Job Market Paper
Job Market Paper
Abstract: This paper tests the efficiency of local public-good provision in Mello-Roos Community Facilities Districts (CFDs) in California by investigating the effects of the Mello-Roos tax, a non-ad valorem tax associated with CFDs to fund public goods, on property values. The Mello-Roos tax captures variations in public-good provision across communities that are beyond the baseline funded through traditional revenue sources, under California's substantial property tax limitations since Proposition 13. The paper demonstrates that underprovision in local public goods is implied by a positive Mello-Roos tax effect on property values for properties of all sizes. The results from estimating hedonic pricing models show that, for CFDs in Los Angeles, Riverside, and San Diego Counties, there is no evidence of underprovision of local public goods, and the result is not inconsistent with efficient public-good provision for counties except for San Bernardino. Cities with a greater revenue, greater expenditure, and lower density have more positive Mello-Roos tax effects on property values, which is consistent with high-demand, high-provision-cost areas being those where budgetary restrictions originating from Proposition 13 are more binding, limiting public-good provision.
Abstract: Housing supply constraints represent a critical challenge in California. While existing research emphasizes regulatory restriction reforms that primarily affect infill development, policies like Mello-Roos Community Facilities Districts (CFDs) may inadvertently encourage greenfield development, a potentially more politically feasible approach to expanding housing supply. This paper provides the first empirical evidence on Mello-Roos impacts on housing development patterns using a two-way fixed effects model for San Bernardino County data from 2014-2021. Results show that cities with greater Mello-Roos usage issue significantly more home construction permits, though this coincides with reduced units sold and new listings. Mello-Roos usage correlates with reduced units sold and new listings, while increasing average lot sizes and square footage of new developments. Square footage increases follow a distinctive dual-peaked pattern at both close and far distances from the central business district. These findings suggest that infrastructure financing mechanisms may offer an underexplored pathway to housing supply expansion through larger-scale suburban development.
Abstract: Place-based policies have become increasingly popular tools for economic development, yet the broader literature finds mixed results, with most interventions producing weak or null effects. A notable exception is Round I of the Federal Empowerment Zone (FEZ) program, which delivered some of the strongest short-run evidence on program effectiveness documented in this literature. Whether these results persist or can be replicated remains unclear.
This paper provides the first long-run evaluation of the FEZ program, covering over 25 years across three implementation rounds. The findings show that Round I generated sustained improvements in poverty reduction and wage income, with benefits lasting nearly three decades. In contrast, later rounds, which included reduced or zero grant funding in their incentive packages, produced predominantly null effects in both the short and long run.
No heterogeneous long-run effects within Round I are observed across areas with varying pre-policy conditions, suggesting that grant generosity may be an important factor behind the replication failure.