The redistributional impact of modern rent control

Since the early 1970s over 200 cities in the United States of America have enacted rent control. Currently 10% of the nation's renters are covered by some form of rent regulation, yet little is known about the economic consequences of rent control. Most evidence suggests that modern rent controls have little or no impact on the amount of investment in rental housing. Such a finding is primarily because of the nonrestrictive nature of most current rent control ordinances, which typically exempt newly constructed housing, guarantee a fair and reasonable return on investment, and allow for annual rent adjustments to cover increases in operating costs. Although this relatively mild type of rent control succeeds in limiting extreme rent increases, it does not result in significant relief from high rents in most regulated cities. Only with strong rent control ordinances will rents be significantly impacted.

Back to Black … and Green? Location and Policy Interventions in Contemporary Neighborhood Housing Markets

The postwar flight from U.S. central cities led to widespread decay and devaluation in downtown housing markets. In a reversal of fortunes, distant housing prices soared while the dense urban core lagged. However, over the course of the 2000–06 housing bubble, we find that the markets in often ignored mid-sized cities shifted back to the downtowns. This research examines the factors influencing neighborhood housing values, including location and public policy interventions. Our analysis period begins with 2000 and has two end points: one at the close of the national housing bubble in 2006 and another in 2008 during the housing market collapse. Based on OLS and spatial regression analyses of percent increases in neighborhood housing values for Louisville, Kentucky, we find that higher downtown property increases are due in large part to historic preservation districts, a university–community partnership, and a HOPE VI site. We confirm that our findings hold even through the 2007–2008 housing crisis. We ultimately theorize that higher downtown appreciation is due to three factors: green urbanism, planning/policy successes, and the surprising non-significance of the traditionally negative predictor race (nonwhite percentage)

Historic Preservation’s Impact on Job Creation, Property Values, and Environmental Sustainability

This study examines the impacts of historic preservation on jobs, property values, and environmentalism in Kentucky and its largest city, Louisville. Kentucky is a national leader in preservation, ranking first in the White House’s Preserve America initiative with 73 recognized communities. Kentucky is an ideal place to study historic preservation and environmentalism. Tax incentive programs have been an effective tool for creating positive changes in historic areas. Historic preservation results in more job creation than most other public investments. In the presence of escalating gas prices and assorted environmental practices, it is shown how neighborhoods containing historic districts have higher increases in median neighborhood housing values than undesignated neighborhoods. This paper also demonstrates the link between environmentalism and historic preservation. Residents of historic urban neighborhoods exhibit more environmentally friendly behavior

Without Bias? Government Policy That Creates Fair and Equitable Property Tax Assessments

Ensuring accurate, unbiased residential property tax assessments is an important, and contentious, issue facing communities today, particularly in this era of fiscal and economic crisis. Furthermore, this question is critical because it involves important social justice issues. Past studies have shown inequities by race, class, and location with some neighborhoods paying more of their fair share in property taxes. This study looks at the reliability of tax-assessment data in a medium-sized American city—Louisville, Kentucky. In an effort to compare various housing data sources, this study contrasts three measures of neighborhood median housing value for 170 census tracts in Louisville in the year 2000: self-reported values (U.S. Census); sales prices (MLS); and tax assessments from the county’s property valuation administrator. We find that the effects of various neighborhood characteristics on the three property measures do not vary by measure. Furthermore, an assessments-to-sale ratio does not vary by traditional indicators of neighborhood distress including racial composition and proximity to the inner city. We conclude that assessments in Louisville are not biased by neighborhood and argue that several aspects of policy and administration present in Louisville make for more accountable and fair assessment practices—including tough state statutes, the election of the chief assessor, the use of aerial technology to view improvements, public transparency, the use of sales prices in reassessing properties, and the willingness to reassess downward communities hit hardest by the foreclosure crisis

Contemporary Neighborhood Housing Dynamics in a Mid-Sized U.S. City: The Policy Consequences of Mismeasuring the Dependent Variable

This paper analyzes median assessed residential property values using three different operationalizations of a tract-level dependent variable for a mid-sized US city: Louisville, Kentucky. We estimated the impacts of accessibility, sociodemographics, and housing characteristics as well as three policy interventions (HOPE VI, historic preservation districts, and university-community partnerships) on median assessed values and changes to them over the 2000–06 housing bubble. Our interpretation of models employing the three different operationalizations leads to different conclusions about neighborhood health and the efficacy of policy programs. Conventional operationalizations employed by advocates, such as looking at medians or raw dollar changes in median values, are likely to find that policy interventions have less of an impact compared to measuring recent percent changes in property values. Thus, we provide a methodological contribution that shows that percent changes should accompany traditional analysis in capturing the effects of contemporary policy interventions. Mismeasuring neighborhood housing markets has played a role in prematurely concluding that targeted policy programs in neighborhoods are ineffective. Based on our analysis, we invite academics and policymakers to rethink contemporary neighborhood housing dynamics

Forty years of Rent Control: Reexamining New Jersey\u27s Moderate Local Policies after the Great Recession

This study replicates, using 2010 Census data, and extends past work on moderately rent-controlled municipalities in New Jersey, which began policies to stabilize rents while allowing landlords modest returns in the 1970s. Our approach compares controlled and non-controlled communities over 10,000 persons; and regresses rental housing characteristics (rent and quality/quantity) on two measures of rent control: nominal (1/0) and ordinal (an index of policy diversity/strength). Because the decade 2000–2010 was unique due to the housing bubble and recession, we expand previous analyses by introducing two additional dependent variables: changes in property values, which may be affected by restrictions on rents; and foreclosure rates, a problem affecting investors and a proxy for abandonment. We find that these 40-year-old policies do not exert any statistically significant effects on their communities’ housing markets once other factors are controlled—a finding which has implications for affordable housing and advocacy in New Jersey and beyond

Investors: The Missing Piece in the Foreclosure Racial Gap Debate

Foreclosures have become one of the most important problems facing cities and the U.S. economy. However, not all communities are affected equally. Our goal is to better understand factors that affect variation in neighborhood foreclosures in a typical, mid-sized U.S. city — Louisville, Kentucky. While previous findings indicate that a key explanatory variable leading to rising neighborhood foreclosures is the proportion of racial minorities, our analysis finds that in a fully specified model, race does not predict differences between black and white homeowners. On the other hand, an analysis of investors predicts high foreclosure rates in African-American neighborhoods. The effect of percent nonwhite is caused by several key intervening variables, including the presence of investor foreclosures, the absence of neighborhood walkability, and the prevalence of high-cost loans. In the past, walkability and investor behavior have largely been ignored by social scientists studying neighborhood variation in foreclosures and the role of race in rising foreclosures. In this article, we examine how speculation by investors in majority African-American neighborhoods along with degree of walkability and the concentration of high-priced loans have contributed to recent increases in foreclosures and variation across neighborhoods. Together, the findings demonstrate that these three factors help to better explain the contemporary causes of greater foreclosures in African-American neighborhoods