Abstract
This paper formulates and estimates an economic model of landlord housing abandonment, using New York City data. A major focus of the study is to investigate the importance of property taxes in the abandonment decision, as opposed to such factors as the types of buildings or the characteristics of households occupying the neighborhood. There are two major results: first, cities can reduce the rate of abandonment by initiating foreclosure as soon as buildings go into arrears on property tax payments (rather than allowing a grace period), and second, property taxes are an important and significant determinant of abandonment rates. The benefits and costs of a policy whereby cities would systematically reduce property taxes in blighted neighborhoods by lowering assessment levels are also explored.
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