HISHOUSHOCK · The Long-Term Consequences of Shocks to Housing Wealth: Insights from History
Horizon 2020 — Marie Skłodowska-Curie Actions
- Duration
- 2022-01-01 → 2024-06-30
- EU contribution
- €211,736
- Participants
- 2
- Scheme
- MSCA-IF
Lines connect the coordinator with its partners.
Results in brief
The Long-Term Consequences of Shocks to Housing Wealth: Insights from History
Climbing the housing ladder is the most important way for households to accumulate wealth, but households differ significantly in their access to housing. The goal of this project was to investigate the effect of shocks to housing values on the wealth and homeownership of individuals and their neighborhoods, focusing particularly on the long term. Measuring the impact of such shocks is difficult because differences in housing wealth and housing values are typically closely related to economic trends and the individual choices of households, making it difficult to identify variation in housing wealth that is unrelated to the property or its owner. The limited availability of long-term data on the wealth of individuals further constrains the possibility of studying long-term effects. In this project, I overcome these issues by going back into the past. I propose a set of studies, specifically in the context of historical Amsterdam, that exploit shocks to housing wealth to investigate their impact over the long run. The particular institutional setting of Amsterdam allows me to isolate changes in house prices or access to housing wealth that are unrelated to individuals or economic conditions, and whose effects can be traced using extensive recently digitized archival records. The first study examines how demographic changes affect house prices over the very long term and how this relates to entry and exit out of homeownership. In the second study, I investigate how tax-driven losses and gains in housing wealth affect the income and wealth of individuals and their offspring. The third study moves to a modern context and investigates how investor-ownership vs. homeownership affects the composition of neighborhoods and local housing costs. The project was hosted by the Erasmus School of Economics and Columbia Business School, making use of world-leading knowledge and training in real estate and financial history.
Data: CORDIS, © European Union
Project objective
Climbing the housing ladder is the most important way for households to accumulate wealth, but households differ significantly in their access to housing wealth and the housing returns they realize. The goal of this project is to investigate the long-term impact of shocks to housing values on the wealth of individuals and their neighborhoods. Measuring the impact of such shocks is difficult, because differences in housing wealth and housing values are typically closely related to economic trends and the individual choices of households, making it difficult to identify variation in housing wealth that is unrelated to the property or its owner. The limited availability of long-term data on the wealth of individuals further constrains the possibility to study long-term effects. The solution I take in this project is to go back into the past. I propose a set of three studies in the context of historical Amsterdam that exploit shocks to housing wealth to investigate their impact over the long run. The particular institutional setting of Amsterdam in the 18th and 20th centuries allows me to isolate changes in housing wealth or access to housing wealth that are unrelated to individuals or economic conditions, and whose effects can be traced using extensive recently-digitized archival records.The first study examines how the level of house prices when individuals enter their home-buying years affects their lifetime wealth accumulation. In the second study, I investigate how tax-driven losses and gains in housing wealth affect the income and wealth of individuals and their offspring. In the final study, I take the house as a unit of observation and investigate how shocks to property- and neighborhood-level housing returns affect long-term housing values. The proposed project will be hosted by the Erasmus School of Economics and Columbia Business School, making use of world-leading knowledge and training in real estate and financial history.
Original text from CORDIS.
Participants
- ERASMUS UNIVERSITEIT ROTTERDAM · RotterdamCoordinatorNetherlands
- TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK · New YorkUnited States
Links
Data: CORDIS, © European Union