Urban Housing Demand
Urban housing demand is a reflection of households’ desire to live in cities. In this article, I discuss possible reasons why US households have exhibited an increasing taste for urban living, including employment, urban amenities, and consumption opportunities. Next, I explain how growing urban housing demand led to rising house prices and a sorting of households across cities by income. That dynamic generated a divergence across housing markets in the value of the tax subsidy to owner-occupied housing as well as housing market risk. Those factors, in turn, had a feedback effect on urban housing demand.
KeywordsHousing markets Housing supply Housing tax subsidies Internet, economics of Monocentric city models Population growth Preference externalities Productivity growth Superstar cities Urban housing demand Willingness-to-pay
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