Real Estate & Planning Research Seminar by Professor Christian Hilber (LSE) Title "Structural Density and Homeownership"

If you are interested in attending this Seminar please contact our Department School Office at repschooloffice@reading.ac.uk

Abstract: One of the most salient stylized facts about homeownership is that multifamily units typically located in more central parts of cities – are much less likely to be owner-occupied than single-family units. This fact is consistent with landlord production efficiency advantages associated with structural density. To derive testable predictions and guide our empirical analysis, we first develop a simple modified monocentric city model that features landlord production efficiency advantages and spatial variation in structural density arising from centrality and soil conditions. To identify the causal effect of structural density and to disentangle it from other determinants of homeownership, we employ a novel instrumental variable strategy derived from the engineering literature, exploiting differences in soil quality. Our instrumental variable panel fixed effects estimates at the English ward-level suggest that a ten percentage points increase in the local share of multifamily housing causes the local homeownership rate to decrease by around nine percentage points. We confirm our findings using an alternative empirical strategy and employing a large panel of households across all of Europe. The effects implied by our causal IV-estimates are consistent with observed spatial differences in homeownership, both across England (in-sample) and Europe (out-of-sample).

Bio: Christian Hilber is Professor of Economic Geography at the London School of Economics. Before that, he was an Economist at Fannie Mae (2002-3) and a Research Fellow at the Wharton School, University of Pennsylvania (1999-2002). He is an urban economist with research focusing on issues relating to housing supply, land use regulation, homeownership, real estate price dynamics, public finance, and inequality. He is currently the Deputy Head of the Department of Geography and Environment at the LSE responsible for teaching/education related matters and an Associate of the Centre for Economic Performance. He has given evidence to Select Committees of the H.M. Treasury and the House of Lords. He has advised the Prime Minister’s Implementation Unit, the National Audit Office, and the National Housing and Planning Advisory Unit, amongst others. He has acted as a consultant to several international organizations including the OECD and the Asian Development Bank. He served as a Member of the Board of Directors of the American Real Estate and Urban Economics Association between 2015 and 2017. He is currently an expert member of the Advisory Group to the Geospatial Commission, UK National Land Data Programme. He is an Associate Editor of Regional Science and Urban Economics and of Journal of Regional Science, a member of the Editorial Boards of Journal of Housing Economics and Real Estate Economics, and a member of the Editorial Advisory Board of Public Finance Review. He is a Fellow of the Weimer School. He won numerous prizes for his teaching and research including the LSE Teaching Prize (2016), various best paper and annual referee prizes, and the University of Basel PhD Prize (1999). His policy-relevant work has been used as evidence by UK Select Committees and in Hearings before the U.S. Senate Committee of Finance and the U.S. Senate Budget Committee. His work is frequently cited in outlets such as the Economist or the Financial Times. He has widely published in journals such as Review of Economics and Statistics, Economic Journal, Journal of Public Economics, Journal of Urban Economics and Journal of Economic Geography.