City-wide Effects of New Housing Supply: Evidence from Moving Chains
VATT Institute for Economic Research Working Papers 146
24 Pages Posted: 24 Sep 2021
Date Written: August 31, 2021
We study the city-wide effects of new, centrally-located market-rate supply using geo-coded total population register data from the Helsinki Metropolitan Area. The supply of new market rate units triggers moving chains that quickly reach middle- and low-income neighborhoods and individuals. Thus, new market-rate construction loosens the housing market in middle- and low-income areas even in the short run. Market-rate supply is likely to improve affordability outside the sub-markets where new construction occurs and to benefit low-income people.
Keywords: Housing supply, Housing affordability, Filtering
JEL Classification: R31, R21, R23
Suggested Citation: Suggested Citation