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George Galster - One of the best experts on this subject based on the ideXlab platform.
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neighborhoods and national Housing Policy toward circumscribed neighborhood sensitive reforms
Housing Policy Debate, 2019Co-Authors: George GalsterAbstract:AbstractThis article provides a holistic analysis of why and how federal assisted Housing Policy (specifically, public Housing, Low-Income Housing Tax Credit [LIHTC], and voucher programs) should b...
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neighbourhood social mix as a goal of Housing Policy a theoretical analysis
European Journal of Housing Policy, 2007Co-Authors: George GalsterAbstract:Many western European Housing policies have tried to increase the residential mix of advantaged and disadvantaged groups. Unfortunately, Policymakers have given little consideration to how these groups will interact as neighbours. There are numerous theoretically grounded mechanisms by which the social mix of a neighbourhood may influence socio-economic outcomes of its residents. These mechanisms differ on the basis of which group is generating the social externality in the neighbourhood, whether this externality is positive or negative, whether it affects all residents equally, and whether the marginal externality generated by adding one more member of a particular group is constant, proportional, or is characterized by a threshold effect. This paper demonstrates that a social mix Housing Policy can be justified only under a circumscribed set of the preceding parameters. Indeed, depending on the mechanism assumed, social efficiency implies that neighbourhoods should be either: equally mixed, have the disadvantaged group dispersed as widely as possible, or rigidly segregated; for other mechanisms, mix becomes irrelevant. Thus, for formulating and justifying a mixed Housing Policy on either efficiency or equity grounds it is crucial to understand exactly what sort of neighbourhood effect(s) is operating in neighbourhoods.
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neighbourhood social mix as a goal of Housing Policy a theoretical analysis
European Journal of Housing Policy, 2007Co-Authors: George GalsterAbstract:ABSTRACT Many western European Housing policies have tried to increase the residential mix of advantaged and disadvantaged groups. Unfortunately, Policymakers have given little consideration to how these groups will interact as neighbours. There are numerous theoretically grounded mechanisms by which the social mix of a neighbourhood may influence socio-economic outcomes of its residents. These mechanisms differ on the basis of which group is generating the social externality in the neighbourhood, whether this externality is positive or negative, whether it affects all residents equally, and whether the marginal externality generated by adding one more member of a particular group is constant, proportional, or is characterized by a threshold effect. This paper demonstrates that a social mix Housing Policy can be justified only under a circumscribed set of the preceding parameters. Indeed, depending on the mechanism assumed, social efficiency implies that neighbourhoods should be either: equally mixed, hav...
Kenneth P Brevoort - One of the best experts on this subject based on the ideXlab platform.
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the subprime crisis is government Housing Policy to blame
The Review of Economics and Statistics, 2015Co-Authors: Robert B Avery, Kenneth P BrevoortAbstract:Abstract Some have suggested that Housing Policy, embodied by the Community Reinvestment Act (CRA) and affordable Housing goals of the government-sponsored enterprises (GSEs), caused the subprime crisis. We examine if these programs led to worse mortgage outcomes using two approaches. The first examines whether more activity by CRA-covered lenders, or more loan sales to the GSEs, was associated with worse outcomes. The second uses regression discontinuity to determine if outcomes were worse at the geographic thresholds used by each program. Our results suggest that neither program played a significant role in the subprime crisis.
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the subprime crisis is government Housing Policy to blame
Research Papers in Economics, 2011Co-Authors: Robert B Avery, Kenneth P BrevoortAbstract:A growing literature suggests that Housing Policy, embodied by the Community Reinvestment Act (CRA) and the affordable Housing goals of the government sponsored enterprises, may have caused the subprime crisis. The conclusions drawn in this literature, for the most part, have been based on associations between aggregated national trends. In this paper we examine more directly whether these programs were associated with worse outcomes in the mortgage market, including delinquency rates and measures of loan quality. We rely on two empirical approaches. In the first approach, which focuses on the CRA, we conjecture that historical legacies create significant variations in the lenders that serve otherwise comparable neighborhoods. Because not all lenders are subject to the CRA, this creates a quasi-natural experiment of the CRA's effect. We test this conjecture by examining whether neighborhoods that have been disproportionally served by CRA-covered institutions historically experienced worse outcomes. The second approach takes advantage of the fact that both the CRA and GSE goals rely on clearly defined geographic areas to determine which loans are favored by the regulations. Using a regression discontinuity approach, our tests compare the marginal areas just above and below the thresholds that define eligibility, where any effect of the CRA or GSE goals should be clearest. We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes.
Edward J Pinto - One of the best experts on this subject based on the ideXlab platform.
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the impact of federal Housing Policy on Housing demand and homeownership evidence from a quasi experiment
Journal of Housing Economics, 2020Co-Authors: Morris A Davis, Stephen D Oliner, Tobias Peter, Edward J PintoAbstract:Abstract Federal Housing Policy promotes homeownership by subsidizing mortgage debt for many households with few assets and low credit scores. In this paper, we exploit the Federal Housing Administration's (FHA's) surprise 50 basis point cut to its annual mortgage insurance premium in January 2015 to study the impact of federal Housing Policy and interest rates on Housing demand for a population of households likely to be influenced by changes to Policy. The premium cut, which reduced monthly payments the same amount as a three-quarter percentage point drop in the mortgage rate, increased the purchasing power of the typical FHA borrower by 6 percent. Our analysis shows FHA borrowers increased the value of the Housing they purchased by 2.5 percentage points relative to a control group of borrowers in areas with minimal FHA presence. The rise in spending reflected an increase in constant-quality home prices, with no significant change in the quality of Housing purchased by FHA buyers. We also estimate that the premium cut induced approximately 17,000 households to become first-time homebuyers in the initial year after the cut, an increase that fell far short of the FHA's projection.
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the impact of federal Housing Policy on Housing demand and homeownership evidence from a quasi experiment
Social Science Research Network, 2018Co-Authors: Morris A Davis, Stephen D Oliner, Tobias Peter, Edward J PintoAbstract:Federal Housing Policy promotes homeownership by subsidizing mortgage debt for many households with few assets and low credit scores. In this paper, we exploit the Federal Housing Administration’s (FHA’s) surprise 50 basis point cut to its annual mortgage insurance premium in January 2015 to study the impact of federal Housing Policy and interest rates on Housing demand for a population of households likely to be influenced by changes to Policy. The premium cut, which reduced monthly payments the same amount as a three-quarter percentage point drop in the mortgage rate, increased the purchasing power of the typical FHA borrower by 6 percent. Our analysis suggests FHA borrowers increased the value of the Housing they purchased by 2.5 percentage points relative to a control group of borrowers in areas with minimal FHA presence. The rise in spending reflected an increase in constant-quality home prices, with no significant change in the quality of Housing purchased by FHA buyers. We also estimate that the premium cut induced approximately 17,000 households to become first-time homebuyers in the initial year after the cut, an increase that fell far short of the FHA’s projection. Because the rise in constant-quality house prices affected both FHA and other buyers in areas with substantial FHA lending, non-FHA first-time buyers as a group incurred a cost of $180,000 for each of the 17,000 new first-time FHA buyers.
Kirk Mcclure - One of the best experts on this subject based on the ideXlab platform.
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rethinking federal Housing Policy
Journal of The American Planning Association, 2010Co-Authors: John D Landis, Kirk McclureAbstract:Problem: Federal Housing Policy is made up of disparate programs that a) promote homeownership; b) assist low-income renters’ access to good-quality, affordable Housing; and c) enforce the Fair Housing Act by combating residential discrimination. Some of these programs are ineffective, others have drifted from their initial purpose, and none are well coordinated with each other. Purpose: We examine the trends, summarize the research evaluating the performance of these programs, and suggest steps to make them more effective and connected to each other. Methods: We review the history of Housing Policy and programs and empirical studies of program effectiveness to identify a set of best principles and practices. Results and conclusions: In the area of homeownership, we recommend that the federal government help the nation's Housing markets quickly find bottom, privatize aspects of the secondary mortgage market, and move to eliminate the mortgage interest deduction and replace it with a 10-year homeownership ...
Robert B Avery - One of the best experts on this subject based on the ideXlab platform.
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the subprime crisis is government Housing Policy to blame
The Review of Economics and Statistics, 2015Co-Authors: Robert B Avery, Kenneth P BrevoortAbstract:Abstract Some have suggested that Housing Policy, embodied by the Community Reinvestment Act (CRA) and affordable Housing goals of the government-sponsored enterprises (GSEs), caused the subprime crisis. We examine if these programs led to worse mortgage outcomes using two approaches. The first examines whether more activity by CRA-covered lenders, or more loan sales to the GSEs, was associated with worse outcomes. The second uses regression discontinuity to determine if outcomes were worse at the geographic thresholds used by each program. Our results suggest that neither program played a significant role in the subprime crisis.
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the subprime crisis is government Housing Policy to blame
Research Papers in Economics, 2011Co-Authors: Robert B Avery, Kenneth P BrevoortAbstract:A growing literature suggests that Housing Policy, embodied by the Community Reinvestment Act (CRA) and the affordable Housing goals of the government sponsored enterprises, may have caused the subprime crisis. The conclusions drawn in this literature, for the most part, have been based on associations between aggregated national trends. In this paper we examine more directly whether these programs were associated with worse outcomes in the mortgage market, including delinquency rates and measures of loan quality. We rely on two empirical approaches. In the first approach, which focuses on the CRA, we conjecture that historical legacies create significant variations in the lenders that serve otherwise comparable neighborhoods. Because not all lenders are subject to the CRA, this creates a quasi-natural experiment of the CRA's effect. We test this conjecture by examining whether neighborhoods that have been disproportionally served by CRA-covered institutions historically experienced worse outcomes. The second approach takes advantage of the fact that both the CRA and GSE goals rely on clearly defined geographic areas to determine which loans are favored by the regulations. Using a regression discontinuity approach, our tests compare the marginal areas just above and below the thresholds that define eligibility, where any effect of the CRA or GSE goals should be clearest. We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes.