Who wins and who loses from rent control?

Short/simple answer: everyone loses in the long run.

Last year, I shared here a NBER Working Paper by Rebecca Diamond (Stanford) and colleagues on the effects of rent control on tenants, landlords, and inequality. This issue always makes a comeback and since the paper has has now been published on AER, I thought it would be good to post about this study again. Thanks Max Roser and Carlos Goes for the pointers

Diamond, Rebecca, Tim McQuade, and Franklin Qian. 2019. The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco. American Economic Review, 109 (9): 3365-94. [ungated version of the paper]

Abstract

Using a 1994 law change, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study its impacts on tenants and landlords. Leveraging new data tracking individuals' migration, we find rent control limits renters' mobility by 20 percent and lowers displacement from San Francisco. Landlords treated by rent control reduce rental housing supplies by 15 percent by selling to owner-occupants and redeveloping buildings. Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law.

The urban landscape of Hong Kong

Johnny Harris (Vox) has filmed a great series of short-videos that helps us understand the urban landscape of Hong Kong. In one of these videos, Johnny talks about how one of the most unaffordable housing markets in the world is driven by government's land-use regulations. The videos also cover the decline of Hong Kong's neon nightscape and even how feng shui shapes the city skyline. There is also a very informative one about the changing relationship between Hong Kong and China. You can check the list of videos below.

Mass housing aerial photography in Mexico

“High Density”, a photo essay by Jorge Taboada addressing the proliferation of large and segregated complexes of social housing in Mexico. Hat tip Yuri Gama

More photos here.

How much residential space could you rent with $1,500 in 30 global cities?

I saw this chart on Twitter via Simon Kuestenmacher.

You will find more statistics at Statista

Related posts:

1. Comparing house price trends worldwide
2. The effects of rent control on tenants, landlords, and inequality
3. Aggregate homeownership rates for different countries
4. Map of real estate prices in Sao Paulo
5. Empty spaces in the crowd: Residential vacancy in São Paulo

UPDATE [6 Feb 2018] Apparently, the data is for 2016. The source of the date is a real state intelligence company called Yardi Matrix. They have another version of the chart that includes the 100 most populous cities in the US.

How much residential space could you rent with $1,500 in the 100 most populous US cities?

The effects of rent control on tenants, landlords, and inequality

Good read on the effects of rent control. There are many interesting results and Damon Jones presents a very good summary and discussion in this thread.

Diamond, R., McQuade, T., & Qian, F. (2018). The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco. NBER Working Paper No. 24181

Abstract:

We exploit quasi-experimental variation in assignment of rent control to study its impacts on tenants, landlords, and the overall rental market. Leveraging new data tracking individuals’ migration, we find rent control increased renters’ probabilities of staying at their addresses by nearly 20%. Landlords treated by rent control reduced rental housing supply by 15%, causing a 5.1% city-wide rent increase. Using a dynamic, neighborhood choice model, we find rent control offered large benefits to covered tenants. Welfare losses from decreased housing supply could be mitigated if insurance against rent increases were provided as government social insurance, instead of a regulated landlord mandate.

Assorted Links

1. A rank of North American Urban Planning Scholars Using Google Scholar Citation Profiles, by Tom Sanchez (twitter)
   
   
2. On a similar note, an interesting commentary on the power of the unrelenting impact factor of academic journals and some interesting arguments to why the impact factor of journals should not be used for evaluating research
   
   
3. Isoscope:  nice work by Flavio Gortana (twitter), showing how isochrones by car vary across space and time
   
   
4. How One Brilliant Woman Mapped the Ocean Floor’s Secrets via Sabrina Lai
   
   
5. Possibly the greatest scene in documentary history via David Levinson (twitter)
   
   
6. Bill Rankin's new work on Mapping Slavery Against US Incarceration
   
   
7. A 15-min video giving an interesting summary of the largest US health insurance experiment in history - ht Carl Schmertmann
   
   
8. Beautiful data visualization of music, by Nicholas Rougeux
   
   
9. The Vertical City: The Price of Land and the Height of Buildings in Chicago 1870-2010, by Gabriel M. Ahlfeldt (twitter)

Comparing house price trends worldwide

Leonard Kiefer has a new post where he presents some interesting analysis of global house price trends. Lonards has used data from the international house price database, organized by the Dallas Federal Reserve Bank.

The analysis is written in R and the code is available at the bottom of his post. Thanks Leonard!

ps. don't forget to check the related links at the bottom of this post.

credit: Leonard Kiefer

Related Links:

• Aggregate homeownership rates for different countries
• Commuting times and housing costs in eight major cities
• 3D dataviz of house prices in England and Wales
• The importance of titling and property rights

Empty spaces in the crowd: Residential vacancy in São Paulo

Nadalin, V., & Igliori, D. (2016). Empty spaces in the crowd. Residential vacancy in São Paulo’s city centre. Urban Studies, DOI: 10.1177/0042098016666498.

Abstract

In the past decades, when São Paulo became the national manufacturing centre, it has experienced great population growth. Since then, many housing problems have emerged. In addition, the difficulties that inner cities face in attracting jobs and maintaining economic activities are particularly challenging. Indeed, even if many cities have successfully regenerated their central areas, the so-called inner city problem is still very much alive in the case of São Paulo. As a result although the city centre has abundant urban infrastructure it still has plenty of vacant spaces, including residential buildings. One could say that São Paulo’s city centre is characterised by a large number of empty spaces in an area that is simultaneously crowded with buildings and urban facilities. This paper intends to contribute to the empirical analysis of the determinants of vacancy rates, with a particular focus on historical city centres, using São Paulo Metropolitan Area as our case study. Our empirical analysis relies on district-level data for the years 2000 and 2010, and combines standard spatial econometric methods with hedonic modelling. Our results suggest that there are three main groups of determinants: individual buildings characteristics, mobility of households and neighbourhood quality. We find evidence that the historic central city is a distinctive submarket, needing special urban policies. Its determinants work differently when compared with the housing markets of other areas across the city.

credit: Nadalin & Igliori, 2016

Aggregate homeownership rates for different countries

Quartz has an interesting piece on why most Germans prefer renting instead of buying their homes. (via Simon Kuestenmache). The data in this chart is a bit outdated but homeownership rate was still relatively low in Germany in 2013, at 43%. In Brazil, this rate was 75% in the year 2011.

Assorted Links

1. The gap in life expectancy between the rich and the poor in the US is expanding
   
   
2. Using maths and maps to figure out the identity of the world's most famous anonymous artist. Here is the paper
   
   
3. Refugee camps from above, and here
   
   
4. Using a 3D projection of the globe in QGIS
   
   
5. Now you can rent Van Gogh’s Famous Bedroom on Airbnb in Chicago
   
   
6. New SEDAC Hazards Mapper lets users estimate population in proximity to hazards, and assess exposure
   
   
7. Mesmerizing ceilings of Mosques
   
   
8. Nice chart showing how deadly is Ebola compared to other infectious diseases
   
   
9. The average cost of a house at every London Underground stop

click on the image to enlarge it

Commuting times and housing costs in eight major cities

Alan Smith has put together a nice series of charts comparing commuting times and housing costs compared in eight major cities for a piece in the FT. Good read. I thank Jakob Engel for the pointer.

Related Links:

• Average Commute Time Worldwide
• The Evolution of Commute Times in Brazilian Metropolitan Areas (1992-2013)
• Commuter Density in Four World Cities

Map of real estate prices in Sao Paulo

Great interactive map with real estate prices in Sao Paulo, Brazil. The data used in the map is available here and covers 200 thousand properties announced for sale in a real state agency website (Properati).

credit: Properati

Assorted links

1. 4 instant cities that are still empty
   
   
2. Hans Rosling delivers his Ignorance on international development
   
   
3. How urban highways have changed cities' landscapes in the US (ht Oxford Urban)
   
   
4. India has spent $74 million to put a satellite into Mars orbit. If you consider the cost per kilometer travelled, it is cheaper than an auto ride in Delhi (via Tyler Cowen)
   
   
5. 10 things statistics taught us about big data analysis
   
   
6. What happens when governments try to help poor people move to better neighborhoods?
   
   
   
7. Seven ways to make your Google Scholar Profile better
   
   
8. The rise of Blue. Using R to visualize the change in colors of paintings over the last 200 years (via Nicholas Christakis)

[image credit: Martin Bellander]

Which cities have least affordable housing?

A new report by McKinsey Global Inst. compares housing affordability across 100 cities. HT/ the Daily Charts team at The Economist, who came up with a nice interactive chart.

[image credit: The Economist]

Assorted links

1. PhD Scholarships for students in Latin America, by the Lincoln Institute of Land Policy
   
   
2. 100 historic photographs of Brazil
   
   
3. Watch Water Boil And Freeze At The Same Time Read (via Mariana Rossi)
   
   
4. What happens when governments try to help poor people move to better neighborhoods? 
   
   
5. A 3200 year old tree, possibly the biggest tree on Earth
   
   
6. African Bus Routes Redrawn Using Cell-Phone Data
   
   
7. A short video dedicated to my friends with obsessive compulsive disorder
   
   
8. The first-ever asteroid with rings has recently been discovered. A nice video and the paper.
   
   
9. 40 years of Chicago's rising inequality, in one GIF via Demografía_CSIC

[image credit: Daniel Hertz via The Atlantic Cities]

Average house size by country

A nice graphic illustrating how big the average new home is around the world, by Mona Chalabi.

[click on the image to enlarge it]

[image credit: Mona Chalabi]

In square-feet here.


Related Links:

• The Latin American Cohabitation Boom, 1970–2007
• Supply constraints and housing market dynamics
• America’s housing market is in recovery, but home-ownership rates, at 65.1%, are at their lowest since the last quarter of 1995
• 9th Annual Demographia International Housing Affordability Survey: 2013

Assorted Links

1. The world's tallest slum (via Pedro Souza)
2. Observing the Earth with Incredible Satellite Photos
3. Tweet City: Building Heights by Number of Tweet
4. Things I'd rather be doing
5. The Gap Between Schooling and Education
6. Is Regional Policy a Waste of Time? (via Leo Monasterio)
7. Driverless vehicles are not going to solve congestion problems
8. A scary time-lapse map of the 2053 nuclear explosions which have taken place between 1945 and 1998
9. How much of your salary would you need to spend to rent a room in London?

[Image Credit: FT]

The Causes of Informal Housing - EPAINOS 2013 Prize Winner

Every year, the European Regional Science Association (ERSA) gives the EPAINOS award to a young scientist, under 33 years old. It makes me very glad to know that this years’ winner is Daniel da Mata!  Daniel has just finished his PhD in economics at Cambridge University and he is a brilliant researcher we have here at Ipea (Institute for Applied Economic Research).

Here is his awarded paper: "Disentangling the Causes of Informal Housing"

Abstract:

"This article aims to measure the main determinants of the expansion of informal settlements. The focus is on how urban poverty, rural-urban migration and land use regulations impact the growth of slums. I construct a structural model to explain the determinants of informal housing. The model supports the main empirical evidence regarding slums formation and it is able to quantitatively assess the role of each determinant of slums growth. The model is calibrated and estimated to be consistent with several statistics related to the Brazilian urbanization process from 1980 to 2010. I present several counterfactual experiments to assess the role of income, migration and land use regulation. The results show that these factors explain about half of the variation in slums growth between 1980 and 2010. I also perform ex-ante evaluation of the impacts of slum upgrading interventions and show how policies may have unintended adverse effects on slums formation."

By the way: Guilherme Resende was awarded the EPAINOS prize in 2009. Guilherme is another great researcher at Ipea.

Transforming Cities

A special issue on Transforming Cities by The Economist Magazine (via urban planning blog).

Transforming Cities: Special edition of The Economist magazine from The Economist Group

The importance of titling and property rights

A 10-minute video from MRUniversity course on development economics covering the theory and empirical research on the importance of titling and property rights (via Alex Tabarrok).

Related Links:

• Course - The American Housing Finance System
• de Soto's Book - The Mystery of Capital
• Paper - Entitled to Work: Urban Property Rights and Labor Supply in Peru (ungated)
• Paper - Property rights for the poor: Effects of land titling