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Are Central Cities Poor and Non-White?
For much of the 20th century, America's central cities were viewed as synonymous with economic and social hardship, often used as proxy for low-income communities of color. Since the 1990s, however, many metropolitan areas have seen a resurgence of interest in central city neighborhoods. Theoretical models of income sorting lead to ambiguous predictions about where households of different income levels will live within metropolitan areas. In this paper, we explore intra-city spatial patterns of income and race for U.S. metropolitan areas, focusing particularly on the locations of low-income ...
Can More Housing Supply Solve the Affordability Crisis? Evidence from a Neighborhood Choice Model
We estimate a neighborhood choice model using 2014 American Community Survey data to investigate the degree to which new housing supply can improve housing affordability. In the model, equilibrium rental rates are determined so that the number of households choosing each neighborhood is equal to the number of housing units in each neighborhood. We use the estimated model to simulate how rental rates would respond to an exogenous increase in the number of housing units in a neighborhood. We find that the rent elasticity is low, and thus marginal reductions in supply constraints alone are ...
Preferences over the Racial Composition of Neighborhoods: Estimates and Implications
We estimate the parameters of a dynamic, forward-looking neighborhood choice model in 197 metro areas where households have preferences over the racial composition of neighborhoods. Our inclusion of multiple metro areas in the estimation sample enables us to develop a new, shift-share IV strategy to estimate the impact of the racial composition of neighborhoods on location choice that relies only on across-metro comparisons of similarly situated neighborhoods. For the “shift,” we use national data to determine the probabilities different types of households live in different neighborhoods ...