Tiered housing allocation with pre-announced rankings: an experimental analysis *

Abstract We study in the laboratory a variant of the house allocation with existing tenants problem where subjects are partitioned into tiers with hierarchical privileges, and they know their position in the priority queue before making their decision. We evaluate the performance of the modified versions of three well-known mechanisms: Top Trading Cycle, Gale-Shapley and Random Serial Dictatorship with Squatting Rights. For all three mechanisms, we find low rates of participation (around 40%), high rates of truth-telling conditional on participation (around 90%), high proportions of fair allocations (above 90%) and significant efficiency losses. We also observe differences across mechanisms: Random Serial Dictatorship is ranked highest in efficiency and Top Trading Cycle is ranked lowest in fairness. We then show that position in the queue has a positive and significant impact on participation whereas tier has lit- * Address for correspondence: Juan D. Carrillo, Department of Economics, University of Southern California, Los Angeles, CA 90089, emails: <[email protected]> and <[email protected]>. We thank Ricardo Alonso, Manuel Castro, Arya Gaduh, Brijesh Pinto, Smriti Sharma and the audience at various seminars for helpful comments, and Chris Crabbe for developing the software. We also thank the LUSK center for Real Estate and the Microsoft Corporation for financial support. All remaining errors are our own. tle effect on behavior. Finally, the individual analysis reveals that the majority of subjects who do not play according to the theory still follow discernible patterns of participation and preference revelation

The L2H2 Auction: Efficiency and Equity in the Assemblage of Land for Public Use

The burden of redevelopment projects, whether or not they ultimately benefit the communities in which they are undertaken, is borne disproportionately by those displaced. Neighborhoods are destroyed and residents are made to leave a home they love, compensated only by its market value. The benefits and costs of redevelopment can only be estimated since there are no direct market tests. Here a mechanism, developed as an extension of two recent papers, by Lehavi and Lichts (L2) and by Heller and Hill (H2), provides a market-based efficiency test for a proposed project and a compensation rule that alleviates the disproportionate burden on displaced residents. Assembled property is sold at an auction. The reserve price (the lowest price at which the assembled property will be sold) is set so that all displaced residents receive at least their personal value of their property. A successful bid, one that claims the assembled property, is sufficient proof of efficiency.

Promoting Homeownership Among Low-Income Households

Argues that the current system of low-income housing assistance is strongly biased against homeownership. Examines the performance of past housing programs and implications for the future design of efficient low-income homeownership programs

Poor choices: the limits of competitive markets in the provision of essential services to low-income consumers

A major study of the problems faced by the poor in the market for seven essential services in the UK - energy, food, housing, water, telecoms, transport, and financial services. Together these represent 60% of spending by the poorest 30% of households

Partnerships in Affordable Housing: The Impact of Conflicting Investment Criteria

Accessibility to housing for lower income groups in Australia has been experiencing a severe decline in the last few years. On the supply side the public sector has been reducing its commitment to the direct provision of public housing at a time when market demand has strengthened, creating substantial price increases in all sectors of the housing market and in most urban centres. One possible solution to address the problem of reduced accessibility to affordable housing has been through the development of partnerships but recent investigation of the literature (Susilawati and Armitage, 2004a) and previous research by the author (Susilawati and Armitage, 2004b) suggest that the attractions of this approach may be specious. The research reported in this paper investigates the nature and incidence of these impediments as presented by survey of a number of stakeholders who have been involved in partnership arrangements in the Queensland affordable housing sector. By means of a series of in-depth interviews, the investment criteria and the impediments to achieving the desired outcomes of the participants in the partnerships are identified. Interestingly, the incidence of conflict and diversity between partners has elicited some unanticipated outcomes and responses which have ironically strengthened the process. Some of the negativity attached to future commitment to such partnerships has been found to be the anticipation of a worse outcome than that expected from independent action

Cost and benefits of rent control in Kumasi, Ghana

Over the past forty years, rent control has been a feature of housing in Ghana. This study focusses on the housing market in Kumasi, the second largest city in Ghana. The authors examine the characteristics of the rent control regime in force there, and assess the costs and benefits of rent control, on landlords and on tenants, and its effect on the housing stock. Rent control has been successful in ensuring that housing is very inexpensive for most households, in both absolute terms and in the proportion of income devoted to rent. Thesecontrols have deprived landlords of economic returns on their property, causing them to withdraw stock from renting to use for their own family members and to reduce maintenance. However, rent control is not the only constraint on the housing market, in Kumasi or in Ghana. The paper also describes other supply side and regulatory constraints; such as those affecting land, finance, and choice of building design and materials. A number of options for relaxation/decontrol are studied with the aid of a simple present value model. Along with decontrol of new construction it is recommended that floating up and out of controls over a five year period should be considered, along with policy changes to ensure ready supplies of land, finance, and building materials. Such policies are essential, given that private housing investment provides the great majority of rooms in Ghanaian urban areas.Non Bank Financial Institutions,Banks&Banking Reform,Housing Finance,Housing&Human Habitats,Economic Theory&Research

The Long-Lasting Legacy of Rent Controls: Perspectives on the Private Rental Market in Malta within the Context of a Dual Market

Up to a few years ago, the private rental market in Malta was a classic example of the dysfunction created by two diametrically opposed regimes – a rigidly-controlled one and a completely liberal one – co-existing side by side. Two recent reforms have sought to address this situation. The objective of this paper is to describe the state-of-play in the private rental market in Malta by providing a historical background to these recent developments. In addition to the distortions in the housing market that rent controls introduce, controls also contributed to the deterioration of the statistical infrastructure to collect data on this sector. From this perspective, the introduction of the 2020 rent reform for the post-1995 sector, in addition to providing a set of minimum standards to professionalize the market, also facilitated data collection efforts through the introduction of a rent register. This information provided an alternative source of information to complement the other data sources, which tend to be outdated, inadequate, or focus solely on specific segments of the market, thus allowing for a more detailed and complete view of the private rental market in Malta