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

47 Pages Posted: 19 Aug 2020 Last revised: 25 Jan 2021

See all articles by Sitian Liu

Sitian Liu

Queen's University - Department of Economics

Yichen Su

Southern Methodist University (SMU) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August, 2020

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 reduced demand for housing in neighborhoods with high population density. The reduced demand for density is driven partially by the diminished need of living close to jobs that are telework-compatible and the declining value of access to consumption amenities. Neighborhoods with high pre-COVID-19 home prices also see a greater drop in housing demand. While the national housing market recovered after June, we show that the pandemic's negative effect on the demand for density persisted and strengthened, indicating that the change in the demand for density has lasted 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 (August, 2020). FRB of Dallas Working Paper No. 2024, Available at SSRN: https://ssrn.com/abstract=3676669 or http://dx.doi.org/10.24149/wp2024r1

Sitian Liu (Contact Author)

Queen's University - Department of Economics ( email )

94 University Avenue
Kingston, Ontario K7L 3N6
Canada

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

Yichen Su

Southern Methodist University (SMU) - Department of Economics ( email )

Dallas, TX 75275
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
88
Abstract Views
626
Rank
30,216
PlumX Metrics