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Journal article
Local economic conditions and the nature of new housing supply
Christian A. L. Hilber, Jan Rouwendal and Wouter Vermeulen
May 2021
Paper No' :

Tags: local economic conditions; open monocentric city model; land conversion; housing supply; housing type; housing consumption; land use regulation; migration

We explore the effects of local economic conditions on the type and size of newly constructed housing units in a city. Exploiting the 1984–2004 metro area samples of the American Housing Survey and US Census building permit data from 1980 to 2018, we find that positive local income shocks (i) increase a city’s share of multi-family housing in new construction and (ii) trigger the construction of smaller units. These responses are driven by migration. Our findings are consistent with a modified open monocentric city model that more realistically assumes land is available for conversion into new housing throughout the city.