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  5. Neighborhoods and Urban Dynamics (1)
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Neighborhoods and Urban Dynamics (1)

Paper Session

Friday, Jan. 3, 2025 8:00 AM - 10:00 AM (PST)

San Francisco Marriott Marquis, Nob Hill B
Hosted By: American Real Estate and Urban Economics Association
  • Chair: Yiwen (Xavier) Kuai, Fannie Mae

Immigrants and Native Flight: Geographic Extent and Heterogeneous Preferences

Bence Boje-Kovacs
,
Aalborg University
Ismir Mulalic
,
Copenhagen Business School
Albert Saiz
,
Massachusetts Institute of Technology
Vinicios Sant'Anna
,
Massachusetts Institute of Technology
Marie Louise Schultz-Nielsen
,
ROCKWOOL Foundation Research

Abstract

Is ethnic residential segregation in Europe driven by native flight or by immigrants' preferences? If the former, which natives avoid immigrants? And what is the geographic extent of such homophilic residential preferences? Using a matched panel dataset containing the universe of individuals and residential properties in Denmark from 1987 through 2017, and using experimental variation on immigrant arrival and diffusion, we conclusively show that the presence of immigrants induces native flight, even in a country with relatively tolerant attitudes. Immigrant concentrations both at the neighborhood level and within building complexes additively impact native behavior. Native flight is stronger for the old and is mostly a reaction to the arrival of low-income immigrants. As neighborhoods become more immigrant-dense, future move-ins are more likely to be other immigrants or young, low-income Danish citizens without children. Additionally, the concentration of non-Western immigrants has a negative effect on housing prices.

The Variety of Nontradable Consumption Amenities and Local Firm Productivity: Evidence from Restaurants

Rui Du
,
Oklahoma State University

Abstract

Understanding the relationship between local nontradable amenities and productivity has traditionally relied on cross-city analyses and has focused on the quantity of amenities. This paper investigates the causal impact of nearby diverse nontradable amenities, particularly restaurant variety, on firms’ total factor productivity (TFP) in Beijing. We propose an instrument variable strategy for causal inference based on China's prevailing presale housing system. Our findings uncover a 4.9% increase in firm-level TFP associated with a one-standard-deviation rise in restaurant variety in firms' immediate vicinity. The main channels at work include increased face-to-face interactions, a more skilled workforce, improved employee well-being, and heightened innovation intensity. The effects are notably larger for non-state-owned enterprises, labor-intensive firms, and firms with high commuting costs. Our findings highlight the crucial role of local consumption amenity diversity in determining urban productivity, even at fine spatial scales.

Urban Sprawl and Residential Carbon Emissions: Evidence from Indonesian Cities

Yao Wang
,
Ohio State University
Alexander Rothenberg
,
Syracuse University
Taylor Lathrop
,
Syracuse University

Abstract

This paper uses detailed data from Indonesian cities to study how variation in density within ur- ban areas affects residential carbon emissions. To address simultaneity, we instrument density with soil characteristics, and to address sorting, we control for community averages of observed character- istics. Preliminary results suggest that while density is positively associated with greater residential carbon emissions, this correlation is driven by income sorting. This suggests that policies aiming to control urban sprawl may not be successful in reducing residential carbon emissions.

Unequal Access to Affordability: Exclusionary Condominium and Cooperatives in New York City

Yuwen Ji
,
University of Wisconsin-Madison

Abstract

This paper investigates the impact of condominium associations and cooperative boards (HOA) on residential sorting and racial segregation in New York City. I construct a novel HOA Screening Index measuring the degree of HOA control and selection over their prospective close neighbors, based on textual data on HOA boards requirement and policies. In the reduced form patterns, I document that black, hispanic and asian condo/coop buyers are less likely to get access to properties with stringent HOA screening policies. To pass the financial screen, minorities are 15% more likely to purchase by cash and need to earn 10% higher income than white owners. The racial disparities can be traced back to historical exclusionary institutions, delineated using redlining maps. I develop a residential location choice model that incorporates rich heterogeneity to disentangle the income/wealth and racial segregation effect of HOA. The model shows that HOA screening policies intensify income and wealth sorting, disproportionately affecting minorities with a more pronounced distortion effect.

Discussant(s)
Gary Painter
,
University of Cincinnati
Yichen Su
,
Southern Methodist University
Nitzan Tzur-Ilan
,
Federal Reserve Bank of Dallas
Ron Cheung
,
Oberlin College
JEL Classifications
  • R0 - General