Urban Decline and Durable Housing

By Edward L. Glaeser, Joseph Gyourko. Journal of Political Economy, 2005

174 citations recorded by the source corpus.

Urban decline is not the mirror image of growth, and durable housing is the primary reason the nature of decline is so different. This paper presents a model of urban decline with durable housing and verifies these implications of the model: (1) city growth rates are skewed so that cities grow more quickly than they decline; (2) urban decline is highly persistent; (3) positive shocks increase population more than they increase housing prices; (4) negative shocks decrease housing prices more than they decrease population; (5) if housing prices are below construction costs, then the city declines; and (6) the combination of cheap housing and weak labor demand attracts individuals with low levels of human capital to declining cities.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/12ca57e7098356caf7a1457788827a09e84fd005

Citations in the corpus

• Why Has House Price Dispersion Gone Up (2010, unknown): “Several authors have argued that housing supply regulation is an important determinant of house prices (Glaeser and Gyourko, 2003, 2005; Glaeser, Gyourko, and Saks, 2005, 2007; Quigley and Rosenthal, 2005; Quigley and Raphael, 2005).”
• Urban Growth and Transportation (2012, unknown): “This asymmetry in the adjustment process is consistent with the empirical evidence uncovered by Glaeser and Gyourko (2005).”
• Are Private Markets and Filtering a Viable Source of Low-Income Housing? Estimates from a "Repeat Income" Model (2014, unknown): “Shrinking areas like Cleveland and the rust belt, for example, have experienced sharply falling real house prices (e.g. Glaeser and Gyourko (2005)) and have even”
• How Legislators Respond to Localized Economic Shocks: Evidence from Chinese Import Competition (2015, unknown): “However, the regional economics literature finds consensus that migration in response to labor demand shocks is both slow and incomplete (see, e.g., Blanchard and Katz 1992; Glaeser and Gyourko 2005).”
• Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States (2009, unknown): “…and “finger dexterity,” measuring an occupation’s use of routine motor tasks; the abstract task measure is the average of two DOT variables: “direction control and plan- 20 form an index of routine task-intensity, RTI: RTIk = ln ( R̂k,1980/M̂k,1980 ) , (3.1) where R̂ and M̂ are, respectively,…”
• Who Benefits from State Corporate Tax Cuts? A Local Labor Markets Approach with Heterogeneous Firms (2016, unknown): “42Notowidigdo (2013) discusses the incidence implications of non-linear housing supply functions as in Glaeser and Gyourko (2005).”
• Gentrification and Neighborhood Housing Cycles: Will America's Future Downtowns Be Rich? (2009, unknown): “See Glaeser and Gyourko (2005) for a discussion of how falling housing demand in declining cities can preclude redevelopment.”
• The Impact of Supply Constraints on House Prices in England (2016, unknown): “Since the existing housing stock is durable, when local demand is falling, the relevant part of the supply curve is almost perfectly inelastic, irrespective of the presence of any man-made or physical supply constraints – the supply curve is ‘kinked’ (Glaeser and Gyourko, 2005).”
• The effect of natural disasters on economic activity in US counties: A century of data (2020, unknown): “In an economy with durable local housing, this out-migration would depress local home prices in the medium run until the existing housing stock has a chance to depreciate (Glaeser and Gyourko 2005).”
• Cities, Skills and Regional Change (2014, unknown): “Fact # 10: Firm size is strongly correlated with employment and income growth after 1980 Glaeser et al. (1992) found a strong negative correlation between average …rm size and subsequent growth across large industrial groups within metropolitan areas.”