This paper examines the effects of local water scarcity management on housing markets, water use, and welfare in Colorado. Rising costs of securing water for new developments have led water utilities to raise the water impact fees (WIFs) that home builders pay to connect new units to the water system, and to adopt variable WIFs based on expected water use. Using a novel dataset on water utility policies, housing outcomes, and aerial imagery with a staggered difference-in-differences approach, I find that variable WIFs reduce new single-family lot sizes by 15% and irrigated areas by 30%, decreasing household water use by 15%. I also find that WIFs are fully capitalized into house prices. To estimate the effect on total water use, housing supply, and welfare, I develop and estimate an equilibrium model of new single-family housing where landowners endogenously choose the lot size and irrigated area of new housing. I estimate that variable pricing policies have increased welfare by $120 million and consumer surplus by $3,500 per household. Compared to counterfactual policies that cap irrigated areas, variable pricing policies have twice the welfare gains while achieving the same decrease in outdoor water use. However, even though metropolitan-area level water use declines, changes to local housing supply cause a local rebound effect that increases residential water use among adopting providers by 7%. Conversely, the cap results in a decline in water use among adopters.

We investigate the impact of recent gentrification shocks on minority neighborhoods in the 50 largest U.S. labor markets. We show that household moves from a given neighborhood are concentrated to few destinations with similar minority shares and strong network ties, but those neighborhoods are farther away from downtown.  Gentrification affects Black neighborhoods by raising house prices, reducing the proportion of Black households, and increasing the share of movers going to neighborhoods with network ties. However, gentrification has negligible effects on Hispanic neighborhoods. Overall labor market area segregation decreases after a gentrification shock because highly Black neighborhoods become less segregated.

This article provides a comprehensive history of default risk for newly originated home mortgages in the USA over the past quarter century. The loan-level source data include the entire guarantee book for Fannie Mae and Freddie Mac. We track many loan characteristics and produce a summary measure of risk. Among our many results, we show that mortgage risk had already risen in the 1990s, planting seeds of the financial crisis well before the actual event. Our results also cast doubt on explanations of the crisis that focus on borrowers with low credit scores. The aggregate series are available for download at https://www.fhfa.gov/papers/wp1902.aspx.