Real Estate Market Response to Enhanced Building Codes in Moore, OK

27 Pages Posted: 4 May 2017

See all articles by Kevin M. Simmons

Kevin M. Simmons

Austin College - Department of Economics

Paul Kovacs

Independent

Date Written: May 1, 2017

Abstract

Moore, OK, suffered 3 violent tornadoes from 1999-2013, the most recent causing $3 billion in damage and 24 fatalities. In response the city took the rare step of enhancing their building code based on wind engineering principles. To meet the new code, the Moore Association of Home Builders estimated an added cost of $1.00 per square foot but realized costs are closer to $2.00. Economic theory suggests that an isolated regulatory action will shift production to areas without the added cost, reducing quantity supplied of homes in Moore and potentially driving up price. We use a difference in difference regression model to compare the effect of the new code using Multiple Listing Services (MLS) data from Moore and an adjoining town, Norman, to examine the market impact of the new code. Our result show the code had no effect on either home sales or price per square foot for new homes in Moore.

Suggested Citation

Simmons, Kevin M. and Kovacs, Paul, Real Estate Market Response to Enhanced Building Codes in Moore, OK (May 1, 2017). Available at SSRN: https://ssrn.com/abstract=2963220 or http://dx.doi.org/10.2139/ssrn.2963220

Kevin M. Simmons (Contact Author)

Austin College - Department of Economics ( email )

900 N. Grand, Suite 61591
Sherman, TX 75090-4400
United States
903-813-2341 (Phone)

Paul Kovacs

Independent

No Address Available

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