Teardowns, Popups, and Renovations: How Does Housing Supply Adjust?

41 Pages Posted: 31 Aug 2018

Date Written: August 24, 2018


Cities grow in layers over time. As population and land values increase, older, smaller buildings are replaced with higher density, higher value structures. However, direct costs of redevelopment and institutional barriers such as zoning may constrain replacement of older structures, leading to alternate forms of supply adjustment. In this paper, I use data on building permits in Washington DC to examine three different forms of residential investment: new construction, expansion of existing structures, and renovation. Results suggest that new construction accounts for a relatively small part of residential investment and is highly concentrated in a few neighborhoods. Expansions and alterations of existing structures are more frequent and more evenly dispersed across space. Additions and alterations are more prevalent in neighborhoods with high property values and older housing. The location of new construction is more idiosyncratic.

Keywords: Housing supply, land values, zoning, local government, construction

JEL Classification: H7, L74, O18, R1, R3, R5

Suggested Citation

Schuetz, Jenny, Teardowns, Popups, and Renovations: How Does Housing Supply Adjust? (August 24, 2018). Available at SSRN: https://ssrn.com/abstract=3238213 or http://dx.doi.org/10.2139/ssrn.3238213

Jenny Schuetz (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

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