Special Issue on The Impact of Housing Affordability on Economic Development and Regional Labor Markets
Economic Development Quarterly’s November issue features research presented at a February 2020 conference on affordable housing and economic development, conducted in partnership with the Federal Reserve Bank of Atlanta. Stuart Andreason, Guest Editor for the special issue and Assistant Vice President and Director of the Atlanta Fed’s Center for Workforce and Economic Opportunity, begins by introducing the purpose of the conference and special issue, as well as the authors’ research and policy suggestions.
Sarah Miller and Katherine Townsend Kiernan, with the Center for Workforce and Economic Opportunity, present the proceedings of the conference and document the research findings from the authors. Miller and Kiernan also synthetically relate the overall policy implications derived from the conference presenters.
Authors Uche Oluku and Shaoming Chen examine how housing affordability impacts business growth in the Retail, Information, and Professional Services sectors. The findings from their county-level analysis suggest that an increase in a county’s housing unaffordability negatively impacts the number of total establishments in all three sectors. Moreover, their analysis indicates that this negatively impacts growth with time.
Nicholas Kacher and Luke Petach found that changes in housing affordability may impact regional business growth. Their research suggests that moderate growth in housing prices for homeowners increased business creation, but that increases in housing prices for renters slowed business growth. In short, high housing prices tend to crowd out consumer spending on goods and services and lower business growth, while growing housing prices generate more household wealth that could modestly support greater small business openings.
Land-use regulations are proven challenges to housing affordability. Authors John Landis and Vincent Reina investigate the role of land-use regulations in increasing housing costs and reducing housing affordability. They found that higher land-use regulations are associated with higher housing costs, especially in high wage areas.
Robert Wassmer examines whether rising housing prices discourage workers from moving to an area or encourage existing workers to leave an area. Like Landis and Reina, Wassmer’s findings show that land-use regulations can drive up housing costs and cause the exit of workers from labor markets.
Author Xi Yang’s research explores the impact of land-use regulations among different racial groups. Yang’s findings demonstrate that highly regulated metropolitan areas yield a much smaller increase – and sometimes a decrease – in the share of African American workers in response to local labor market demand.
Finally, Karen Chapple and Jae Sik Jeon investigate the relationship between big tech corporate campuses and housing markets in Silicon Valley/San Francisco. They found that housing prices are higher closer to the tech hubs but vary overall across the campuses. While the variation is large, on average, the siting of a tech company facility could push housing prices up by 7% in the immediate vicinity within 2 years.
The latest issue of Economic Development Quarterly (EDQ) is now available online at https://journals.sagepub.com/home/edq.