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Open Access Publications from the University of California


The Berkeley Program on Housing and Urban Policy was established in the fall of 1998 to promote academic excellence and national leadership in housing studies and the application of knowledge to urban policy. The Program involves academic and professional leaders to further its research and educational objectives. The Program supports economic research and teaching throughout the campus on urban development and policy. The Program arranges internships for professional students and encourages closer links between the university and the community of urban professionals.

Berkeley Program on Housing and Urban Policy

There are 99 publications in this collection, published between 1989 and 2010.
Seminar and Conference Papers (13)

Does a High Tech Boom Worsen Housing Problems for Working Families?

In this study, we present an analysis of the impacts of high tech economic growth on the incidence of critical housing problems among all households and among moderateincome working families in major metropolitan areas. We rely on data from the 1999 American Housing Survey, supplemented with data from the State of the Cities 2000, Landis and Elmer (2001), and Burby et al. (2000). Overall, we found that the level of high tech activity impacts, positively and significantly, the incidence of critical housing problems for all households and for moderate-income working households, regardless of tenure. Consistent with anecdotal information about the problems of working families, we found stronger impacts on moderate-income working households than on all households. We conclude that housing policy should be broadened to address the problems of working families as well as those of the poor, especially when dealing with problems arising from rapid economic growth.

Neutral Property Taxation

A major difficulty in implementing land/site value taxation is imputing the land value of builton sites. The literature has focussed on two alternatives. The first, residual site value, measures postdevelopment site value as property value less structure value, measured as depreciated construction costs. Residual site value would be relatively easy to estimate, but residual site value taxation is distortionary, discouraging density. The second, raw site value, measures post-development site value as "what the land would be worth were there no building on the site (though in fact there is)". Raw site value taxation is neutral (does not distort the timing and density of development), but the estimation of raw site value would be complex so that assessment would likely be less fair and more arbitrary, contentious, and prone to abuse. This paper asks the question: Is it not possible to design a property tax system (taxation of predevelopment land value, post-development structure value, and post-development site value at possibly different rates) that employs the administratively simpler residual definition of post-development site value and achieves neutrality? The paper provides an affirmative answer, characterizes the tax rates that achieve neutrality, and briefly discusses issues of practical implementation.

Modelling Housing Choice and Demand in a Social Housing System: The Case of Glasgow

This paper is concerned with the attempt to model and simulate an urban housing system dominated by non-market social housing, primarily to forecast demand for social housing under different scenarios. The urban system concerned is the city of Glasgow and its suburbs, a post-industrial city in West Central Scotland, a region now emerging from long-term structural economic decline. There is an established literature concerned with the development of metropolitan housing market models in both the USA and the UK. The present model draws from these traditions but is heavily influenced by the work of Meen (1999). The Glasgow model is heavily demand-determined with only a limited supply-side but with a standard market-clearing setup. Data for the model comes from the Scottish House Condition Survey 1996 and from extraneous housing, population and household estimates from local authority planners. The focus of the core part of the paper is primarily on the demand-side. Demand in the model is composed of three elements: new household formation, net migration and the tenure and locational choices of existing households. It is this third element that poses the most difficulties and is modelled separately using a nested multinomial logit formulation. The paper discusses the modelling issues and results from a series of NMNL models that attempt to explain the locational, tenure and mobility decisions of existing households. The preferred results are then adopted as conditional probabilities in the simulation model. The paper sets out the structure of the basic model and reports some initial runs. The paper concludes by examining the academic and policy implications of the model and suggests future avenues for refinement and further work.

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Working Papers (84)

Hedging Housing Risk

An unusually rich source of data on housing prices in Stockholm is used to analyze the investment implications of housing choices. This empirical analysis derives market-wide price and return series for housing investment during a 13-year period, and it also provides estimates of the individual-speci®c, idiosyncratic, variation in housing returns. Because the idiosyncratic component follows an autocorrelated process, the analysis of portfolio choice is dependent upon the holding period. We analyze the composition of household investment portfolios containing housing, common stocks, stocks in real estate holding companies, bonds, and t-bills. For short holding periods, the ef®cient portfolio contains essentially no housing. For longer periods, low-risk portfolios contain 15 to 50 percent housing. These results suggest that there are large potential gains from policies or institutions that would permit households to hedge their lumpy investments in housing. We estimate the potential value of hedges in reducing risk to households, yet yielding the same investment returns. The value is surprisingly large, especially to poorer homeowners.

Measuring Land-Use Regulations and Their Effects in the Housing Market

Land-use regulation is undertaken by units of local government and is notoriously hard to measure. This paper assembles and reports the results of five complementary and overlapping surveys of local regulation in the San Francisco Bay Area. We compile measures derived from surveys of public officials conducted in 1992 and 1998 and another completed in 2007. In addition, we survey the perceptions of regulation among developers and land-use intermediaries. A rich description and comparison of regulatory patterns is provided. The paper also investigates relationships among various measures of regulation and housing outcomes. We find, for example, that the entitlement process increases the cost of a new single family dwelling by almost $23,000 in the Bay Area. Moreover, the requirement of an additional review by governmental agents to gain approval of new developments is associated with a four-percent increase in the prices of existing owner-occupied housing.

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Other Recent Work (2)

Regional Public Finance and Economic Development: the Indonesian Context

This paper considers the relative centralization or decentralization of public finance, and relates the equity and efficiency issues ot the special features of developing economies. The paper considers the centralization of taxation and service provision in Indonesia in relation to these theoretical prinicples and indicates ways in which we may expect decentralization to proceed in the Indonesian context.

Political and Public Acceptability of Congestion Pricing: Ideology and Self Interest

Studies of the “stated preferences” of households generally report public and political opposition by urban commuters to congestion pricing. It is thought that this opposition inhibits or precludes tolls and pricing systems that would enhance efficiency in the use of scarce roadways. This paper analyzes the only case in which road pricing was decided by a citizen referendum on the basis of experience with a specific pricing system. The city of Stockholm introduced a toll system for 7 months in 2006, after which citizens voted on its permanent adoption. We match precinct voting records to resident commute times and costs by traffic zone, and we analyze patterns of voting in response to economic and political incentives. We document political and ideological incentives for citizen choice, but we also find that the pattern of time savings and incremental costs exerts a powerful influence on voting behavior.

In this instance, at least, citizen voters behave as if they value commute time highly. When they have experienced first-hand the out-of-pocket costs and time-savings of a specific pricing scheme, they are prepared to adopt freely policies that reduce congestion on urban motorways.