The 2015 European Refugee Crisis and Residential Housing Rents in Germany

Abstract

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"Not in My Backyard!" the 2015 Refugee Crisis in Germany

“…In further analyses, we exploit for identification exclusively variation in exposure to RRCs that is arguably exogenous to (prospective) local residents' preferences by considering only property located in counties adjacent to counties that housed RRCs, which eliminates the possibility that local lobbyists' in treatment, respectively control regions, exerted an influence on the decision of county-level officiating bodies where exactly to place new RRCs within administrative county regions. These explorations corroborate our finding of a negative effect on house price growth in vicinity of RRCs, which adds to and complements related findings on refugee centers in the Netherlands (Daams et al, 2019;Dröes and Koster, 2019), refugee shelter opening announcements in the city of Gothenburg in Sweden in the wake of the 2015 European Refugee Crisis (van Vuuren et al, 2019), and associated findings of a negative impact of the scale of refugee immigration in late 2015 on rental price growth for residential housing (at county level) in Germany (Kürschner Rauck and Kvasnicka, 2018). These findings may all be a reflection of NIMBYism related to regional differences in natives' perceptions of potential adverse externalities associated with large scale refugee settlements, particularly if they are concentrated, and they bear implications for the design of public policies in handling future receptions of refugees, i.e.…”

“…Research on the recent mass inflow of Syrian refugees to Turkey also found positive price effects, particularly for rental property in the upper price segment and property located in native-dominated residential areas, which may be attributable to an increase in natives' demand for residential segregation with respect to ethnicity (Tumen, 2016;Balkan et al, 2018). Studies that have found negative price effects of forced migration for residential property explored the link between (general) refugee migration over the years 2004 to 2015 and UK house prices (Lastrapes and Lebesmuehlbacher, 2018), price penalties suffered by Dutch property in vicinity to asylum seeker reception centers over the years 2009 to 2017 (Daams et al, 2019) as well as 1990 to 2015 (Dröes and Koster, 2019), and refugee migration fuelled by the Syrian refugee crisis and perceived housing quality and predicted rents in Jordan (Alhawarin et al, 2018) or apartment prices (van Vuuren et al, 2019) and housing rents (Kürschner Rauck and Kvasnicka, 2018) in major European refugee recipient countries.…”

“…However, little is yet known on the actual scale of any price penalties for residential property (houses on offer for sale) caused by the potential shock to real estate markets from the 2015 inflow of refugees to Germany. Kürschner Rauck and Kvasnicka (2018) find that the mass exodus of refugees to Germany in 2015 adversely affected rental price growth of residential apartments (at county level) in major destination regions. Price growth penalties, however, turned out partly attenuated if a larger share of refugees was housed in decentralized as opposed to centralized accommodations in the heyday of the crisis.…”

“…The authors also provide evidence which suggests that local residents have perceived large scale refugee settlements in vicinity of their property (at municipality level) as a disamenity, in particular when such settlements took the form of large scale group quarter accommodations, such as RRCs. The study by Kürschner Rauck and Kvasnicka (2018), however, is confined in focus to a segment of the property market (apartments for rent) that may have been faced also with demand-side driven price increases, caused by the rapid acquisition of additional property by authorities that needed to house the arrivals. Such increases in demand may have counteracted price penalties caused by disamenity perceptions of refugee settlements.…”

The impact of co-national networks on asylum seekers’ employment: Quasi-experimental evidence from Germany

“…Our identification strategy relies on the substantial idiosyncratic variation in the assignment of asylum seekers to German counties that is accompanied by a so-called 'domicile obligation', which requires asylum welfare benefit recipients to stay in their assigned county. The same dispersal policy has also been exploited for investigating the effects of the spatial allocation of asylum seekers on regional outcomes in Germany [14][15][16]. In order to capture variation in local labor market conditions as well as national policy dynamics, we additionally rely on an extensive set of fixed effects, focusing on within-variation.…”