Referred Articles
Real Estate Economics, Vol. 23.3, 1995, 271-310
A clustering algorithm is applied to effective rents for twenty-one U.S. office markets, and to twenty-two metropolitan markets using vacancy data. It provides support for the conjecture that there exists a few major families of cities: including an oil and gas group and an industrial Northeast group. Unlike other clustering studies, we find strong evidence of bicoastal city associations among cities such as Boston and Los Angeles. We present a bootstrapping methodology for investigating the robustness of the clustering algorithm, and develop a means for testing the significance of city associations. While the analysis is limited to aggregate rent and vacancy data, the results provide a guideline for the further application of cluster analysis to other types of real estate and economic information.
University of Pennsylvania Law Review, Vol.143.5, May 1995, 1285-1342
Housing Policy Debate, Vol 6.1, 1995 141-167
This article addresses the extent to which housing market constraints contribute to spatial stratification of the U.S. population by income and race. Differential patterns of residence based on income and race may result from local and federal regulatory policies or from housing market discrimination by private and public actors. Income homogeneity within communities results directly from local control over taxes, public services, and land use. The empirical literature shows that local regulations have effects on housing prices that tend to exclude low‐ and moderate‐income households. These regulations are also likely to promote racial segregation because of the correlation between income and race, although the magnitude of this effect is unclear. Discrimination by government and private actors directly generates spatial segmentation based on race and ethnicity. While federal policy could alleviate these patterns, current and past federal policy initiatives have themselves increased stratification based on income and race.
Journal of Real Estate Finance and Economics, Vol. 9.3, December 1994, 223-239
Disparities in mortgage lending patterns between minority and nonminority neighborhoods have refocused attention on the Community Reinvestment Act (CRA), a statute designed to encourage lending by financial institutions to nearby lower income neighborhoods. Geographic disparities may derive from discrimination, neighborhood and borrower attributes, as well as regulation itself. This article examines possible spatial impacts of the CRA. Tests for differential lender screening across regulated and nonregulated institutions in five metropolitan areas provide no consistent findings of regulatory effects. The article also tests whether lower income and minority applicants are more likely to be accepted when they apply for loans in lower income and minority neighborhoods. Using data for Boston, evidence is found for concentration effects that may result from institutional factors, information economies, or regulation.
Journal of Housing Economics, Vol 3.Issue 3, 1994, 186-206
In this paper, we use clustering techniques to identify structural relationships among U.S. housing markets and develop a bootstrapping procedure to test whether associations between cities are significant. The method allows the creation of meaningful “groups” of cities. These groups are useful for purposes of diversification, and for identifying appropriate hedging proxies for city-specific futures instruments. A clustering algorithm, K-means, is applied to the 1977-1992 returns to housing price indices in 30 metropolitan U.S. housing markets. It demonstrates strong regional differences in housing price fluctuations. When three groups are specified, we find a West Coast group, an East Coast group, and a central U.S. group. When more groups are specified, the West Coast divides into two clusters that are not north and south, and Texas cities separate from the central U.S. group. Using bootstrap methods, we reject the hypothesis that these groupings are a result of random associations.
Journal of Housing Research Vol 4.2, 1993, 245-276
Recent data released pursuant to the 1989 amendments to the Home Mortgage Disclosure Act (HMDA) which show large disparities in mortgage lending between minority and non-minority neighborhoods, have refocused the attention of policy makers, lenders, community advocates and academics on possible racial discrimination in the home loan market. In this paper, we review the existing literature on redlining. Many of the methodological shortcomings of the previous studies can be remedied by using post-1989 HMDA data to examine whether lender acceptance or rejection of mortgage applications is related to racial and ethnic neighborhood composition. We test two models of the lender’s decision to accept or reject loan applicants, one including and one without variables that proxy for neighborhood risk using data for Boston and Philadelphia. With proxies for neighborhood risk included, the results do not support the hypothesis that financial institutions redline neighborhoods in these two cities.
Real Estate Economics, Vol 20, Issue 2, June 1992, 302-324
Recent contributions to the literature have resulted in a standard modelling of office markets. The models provide considerable insight into the working of office markets. • Nonetheless, a major difficulty is the use of data for a single city or aggregate data for the U.S. The latter implicitly assumes that model structure is invariant across cities. In this article we test for structural differences in office markets by size class. Rental data from REIS Reports for twenty-one metropolitan areas for the time period 1981 to 1990 are used to model office market behavior. Results suggest market outcomes vary by city size, larger markets are better modelled using standard procedures, and Manhattan behaves quite differently from the other markets.
Housing Policy Debate. Vol 3.2, 1992, 333-370
There are persistent differences in homeownership rates across racial and ethnic groups. Homeownership rates for whites are over 20 percentage points higher than for blacks or Hispanics. This paper uses a model of the housing tenure decision to gain a better understanding of these racial and ethnic differentials in homeownership and employs a decomposition technique that has been applied to labor market discrimination to report the results of the empirical testing of two hypotheses: (1) race (ethnicity) influences the probability of ownership through differences in household endowments (income, education, age, gender, and family type) and market endowments (price and location); and (2) race (ethnicity) directly influences the probability of ownership through racial or ethnic discrimination and other factors that may be correlated with race or ethnicity. We find endowment effects important in explaining the persistent racial and ethnic disparities in homeownership. In brief, logit analysis of 1989 American Housing Survey (AHS) national sample data reveals that 81 percent (78 percent) of the differences between the predicted probability of ownership between black and white households (Hispanic/non‐Hispanic) are due to differences in group endowments. Direct effects explain 19 percent of the black‐white differentials and 22 percent of the Hispanic/non‐Hispanic differentials. Because the direct effects are modeled as residual differences, it must be realized that the residual components could also be capturing the influence of important omitted or harder to measure variables internal to the market process and correlated with race or ethnicity. These include wealth, household location, employment history, credit history, and cultural predisposition toward homeownership.
On Choosing Among House Price Index Methodologies (with Bradford Case, Henry O. Pollakowski) Abstract
This paper compares housing price indices estimated using three models with several sets of property transaction data. The commonly used hedonic price model suffers from potential specification bias and inefficiency, while the weighted repeat-sales model presents potentially more serious bias and inefficiency problems. A hybrid model combining hedonic and repeat-sales equations avoids most of these sources of bias and inefficiency. This paper evaluates the performance of each type of model using a particularly rich local housing market database. The results, though ambiguous, appear to confirm the problems with the repeat sales model but suggest that systematic differences between repeat-transacting and single-transacting properties lead to bias in the hedonic and hybrid models as well.
Journal of Urban and Contemporary Law, Vol. 40, Summer/Fall 1991, 49-64
Journal of Housing Research, Vol 1.1, December 1990, 163-185
Land Economics. Vol 66.3, August 1990, 315-324
This paper estimates the direct and spillover effects of zoning controls along with other growth restrictions on housing prices. Theory leads us to expect a positive effect of land-use restrictions on the price of developed land and a negative effect on the price of undeveloped land. We consider the effects on housing prices, and hence the effects on developed land. Other studies have examined the impact of separate components of land-use controls within a locality. We show that specific growth controls must be examined in the overall context of local land-use policy, and that interjurisdictional as well as intrajurisdictionael effects must be considered.