International Tax and Public Finance

, Volume 21, Issue 3, pp 375–396 | Cite as

Federal coordination of local housing demolition in the presence of filtering and migration



Vacant housing and even housing demolition have recently become an issue in a number of countries. Given this renewed interest in demolition, this paper contributes to the literature on (i) housing demolition and (ii) policy coordination. The paper extends Sweeney’s (Econometrica 42:147–167, 1974a) analysis of demolition and filtering, by letting households also choose their location. Then when demolishing part of its housing stock, a city effectively evicts some of its residents not just out of the housing quality it demolishes but out of every other of its qualities, too. The paper shows that demolition’s coordination strengthens local governments’ incentive to demolish part of their stock, by shutting down inter city migration within qualities.—A case study on Germany’s East illustrates the effects of coordinated, simultaneous every-city demolition.


Housing demolition Policy coordination Regional migration Filtering 

JEL Classification

H73 D61 R21 



I am very grateful for the comments I received from an anonymous referee, the editor (John Wilson), Lutz Arnold, Frank Barry, Alexander Haupt, Aron Kiss, Sven Knoth and Gabe Lee. I am also very grateful for stimulating discussion with participants of: the DFG workshop on “Fiscal Federalism and Tax Competition”, a seminar at the Halle Institute of Economic Research, the Regensburg workshop on Real Estate Economics and Finance, and seminar presentations at Paderborn University, Technical University Dresden, and at Helmut-Schmidt University Hamburg. Finally, access to Mikrozensus data at the Federal Statistical Office Berlin (FDZ) is gratefully acknowledged. Any remaining errors are mine.


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Department of ManagementTouro College BerlinBerlinGermany

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