The Impact of the COVID-19 Pandemic on the Demand for Density: Evidence from the U.S. Housing Market

53 Pages Posted: 3 Aug 2020 Last revised: 14 Jan 2021

See all articles by Sitian Liu

Sitian Liu

Queen's University - Department of Economics

Yichen Su

Federal Reserve Bank of Dallas

Multiple version iconThere are 2 versions of this paper

Date Written: January 10, 2021

Abstract

Cities are shaped by the strength of agglomeration and dispersion forces. We show that the COVID-19 pandemic has re-introduced disease transmission as a dispersion force in modern cities. We use detailed housing data to study the impact of the COVID-19 pandemic on the location demand for housing. We find that the pandemic has led to a sudden shift of housing demand away from neighborhoods with high population density. The reduced demand for density is driven partially by the diminished need of living close to telework-compatible jobs and the declining value of access to consumption amenities. Neighborhoods with high pre-COVID-19 home value also see a greater drop in housing demand. While the national housing market recovered after the initial dip, we show that the pandemic's negative effect on the demand for density persisted and strengthened, indicating that the reduction in the demand for density has persisted beyond an aggregate recovery of housing demand.

Keywords: COVID-19, Pandemic, Density, City, Neighborhood, Housing, Location, Telework, Amenity

JEL Classification: R2, R3, I1

Suggested Citation

Liu, Sitian and Su, Yichen, The Impact of the COVID-19 Pandemic on the Demand for Density: Evidence from the U.S. Housing Market (January 10, 2021). Available at SSRN: https://ssrn.com/abstract=3661052 or http://dx.doi.org/10.2139/ssrn.3661052

Sitian Liu

Queen's University - Department of Economics ( email )

94 University Avenue
Kingston, Ontario K7L 3N6
Canada

HOME PAGE: http://www.sitian-liu.com

Yichen Su (Contact Author)

Federal Reserve Bank of Dallas ( email )

2200 North Pearl Street
PO Box 655906
Dallas, TX 75265-5906
United States

HOME PAGE: http://https://sites.google.com/site/yichensu89/

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
302
Abstract Views
1,590
rank
100,987
PlumX Metrics