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.
CITATION STYLE
Hilber, C. A. L., Rouwendal, J., & Vermeulen, W. (2021, May 1). Local economic conditions and the nature of new housing supply. Journal of Economic Geography. Oxford University Press. https://doi.org/10.1093/jeg/lbaa015
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