Housing Demand Research Articles

Can Economic Fact-Checking Remedy Incorrect Beliefs About Housing Markets?

Supply skepticism is the widely held belief that building more market-rate housing does not help reduce housing prices. Why is supply skepticism a problem, and what is likely to be publicly engaged scholars’ best approach to correcting it? Been et al. have been the leading scholars bringing attention to the phenomenon, and have compiled new economic evidence that increasingly demonstrates that market-rate housing construction reduces housing prices. Will the skeptics who deny the operation of supply and demand in housing markets be persuaded? This seems unlikely. Engaged policy elites who question the benefit of additional housing supply already have well-formed views that are unlikely to be converted by recent, incremental discoveries about housing supply’s price effects. At first glance, the lay public also appears to be supply-skeptical, but their beliefs are only weakly held and unstable. Instead of clear beliefs about markets (skeptical or otherwise), people hold “folk-economic” views that personalize market interactions and blame “bad actors” for high housing prices. They support state housing policies that would punish putative bad actors (e.g., developers, landlords, and Wall Street investors) while showing only tepid and unstable support for building additional market-rate housing. The silver lining for pro-supply advocates is that the average voter’s poorly formed views about housing markets might be susceptible to education and persuasion campaigns that can effectively simplify current research findings.

Earned Income Tax Credit Plus: A New Way to House the Working Poor

The housing affordability crisis is one of the defining features of the US today. The demand for housing subsidies outstrips supply by a factor of at least 4 to 1. Moreover, housing affordability varies greatly between and within metropolitan areas. This article proposes a new federal policy—the Earned Income Tax Credit (EITC) Plus—to decrease housing cost burdens for working households by combining aspects of two major federal programs, the EITC, a tax-based subsidy for low-income working households, and the Housing Choice Voucher, a subsidy that pays the difference between 30% of household income and rent. We propose an EITC housing supplement via the tax code for markets where income and current EITC benefits are below 30% of rent levels. It will reduce the housing affordability crisis and reduce the geographic disparities of the Housing Choice Voucher. We simulate the cost at $101 billion nationally (based on 2021 figures). Varying program rules and parameters can significantly reduce costs. Piggybacking on the EITC simplifies the proposal’s implementation and increases its political palatability.

Comparative Analysis of Household Residential Preferences Across Neighbourhood Densities in Nairobi, Kenya

Rapid urban growth in Nairobi city outstrips demand and provision of adequate housing. The demand for housing in an area is dependent on the satisfaction of the resident’s needs and wants. This paper examines the residential preferences of residents in three residential estates, low, medium, and high densities in Nairobi City, Kenya. Data was collected by use of questionnaires that were administered to 267 households. Primary data was collected for this study. The data collected was analysed using factor analysis and ordinal regression. Data was presented in the form of tables. The results indicate residential preferences among high, medium and low-density areas vary. The most preferred factors for low-density residents were safety and security, open spaces and facilities; while the residents in high-density areas preferred housing diversity, local employment and close proximity to the workplace. The least preferred factor for low-density residents was close proximity to work place since they own cars hence they are more willing to commute while high-density residents prioritize proximity to work to minimize transportation costs. Residential preferences varied by density, age, gender, education and years lived in an estate. Preference for safer neighbourhoods with open spaces and facilities was high for residents in low-density areas while preference for neighbourhoods with housing diversity, local employment and close proximity to workplaces was high among the residents in high-density estates. These insights underscore the importance of addressing the varied needs and preferences of different demographic groups in urban planning and housing policy to create more equitable and livable communities in Nairobi in order to limit housing mismatch. This study contributes to the planning studies by firming up empirical evidence from developing countries that have high populations in urban areas

An interlinked dynamic model of timber and carbon stocks in Japan's wooden houses and plantation forests

Carbon absorption in growing trees is an important element of a carbon-neutral society, and the long-term storage of carbon stocks is a crucial sustainability challenge. Previous studies have focused on either live-biomass carbon stocks in plantation forests or anthropogenic carbon stocks in man-made objects. For a comprehensive nature-based climate solution, an analytical framework, dataset, and scenario setup for modeling the interrelationship between timber supply and demand are required. This study developed an interlinked material flow analysis model in which the timber demand for wooden houses is connected with timber supply from managed plantation forestry. We demonstrate the model by quantifying both live-biomass and anthropogenic carbon stocks and their potentials in Japan. We compared multiple scenario-runs of the model for wooden house demands estimated by population change with varying combinations of house types, structures, and lifespans. Our results show that carbon stocks will reach a maximum amount of 1.1 billion t-C by 2050 in a scenario of high demand for wooden detached houses with lifespan extensions. On the other hand, we also found that the aging of plantation forests and their reduced carbon-stocking capacities appear inevitable in any scenario owing to the limited demand for timber. Notably, despite the widely different settings of the various scenarios, our results exhibited narrow variances in future potential carbon storage in Japan. This can be explained by the unique population characteristics and building demographics of Japan. These counterintuitive findings highlight the need for interrelated modeling of the forestry and construction sectors. Our model and its scope are versatile and applicable to other case study areas, estimation periods, and target materials.

Race, profit, and algorithms: Neighborhood-level analysis of iBuyers’ profit margin

ABSTRACT iBuyers are firms that use automated valuation models (AVMs), streamline home buying processes, and provide all-cash offers to purchase homes. Although the previous literature has explored the roles and limitations of iBuyers in the housing market, empirical research on the racial implications of these algorithmic home buying processes remains understudied. Using a spatial lag model, this study shows the spatial clustering of iBuyer profit margins, that iBuyers gain more profits when they resell to individuals than institutions, and that some iBuyers have a statistically significant correlation between their profit margins and the proportion of marginalized racial groups within a census tract, while controlling for individual housing characteristics, neighborhood housing quality and demand, and neighborhood amenities and socioeconomic factors. These findings suggest that the more adeptly iBuyers can forecast housing values, the greater the potential to maximize profits from homeowners in communities of color. Consequently, this research contributes to the understanding of how technological mechanisms operate within a purportedly race-neutral framework and advocates for the development and deployment of algorithmic systems guided by the principles of antisubordination, rather than relying solely on notions of “fairness” and anticlassification.

Evolution of the Planning Paradigm and Urban Design of Housing Complexes in the Context of Changing Challenges in Ukraine: Case of Lviv

The study provides a retrospective of the housing development in Lviv and the factors that affected it. Using the general process of housing evolution, the study focuses on the impact of the war as a catalyst that influenced the demand and volume of housing construction over the last decade. Moreover, it reflects the unprecedented demographic shift driven by the number of IDPs in Ukraine since the beginning of 2022. The study demonstrates that, due to the increased demand for housing, the approaches to the design of housing have changed in recent years, defining a new type of urban unit called a housing complex. The study aims to identify and examine the genesis and characteristics of the modern planning paradigm and urban design of residential architecture in Lviv in the context of shifting conditions. Spatial and urban characteristics, social indicators, resident focus, and urban influence evaluate the studied objects. The study results demonstrate key differences in planning philosophies and approaches to designing and constructing new housing, identifying qualitative differences between housing of the previous and current paradigms. A detailed examination and comparison of the studied complexes in Lviv reveals changes in the approach to their planning, reflecting the evolution from the inherited modernist approach to housing to the creation of sustainable planning. It also aims to determine the quality of Lviv's modern housing environment and the vector of its development.

Evolution of the Planning Paradigm and Urban Design of Housing Complexes in the Context of Changing Challenges in Ukraine: Case of Lviv

The study provides a retrospective of the housing development in Lviv and the factors that affected it. Using the general process of housing evolution, the study focuses on the impact of the war as a catalyst that influenced the demand and volume of housing construction over the last decade. Moreover, it reflects the unprecedented demographic shift driven by the number of IDPs in Ukraine since the beginning of 2022. The study demonstrates that, due to the increased demand for housing, the approaches to the design of housing have changed in recent years, defining a new type of urban unit called a housing complex. The study aims to identify and examine the genesis and characteristics of the modern planning paradigm and urban design of residential architecture in Lviv in the context of shifting conditions. Spatial and urban characteristics, social indicators, resident focus, and urban influence evaluate the studied objects. The study results demonstrate key differences in planning philosophies and approaches to designing and constructing new housing, identifying qualitative differences between housing of the previous and current paradigms. A detailed examination and comparison of the studied complexes in Lviv reveals changes in the approach to their planning, reflecting the evolution from the inherited modernist approach to housing to the creation of sustainable planning. It also aims to determine the quality of Lviv's modern housing environment and the vector of its development.

Housing Inclusion Perspective: The Causal Structure of Housing Cost Burden, Fertility Intentions, and Social Housing in Urban China

To address low fertility and enhance urban inclusiveness and sustainability, this study conducted a questionnaire survey in 35 cities in China, systematically collected data on housing inclusiveness and fertility intentions, and used the SEM to analyze the causal relationship between housing costs burden, fertility intentions, and perceived need for social housing. The results show that the housing cost burden has a statistically significant positive (+) effect on the perceived need for social housing and a statistically significant negative (−) effect on fertility intentions, and that fertility intentions have a positive (+) effect on the perceived need for social housing. Notably, the direct effect of the housing cost burden on the perceived need for social housing (0.15) is greater than the total effect of the housing cost burden on the perceived need for social housing mediated by fertility intentions (0.14). This suggests that even when housing costs are high, families who still plan to have children exhibit a greater demand for social housing. Therefore, social housing can positively impact fertility intentions and help reduce housing cost pressures on families. Additionally, actively promoting inclusive housing development will have a significant impact on the sustainable growth of the urban population and economy, making meaningful contributions.

Tradeoffs and synergy between material cycles and greenhouse gas emissions: Opportunities in a rapidly growing housing stock

AbstractManagement of building materials’ stocks and flows is a major opportunity for circularity and de‐carbonization. We examine the relationship between material consumption and associated greenhouse gas (GHG) emissions under different scenarios in Israel, a developed country with an already high population density that expects tremendous growth in its housing stock by 2050. We created scenarios of varying housing unit sizes and additional material efficiency practices: fabrication yield, lifetime extension, material substitution, recycling, and their combination, resulting in 18 scenarios. In each scenario, the material flows and stocks needed to supply the housing demand and the resulting life‐cycle GHG emissions are quantified. No single material efficiency practice achieves a reduction in all indicators, suggesting a potential conflict between circular economy and decarbonization policies: The material substitution scenario allows for the biggest reduction in material consumption (12%–40% concrete reduction and 15%–51% steel reduction in 2050 compared with the baseline), while the recycling scenario achieves the biggest reduction in GHG emissions (22%–43% reduction in 2050 compared with the baseline). In the long‐term, the life‐extension scenario reduces most demolition waste. These findings can help policymakers and stakeholders consider the impacts of raw materials consumption and implement this knowledge in light of their priorities in policy packages. The results suggest a narrow window of opportunity within the next decade to influence material consumption and emissions to 2050. The findings could also shed light on the sustainability trajectories of other countries with similarly rapidly developing building stock, which have received little attention in this field.

Deciphering house prices by integrating street perceptions with a machine-learning algorithm: A case study of Xi'an, China

A comprehensive understanding of house prices and their factors provide insights into the demand for housing while helping policymakers implement measures to manage the housing market. Traditional studies either focus more on linear relationships and ignore complex, non-linear influences or consider neighborhood amenities but lose sight of the streetscape. This study aims to enrich the literature by integrating street-perception characteristics with an interpretable machine-learning technique for modeling house prices. Specifically, street-view images were semantically segmented to quantify street-perception characteristics from five perspectives: greenness, openness, enclosure, walkability, and imageability. By combining the determinants of community attributes and living convenience, 17 explanatory variables were fed into a gradient-boosting decision tree (GBDT) model to estimate housing prices. The results reveal that the model significantly outperforms the linear model (R2 increased by 47.87 %). Additionally, an improvement of 26.15 % (R2) was observed when street-perception characteristics were incorporated. Moreover, complicated non-linear relationships and interaction effects are discussed by visualizing partial dependence plots (PDPs). These findings offer nuanced guidance for improving the neighborhood environment to promote urban equity and develop a sustainable housing market.

Duality of Housing Demand and Supply with Mixed Concentration and Diffusion: Case Study of Takasaki City Facing an Era of Depopulation

Duality of Housing Demand and Supply with Mixed Concentration and Diffusion: Case Study of Takasaki City Facing an Era of Depopulation

Immigrants and house prices: myths and realities

PurposeThis paper aims to dissect myths from realities. It delves into the nuanced relationship between immigration and housing, emphasizing that while correlation exists, causation is not straightforward. By exploring factors beyond immigration driving housing costs and the multifaceted impact of immigration on labour markets and economic growth, the paper seeks to inform evidence-based policies. It underscores immigration's pivotal role in filling labour shortages, fostering innovation and offsetting demographic challenges. Ultimately, the paper advocates for nuanced policy responses that acknowledge immigration's contributions while addressing housing affordability concerns, steering away from simplistic narratives and embracing the complexities of the issue.Design/methodology/approachOur methodology entails a comprehensive review of literature to elucidate the complex relationship between immigration and housing prices in Canada. We examine studies estimating causal effects of immigration on housing prices, while also considering myriad factors influencing housing demand and supply. Moreover, we analyse government immigration policies to assess their impact on housing markets. Additionally, we integrate insights from economic theory to understand the interconnectedness between immigration, labour markets and housing affordability. Through rigorous analysis and synthesis of existing research, we aim to provide clarity on the myths and realities surrounding the perceived link between immigration and housing prices.FindingsThe paper highlights Canada's historical support for immigration and its substantial benefits, including addressing labour shortages, enhancing economic growth and cultural diversity. However, concerns over immigration's impact on housing prices have shifted public opinion. While immigration is often correlated with housing price increases, causality is complex, with myriad factors at play. Few studies estimate a small, varied effect of immigration on housing prices. Importantly, immigrants increasingly settle in areas with lower housing costs, suggesting self-correcting equilibrium. Immigration also serves as a vital labour source, potentially alleviating housing supply bottlenecks. Restrictive immigration policies risk overlooking these multifaceted contributions to the economy and housing markets.Originality/valueThe paper delineates the complex relationship between immigration and housing prices in Canada, elucidating that while immigration is often correlated with housing price increases, it may not be the causal factor. It highlights the myriad of factors, beyond immigration, influencing housing demand and supply. Despite concerns over immigrants' impact on housing affordability, their contribution to labour markets, innovation and economic growth is substantial. The discussion underscores the importance of informed policies that address both housing affordability and labor market needs. Immigration, far from being solely a factor driving up housing prices, serves as a vital source of labour, fostering economic vitality and cultural diversity in Canada.

Going Nowhere Faster: Did the Covid-19 Pandemic Accelerate the Trend Toward Staying Home?

Problem, research strategy, and findings Covid-19 significantly altered work, out-of-home activity participation, and travel, with much activity time being moved into the home. If these patterns hold, they could imply significant long-term changes for homes, businesses, cities, and transportation. We examined data for 34,000 respondents to the American Time Use Survey from 2019 (the pre-pandemic period), 2021 (the pandemic period), and 2022 and 2023 (the post-pandemic period). We used ordinary least squares (OLS) regressions to study participation in 12 out-of-home activities, travel (by auto, transit, and walking), and 16 in-home activities. We observed sharp declines in overall out-of-home activity, travel by all modes, and 10 of the 12 specific out-of-home activities in 2021 compared with 2019, whereas time spent on 13 of the 16 in-home activities rose during that period. By 2023, most of these changes persisted: Time spent out-of-home, traveling by all modes, and on six out-of-home activities remained notably lower in 2023 than in 2019, whereas time spent on nine in-home activities remained higher. The trend away from out-of-home activities and travel appears to be persisting. Takeaways for practice First, given elevated remote work and shopping, planners should consider repurposing some office and retail land uses. Second, with fewer office workers, center cities may have to capitalize on other strengths such as recreational and residential desirability for some market segments, such as young people or others who prefer urban living. Third, more time at home may increase demand for more spacious and affordable housing, perhaps in lower-cost outlying suburbs of large metros and in smaller metropolitan areas. Finally, an end to ever-rising personal travel may lessen the need for costly interventions to increase the capacity of highway and transportation systems.

Examining surplus and shortage in occupied housing preference in Malaysia

Purpose Housing sufficiency is a critical indicator of national development and growth. However, in most countries, housing affordability remains a significant challenge, leading to a mismatch between housing supply and demand. The purpose of this study is to investigate the housing preferences, current occupation and the resulting surplus and shortage across various housing types. Design/methodology/approach Data were collected through a survey, and the analysis focused on quantifying the mismatch between preferred and occupied housing types. Findings Results revealed significant disparities between housing preferences and current occupation, with some housing types experiencing surplus and others facing shortages. The findings uncovered a 23% discrepancy in housing demand and supply. The sensitivity results indicate that 30% of the respondents currently living in a particular type of housing unit would choose to live there if given the option. The specificity results show that 90% of respondents not living in a particular type of housing unit would continue to avoid choosing it. Housing price, income, ethnicity, race and location are the major drivers of the housing preferences. Practical implications Developers can align their projects with consumer preferences to minimize surplus and shortages. Financial institutions may consider these insights when tailoring mortgage products to meet the diverse needs of potential homebuyers. This research provides a valuable foundation for strategic planning and policy formulation aimed at enhancing housing sufficiency and socioeconomic development in Malaysia. Originality/value This study lays the foundation for future research and for incentive mechanisms for homebuyers and developers. The results are useful to policymakers, developers, banks, consultants, housing associations and academics.

Transforming landscapes: Decoding the impact of universities on urbanization using advanced modeling and perception analysis.

Universities play a crucial role in urban economic and structural development. The government of Bangladesh has undertaken the initiative to establish a public university in each of the 64 districts. These newly founded universities have the potential to impact urban growth significantly. We aimed to project university-induced urban expansion to address this knowledge gap and identify the mechanisms driving urban growth. The classification of supervised and unsupervised methods was employed to analyze urban development for the years 2000, 2010, 2016, and 2022. We used the Cellular Automata and Markov Chain approach to forecast future urban growth and land transition capacity. Additionally, the driving factors and selection of the study area were derived from Focus Group Discussions (FGD), Key Informant Interviews (KII), Probit Model, and Perception Index (PI). The findings of this study reveal a 1.6% urban growth rate within ten years of the establishment of the university, while urban expansion accelerated to 29.78% after ten years. The predictions also indicate a sustained urban growth rate of 4.7% by 2042. Furthermore, the PI index demonstrates that the establishment of the university has resulted in high demand for rental housing, serving as one of the primary drivers of urban expansion. Moreover, the Probit model highlights strong economic capability, proximity to the town, railway station, hospital, and easy access to credit as vital facilitators behind the drivers of urban expansion. Policymakers, the scientific community, and urban planners can benefit from this study in pursuing sustainable city development through university establishment.

Modular momentum: assessing the efficacy of modular construction in alleviating the UK housing crisis

This manuscript critically evaluates the potential of modular construction as a viable remedy to the ongoing housing crisis in the UK. In light of the escalating construction costs and the long-standing lack of productivity gains in the residential construction sector, there is in fact an urgent need to explore innovative solutions to address the scarcity of affordable housing. The study delves then into the feasibility and effectiveness of modular construction in providing cost-efficient and sustainable housing alternatives, particularly for the working-class population. Through a comprehensive analysis of construction trends and methodologies, and stakeholder perspectives, this research aims to illuminate the advantages and limitations of modular construction compared to traditional building techniques. Drawing upon data sourced from construction professionals, and government records, the study assesses crucial factors such as construction timelines, financial implications, design adaptability, and overall efficacy in tackling the housing crisis. The findings of this study are poised to offer valuable insights into the potential role of modular construction in transforming housing solutions in the UK. By examining the intersection of housing demand, construction practices, and technological advancements, the manuscript seeks to inform decision-making processes in both public and private sectors. Ultimately, the objective is to identify strategies that can facilitate the widespread adoption of modular construction as a sustainable and scalable solution to the housing crisis, in line also with the principles of the circular economy, thereby enhancing access to safe, affordable, and high-quality housing for all segments of society.

External Shocks, Asset Prices, and Credit Dynamics in Morocco: Insights from Disequilibrium Models

We investigate external shocks and asset price’s impact on the slowdown of business and household credit in Morocco using disequilibrium models. The results show that banks’ fly to quality, driven by a simultaneous decline in interest margins and borrower creditworthiness, is a key factor behind the slowdown of credit supply. On the demand side, slower growth and saturated housing demand have contributed to reduced borrowing and repayment capacity of borrowers. Furthermore, external shocks are transmitted to credit supply through foreign deposits and households’ credit demand through remittances. Additionally, stocks and residential real estate asset prices are closely tied to credit demand. These findings suggest that addressing bank credit barriers could stimulate economic growth. To do so, policymakers may consider employing unconventional monetary policy tools to effectively manage the transmission channels of external shocks and asset prices to bank credit dynamics.

Relationship between Residential Patterns and Socioeconomic Statuses Based on Multi-Source Spatial Data: A Case Study of Nanjing, China

The relationship between residential patterns and socioeconomic statuses highlights the complex interactions between the economic regime, welfare system, and neighborhood effects, which are crucial in urban inequality studies. With the diversification of the housing demand and supply system, the traditional analysis conducted separately from the ethnic or spatial segregation perspective fails to capture the rising inequalities and changing socio-spatial context. Taking Nanjing as an example, based on a multi-source database including the housing price, residential environmental quality, surrounding support facilities, and mobile phone user portrait data, this paper proposed a modified method for discovering the coupling relationship between residential patterns and socioeconomic statuses. It is found that socioeconomic status contributes to residential spatial aggregation and that the relationship between social and spatial dimensions of residential differentiation is tightly coupled and related. The lower socioeconomic strata were displaced to the periphery and the older urban core, while affluent inhabitants were more likely to settle voluntarily in segregated enclaves to isolate themselves from the general population through more flexible housing options. The heterogeneity of the urban socioeconomic dimension is primarily affected by consumption and occupational status, while housing prices mainly determine the divergence of spatial distribution.

Identifying the Housing Bubble Predictors in Asian Emerging Economy: Exploring a Novel Model Based on Opinions

This study seeks to identify core housing bubble predictors and empirically investigate a novel model for detecting housing bubbles in Malaysia. We engender new insights based on the extraction of real-time opinions of market players about housing bubble formation and collapse. We employ a practical approach using a comprehensive survey of opinions from relevant walks of life via the survey data analysis software, SmartPLS3. Results indicate that housing demand, economic growth outlook, and buyers’ expectations positively impact the housing bubble. This study’s present housing market condition, foreign investment, and government policies are otherwise insignificant. We found that the present housing condition, government policies, and economic growth outlook do not influence the impact of housing demand, buyers’ expectations, and foreign investment on the housing bubble. We employed a cross-sectional research design in this study to obtain our findings. This might have indirectly suppressed more robust findings, which may have been otherwise obtained in the case of a longitudinal study. We advocate that policymakers should not overlook the significant roles of housing demand, economic growth outlook, and buyers’ expectations of the housing bubble. We show that the present housing market condition has no significant moderating effect on the impact of buyers’ expectations, foreign investment, and housing demand on housing bubbles.

Transparent insulation integration in solar thermal collector: Advancing performance for domestic water heating in oceanic climates of Western Europe

Decarbonizing residential hot water demand requires efficient solar collectors. Conventional flat plate collectors are widely available but experience high heat losses in colder climates. This work investigates the performance of a modified flat plate collector that incorporates honeycomb transparent insulation to reduce convective heat loss, offering a cost-effective alternative to energy-efficient evacuated tube collectors. The thermal performance of the modified flat plate collector was obtained using the finite element method in COMSOL Multiphysics, revealing a significant reduction in convective heat loss. The obtained thermal performance was then incorporated into a transient simulation to assess the year-around performance of the modified flat plate collector in a solar domestic hot water system for Irish climate. The transient simulation accounted for variations in the transparent insulation’s transmission with incidence angle which was overlooked in previous studies. Over a year-long simulation, the modified flat plate collector generated a total useful energy of 532.45 kWh m−2, while requiring 1640 kWh of auxiliary energy to meet the hot water demand of a single-family house in Ireland. An economic analysis of solar domestic hot water system revealed that the modified flat plate collector could yield savings of 443.44 € more than the standard flat plate collector and 3281.03 € more than the evacuated tube collector for homeowners. Consequently, the simple payback period for the solar domestic hot water system decreased from 3.72 years with a standard flat plate collector and 8.37 years with an evacuated tube collectors to 3.56 years with a modified flat plate collector. In addition to its economic viability, the modified flat plate collector could result in a CO2 savings of 901.85 kgCO2 per year. The study concludes with a sensitivity analysis to identify the market conditions that maximize the profitability of the modified flat plate collector based solar domestic hot water system.