Book smart
Stephen Malpezzi, Professor Department of Real Estate and Urban Land Economics in the School of Business, “A Primer on U.S. Housing Markets and Housing Policy,” Urban Institute Press, 2003. Co-author: Richard K. Green, professor of real estate finance at George Washington University and former member of UW–Madison’s real estate department.
Malpezzi and Green explain the economics of housing policy through a broad review of the American market for housing services. Their work includes a conceptual framework, an overview of housing demand and supply, methods for measuring prices and quantities, and sources of basic data on markets. The authors review housing programs and policies and answer policy questions of current interest.
They explore the best ways to subsidize housing for poor households; the effects of land-use and development regulation on housing costs and affordability; what is known — and still isn’t known — about racial discrimination in housing and mortgage markets; and how market conditions affect homelessness.
Blending their fresh research with existing work, Malpezzi and Green identify and address gaps in the housing economics literature, especially “in trends in housing affordability, and on the effect of taxes and regulations on housing costs,” says Malpezzi. He will participate in the Wisconsin Housing Conference on the preservation of affordable housing May 19-20 at the Fluno Center.
The biggest surprise for the authors was finding that homeownership has real social benefits, Malpezzi says. “Even after controlling for income, family status and other determinants, the children of homeowners do better in school, are less likely to get in trouble with juvenile authorities and so on.”
Other findings may surprise people unfamiliar with economic research on housing, Malpezzi says. For example, an overly stringent regulatory environment — zoning or building codes that are stricter than required to provide basic health and safety or to meet other concrete objectives — often contribute more to higher housing costs for low-income households than construction of publicly subsidized units can offset. Despite the high cost of large federal tax breaks for mortgage interest and local property taxes, these deductions barely affect the homeownership rate.
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