic. More elastic places had slightly larger increases in building during that period. Over the past five years, a modest number of more elastic places also experienced large price booms, but as the model suggests, these booms seem to have been quite short. Prices are already moving back towards construction costs in those areas.
The rapid internationalisation of the Spanish property market has triggered debates about the main characteristics of emerging post-crisis urban dynamics. Financial and urban policy reforms have ...shaped a model depicted by incessant rent increases and displacements. Echoing these concerns, this article addresses two interconnected objectives about the way policy restructuring encouraged transnational investments into Spanish real estate and the concomitant socio-spatial effects this wider asset reshuffling has produced. Both queries are discussed by pinpointing the multi-scalar investment strategies of the private equity firm, Blackstone, which emerged as the predominant institutional investor during the recovery phase of the Spanish property market. The article initially sketches out the trajectory of the political economy of housing in Spain, and then it focuses on the strategies pursued by Blackstone for the acquisition of real estate and housing stock. The following sections connect the nodes of the financial chain that link this investor to former social housing tenants whose homes are by now owned by Blackstone. The spatial and social effects of this change in property ownership demonstrate the importance of in-depth research about the financial nodes that interplay with and shape the post-crisis urban condition in and beyond Southern Europe.
Le coliving à Bruxelles consiste en la location, au sein d’un même bâtiment, de chambres accompagnées d’espaces communs et de services, opérée par des sociétés privées. Par sa formule tout-inclus ...meublée et flexible, cette offre de niche mais en croissance rapide s’adresse particulièrement aux jeunes expatrié·es présent·es à Bruxelles. L’analyse du développement de cette offre immobilière récente montre comment la financiarisation du secteur résidentiel locatif privé s’appuie sur la création de nouveaux produits formatés afin que les investisseurs puissent facilement y injecter leurs capitaux et en tirer des rendements élevés. À Bruxelles, le coliving est établi avant tout dans des maisons unifamiliales des quartiers du sud-est de la première couronne urbaine.
De Brusselse colivingsector bestaat uit privébedrijven die in hetzelfde gebouw gemeubileerde kamers verhuren, met inbegrip van gemeenschappelijke ruimten en bepaalde diensten. Door de flexibele “all-in” formule spreekt dit snel groeiende nicheaanbod vooral jonge expats in Brussel aan. Uit de analyse van de ontwikkeling van dit recente vastgoedaanbod blijkt hoezeer de financialisering van de sector van de privéhuurwoningen berust op de creatie van nieuwe ingedeelde producten, zodat investeerders er gemakkelijk hun kapitaal in kunnen steken en er hoge rendementen uit kunnen halen. In Brussel wordt vooral aan coliving gedaan in eengezinswoningen in de zuidoostelijke wijken van de eerste stadskroon.
Coliving in Brussels consists in the renting of rooms in a building with shared spaces and services by private companies. With its furnished and flexible “all-inclusive” formula, this niche market is growing rapidly and is aimed especially at young expatriates in Brussels. The analysis of the recent development of this type of housing supply shows how the financialisation of the private residential rental sector is based on the creation of new products designed in order for investors to inject their capital easily and obtain high returns. In Brussels, coliving exists mainly in single-family houses in the south-east neighbourhoods of the inner ring.
Le coliving à Bruxelles consiste en la location, au sein d’un même bâtiment, de chambres accompagnées d’espaces communs et de services, opérée par des sociétés privées. Par sa formule tout-inclus ...meublée et flexible, cette offre de niche mais en croissance rapide s’adresse particulièrement aux jeunes expatrié·es présent·es à Bruxelles. L’analyse du développement de cette offre immobilière récente montre comment la financiarisation du secteur résidentiel locatif privé s’appuie sur la création de nouveaux produits formatés afin que les investisseurs puissent facilement y injecter leurs capitaux et en tirer des rendements élevés. À Bruxelles, le coliving est établi avant tout dans des maisons unifamiliales des quartiers du sud-est de la première couronne urbaine.
Le coliving à Bruxelles consiste en la location, au sein d’un même bâtiment, de chambres accompagnées d’espaces communs et de services, opérée par des sociétés privées. Par sa formule tout-inclus ...meublée et flexible, cette offre de niche mais en croissance rapide s’adresse particulièrement aux jeunes expatrié·es présent·es à Bruxelles. L’analyse du développement de cette offre immobilière récente montre comment la financiarisation du secteur résidentiel locatif privé s’appuie sur la création de nouveaux produits formatés afin que les investisseurs puissent facilement y injecter leurs capitaux et en tirer des rendements élevés. À Bruxelles, le coliving est établi avant tout dans des maisons unifamiliales des quartiers du sud-est de la première couronne urbaine.
De Brusselse colivingsector bestaat uit privébedrijven die in hetzelfde gebouw gemeubileerde kamers verhuren, met inbegrip van gemeenschappelijke ruimten en bepaalde diensten. Door de flexibele “all-in” formule spreekt dit snel groeiende nicheaanbod vooral jonge expats in Brussel aan. Uit de analyse van de ontwikkeling van dit recente vastgoedaanbod blijkt hoezeer de financialisering van de sector van de privéhuurwoningen berust op de creatie van nieuwe ingedeelde producten, zodat investeerders er gemakkelijk hun kapitaal in kunnen steken en er hoge rendementen uit kunnen halen. In Brussel wordt vooral aan coliving gedaan in eengezinswoningen in de zuidoostelijke wijken van de eerste stadskroon.
Coliving in Brussels consists in the renting of rooms in a building with shared spaces and services by private companies. With its furnished and flexible “all-inclusive” formula, this niche market is growing rapidly and is aimed especially at young expatriates in Brussels. The analysis of the recent development of this type of housing supply shows how the financialisation of the private residential rental sector is based on the creation of new products designed in order for investors to inject their capital easily and obtain high returns. In Brussels, coliving exists mainly in single-family houses in the south-east neighbourhoods of the inner ring.
This paper investigates the influence of hot money on the return and volatility of the Chinese stock market using a nonlinear Granger causality test and a new GARCH-class model based on mixed data ...sampling regression (GARCH–MIDAS). The empirical results suggest that no linear or nonlinear causality exists between the growth rate of hot money and the Chinese stock market return, implying that the Chinese stock market is not driven by hot money and vice versa. However, hot money has a significant positive impact on the long-term volatility of the Chinese stock market. Furthermore, the dependence between the long-term volatility caused by hot money and the total volatility of the Chinese stock market is time-variant, indicating that huge volatilities in the stock market are not always triggered by international speculation capital flow and that Chinese authorities should further focus on more systemic reforms in the trading rules and on effectively regulating the stock market.
•Nonlinear Granger causality test is used to probe the lead–lag relationship of hot money and China’s stock market.•Long-term volatility of China’s stock market caused by hot money is investigated by GARCH–MIDAS model.•Huge volatilities in the China’s stock market are not always triggered by international speculation capital flow.
The paper investigates the extent of the impact from “hot money” or speculative capital inflow on the fluctuations of China's real estate market and stock market. The results indicate that hot money ...has driven up property prices as well as contributed to the accelerating volatilities in both markets due to its enormous size and its short-term characteristic of investing. In particular, we find that hot money ranks as the second largest contributor in the fluctuations of China's real estate prices. In the “risky” regime, which corresponds to more inflows and higher volatility of hot money, the effects are even more prominent.
This paper argues that an increased application of quasi-experimental and experimental techniques will improve understanding about core environmental economics questions. This argument is supported ...by a review of the limitations of associational evidence in assessing causal hypotheses. The paper also discusses the benefits of experiments and quasi-experiments, outlines some quasi-experimental methods, and highlights threats to their validity. It then illustrates the quasi-experimental method by assessing the validity of a quasi-experiment that aims to estimate the impact of the Endangered Species Act on property markets in North Carolina. The paper's larger argument is that greater application of experimental and quasi-experimental techniques can identify efficient policies that increase social welfare.
How many households are evicted from their homes each year in Brussels? What is known about the profile of evicted tenants and landlords who have called for an eviction? Are some parts of the city ...more affected than others? Although they constitute an extreme case of deprivation of the right to housing, evictions from housing in Brussels are still very poorly documented. This article aims to address this lack of knowledge by providing a comprehensive snapshot of judicial evictions over one year (2018) for the entire Brussels Region. The results highlight the importance of questioning the lack of institutional data on housing evictions in a city where housing production and allocation is largely dominated by market mechanisms.
In this paper, we begin by documenting substantial variation in house price growth across neighborhoods within a city during city-wide housing price booms. We then present a model which links house ...price movements across neighborhoods within a city and the gentrification of those neighborhoods in response to a city wide housing demand shock. A key ingredient in our model is a positive neighborhood externality: individuals like to live next to richer neighbors. This generates an equilibrium where households segregate based upon their income. In response to a city-wide demand shock, higher income residents will choose to expand their housing by migrating into the poorer neighborhoods that directly abut the initial richer neighborhoods. The in-migration of the richer residents into these border neighborhoods will bid up prices in those neighborhoods causing the original poorer residents to migrate out. We refer to this process as “endogenous gentrification”. Using a variety of data sets and using Bartik variation across cities to identify city level housing demand shocks, we find strong empirical support for the model's predictions.
► We document substantial variation in house price growth within a city. ► We develop a model that links house price growth and gentrification. ► A key ingredient in our model is individuals like to live next to richer neighbors. ► Richer neighborhoods expand at borders when positive city-wide demand shocks occur. ► We find strong empirical support for the model's predictions.
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