Rethinking the Federal Bias Toward Homeownership

Do Urban Neighborhoods Benefit from Homeowners? Evidence from Housing Prices

“…First, the result could be the true causal effect, so that in multi‐storey buildings, the homeowners' net effect on the neighborhood amenity level and house prices is indeed negative (e.g., and ). One possible mechanism is outlined in Linneman (1986), Glaeser and Shapiro (), and Glaeser (). Multiple owners in a building create a common‐pool problem in investment decisions concerning building‐specific projects, and in neighborhoods with high homeownership rates, buildings could be in worse conditions.…”

“…Furthermore, residents in a multi‐unit building face a common‐pool problem because major maintenance problems are building‐specific, not unit‐specific (Linneman, ; Glaeser and Shapiro, ; Glaeser, ). The owners of individual units in a multi‐unit building have an incentive to free‐ride at the expense of other owners in the building when it comes to investments in common facilities and building maintenance.…”

“…Thus, if there are economies of scale, we should expect institutional landlords to own big buildings rather than many small ones for a given amount of investment in real estate. 16 Furthermore, residents in a multi-unit building face a common-pool problem because major maintenance problems are building-specific, not unitspecific (Linneman, 1985;Glaeser and Shapiro, 2003;Glaeser, 2011). The owners of individual units in a multi-unit building have an incentive to freeride at the expense of other owners in the building when it comes to investments in common facilities and building maintenance.…”

House prices, housing development costs, and the supply of new single-family housing in German counties and cities

“…11 Another reason for the low level of additional homebuilding rests in the stability-oriented German mortgage market. German housing loans are still characterized by comparatively low loan-to-value ratios, long-term fixed interest rates, and practically no secondary mortgages (Maennig, 2012 In stark contrast to other countries which treat homeownership more favorably (see, e.g., Glaeser (2011) for the US), the German tax code neither allows mortgage interest deduction nor the deduction of depreciation or running expenses.…”

Can Internet Ads Serve as an Indicator of Homeownership Rates?

“…In some countries, e.g., in the USA, it "is often seen as an integral part of the American dream, and encouraging homeownership has historically been an important feature of U.S. public policy", see Haughwout et al (2010). Glaeser (2011) points to federal policies such as home mortgage deductions as well as local regulations that prohibit tall buildings. The latter boosts the HOR because rental units are much more likely to be in multifamily structures than in single houses.…”