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The effect of local housing ordinances

Author

Listed:
  • Thomas J. Fitzpatrick
  • Lisa Nelson
  • Francisca Richter
  • Stephan D. Whitaker

Abstract

The housing and economic crises have exerted a strong and lingering impact on housing markets across the nation. In this paper, we assess the degree to which local anti-blight policies have infl uenced housing market outcomes following the crises. The analysis is performed for cities in Cuyahoga County, Ohio. We measure outcomes that characterize market distress and that may be influenced by local housing ordinances including foreclosure, bulk sales, flipping, vacancy, and tax delinquency. Using matching procedures on linked data containing property, loan, and transaction characteristics, we compare outcomes across properties in regulated and unregulated municipalities. Point of sale inspections and vacancy registrations both decrease the probability that homes are flipped (resold within two years). We find that point of sale inspections are positively associated with foreclosures, property tax delinquency, and sales prices below the tax assessed value. The inspections may be revealing the need for expensive repairs in some homes, which could push borrowers underwater and into foreclosure. We find evidence that vacancy registration requirements do lower vacancy. The discussion around policies for housing market recovery, for the most part, has addressed efforts at the federal level. This analysis integrates in discussion of efforts and policies arising at the local level.

Suggested Citation

  • Thomas J. Fitzpatrick & Lisa Nelson & Francisca Richter & Stephan D. Whitaker, 2012. "The effect of local housing ordinances," Working Papers (Old Series) 12-40, Federal Reserve Bank of Cleveland.
  • Handle: RePEc:fip:fedcwp:1240
    DOI: 10.26509/frbc-wp-201240
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    References listed on IDEAS

    as
    1. Thomas J. Fitzpatrick & Stephan D. Whitaker, 2012. "Overvaluing residential properties and the growing glut of REO," Economic Commentary, Federal Reserve Bank of Cleveland, issue Mar.
    2. Stephan D. Whitaker, 2011. "Foreclosure-related vacancy rates," Economic Commentary, Federal Reserve Bank of Cleveland, issue July.
    3. Thomas J. Fitzpatrick & Stephan D. Whitaker, 2012. "The impact of vacant, tax-delinquent, and foreclosed property on sales prices of neighboring homes," Working Papers (Old Series) 1123, Federal Reserve Bank of Cleveland.
    4. Edwin Leuven & Barbara Sianesi, 2003. "PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing," Statistical Software Components S432001, Boston College Department of Economics, revised 01 Feb 2018.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Land use; Housing policy; Housing;
    All these keywords.

    JEL classification:

    • K30 - Law and Economics - - Other Substantive Areas of Law - - - General
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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