Essays on Housing Market and Local Economy


August 2023

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This dissertation consists of two essays on housing market and local economy. The first essay, included in Chapter 1, is “Real Estate Investors and Property Taxation”. In this paper, we study the inequality in property taxation in the U.S. single-family home market based on a property’s assessed value. Comparing the assessment ratio of properties owned by investors with those of owner-occupiers, we find a 3.0%–4.7% assessment discount nationwide for properties owned by large investors (i.e., those owning more than 100 prop- erties) relative to owner-occupied homes in the same area. This difference translates into an estimated total annual property tax savings of $66–$104 million for large investors across the country. Further evidence based on micro-level appeals data in Cook County, Illinois, and Florida suggests that the institutional assessment discount results from a higher likelihood of appeal and more favorable outcomes upon a successful appeal for large investors. States with a fairer property taxation administration, a higher market share by large investors, and a higher property tax burden show a greater assessment discount for large investors. The second essay, included in Chapter 2, is “Housing Stability and New Business Creation”. It is a joint work with Steven Xiao. We examine whether stronger legal renter rights en- courage business creation by enhancing housing stability. In California, passages of city or- dinances that protect renters from arbitrary evictions increase the number of new businesses by 9.9% and the proportion of female (8.0%) and racial-minority business owners (12.1%). These firms can survive in the long run and perform no worse than others. Household-level analysis shows that renters are less likely to move, more likely to become self-employed and generate more business income after law passages. Our evidence suggests that enhancing housing stability can benefit the local economy by promoting self-employment and job creation.



Economics, Finance