Research 

Abstract:  Since 1970, home values relative to incomes across the United States have increased by over 50 percent, while California’s home-value-to-income ratio has more than doubled amid the adoption of restrictive housing policies and a reversal in migration flows. In this paper, I investigate the macroeconomic consequences of housing policies in an economy with spatially mobile, heterogeneous households. I develop a dynamic spatial general equilibrium model incorporating life-cycle decisions about housing, migration, and savings, with locations that include amenity and productivity differences. I then calibrate a two-location version of the model to represent California and the broader U.S. economy in 2019. Relaxing California’s housing restrictions to 1970 levels reduces the home-value-to-income ratio by over a fifth, increases measured US output by 2.7 percent, and yields welfare gains of 6.2 percent for current Californians when accounting for transition dynamics. Spatial mobility is a key mechanism, and accounts for over three quarters of the increase in non-housing output. I further modify the calibration to match key moments from 1970 and simulate the transition to the 2019 economy, reflecting changes in housing policy and California’s property tax regime. I find that while most Californian households in 1970 benefited from the changes to housing policies, subsequent generations experienced substantial welfare losses, with Californian newborn welfare declining over 14 percent. Altogether, the findings underscore that housing policies can have significant welfare effects, non-trivially larger than the effect on measured GDP and heterogeneous throughout time.

Abstract: This paper investigates how eviction policy affects individuals' rental choices and welfare across the income distribution. We develop a parsimonious model of rental housing with limited commitment, in which eviction policy influences tenants' ability to commit to rent payments and thereby shapes the pricing and availability of rental housing. The model predicts that stricter eviction regimes expand the set of available rental housing and facilitate household formation, as more individuals are able to rent. Importantly, the effects are heterogeneous: the poorest individuals are always excluded from the rental market; those with intermediate incomes benefit from stricter eviction policy because it allows them to enter the rental market or rent larger housing; richer tenants are worse off because they face a higher likelihood of eviction following adverse income shocks. To test the model, we construct a novel index of eviction regime severity across U.S. jurisdictions. We show that stricter eviction regimes are associated with lower cohabitation with parents and greater household formation among young people, with the strongest effects among individuals with intermediate incomes, consistent with the model's predictions.

Abstract: We study how labor mobility shapes regional tax capacity and population sorting within a federal system. To do so, we develop a general equilibrium model that consists of multiple regions that differ in productivity, amenities, and tax policies. Heterogeneous agents differ in labor productivity and make dynamic decisions over locations, housing, and savings. The model is calibrated to match both U.S. aggregate and regional moments, and is consistent with migration behavior across incomes and demographics. Counterfactual experiments reveal that labor mobility substantially limits the long-run revenue potential of regional income taxes: migration responses can fully offset tax increases, leaving total revenues unchanged even as per-capita revenues rise. The model thus provides a quantitative, macroeconomic explanation for why state and local tax systems in the U.S. are less progressive and rely more on property taxation than the federal system.

Abstract: Unanticipated shocks to household finances are cited as a primary source of default. In this paper, we investigate one source of shock on a homeowner's default decision: the effect of unanticipated increases in their property tax. Leveraging a Michigan constitutional mechanism that generates property tax increases that may be unexpected from the consumer's viewpoint, we examine the ``pop-up” effect when property is purchased from long-time homeowners and estimate its impact on delinquency outcomes for new homeowners. Our estimates from tax payment records for the city of Detroit for 2012-2018 show up to a 1.7 percentage point increase in the probability of delinquency for a 1 percent increase in tax bill differences between old and new homeowners. In addition to the unexpected increases in taxes, the ability to shield oneself from this shock varies across individuals; we examine how effects differ between those purchasing a home with a conventional mortgage versus those who purchase property with cash. Our results highlight the overall effect stems from those paying cash, while those with a mortgage remain unaffected. Overall, our conclusions provide evidence that the taxable value cap affects delinquency and that additional protections should be considered for those without conventional mortgages.