Patrick Power PRO
Economics PhD @ Boston University
A Class Presentation of
When the interior space is no more than 25-30 feet from an open window
Windows that don't open
Buildings with larger floor plates
Conversions are easiest in older, lower-quality and mostly empty buildings with small floors. But less than 1% of office space in the biggest U.S. cities ticks those boxes, according to Avison Young
"That’s in part because in New York and many other markets, it’s hard to cover the costs of conversion while producing housing affordable to middle-class or lower-income residents."
Motivation for the Paper Today
The twin problems of too much unwanted office space and not enough housing
Calgary
Unlike many conversion programs in the U.S., Calgary’s plan has no major strings attached, such as an affordable-housing requirement
Deep pockets are also important, because Calgary doesn’t pay the subsidy until the project is finished.
Under the plan—the most generous in the country—the city will provide $150 million to property developers to convert four buildings in the heart of the business district to more than 1,000 apartments, as long as about one-third are set aside as affordable units
Chicago
"It appears that a short series of moves connects new construction and low-income areas"
- Mast
Quantity
Price
Supply
Demand
Census Tract Income Decile: 10
Quantity
Price
Supply
Demand
Census Tract Income Decile: 20
Quantity
Price
Supply
Demand
Census Tract Income Decile: 30
Quantity
Price
Supply
Demand
Census Tract Income Decile: 40
Quantity
Price
Supply
Demand
Census Tract Income Decile: 50
The Jacobian of Housing Supply
Housing Income Deciles
The Jacobian of Housing Supply
Findings
Pushback?
>> We want to average over all possible new buildings
Sequence of Thoughts
Time
Current
Previous
Current
Current
Previous
New Building
May 2012
August 2012
December 2012
Classification of New Buildings
Time
Current
All Current
All Current
The majority of "local" movers are from higher income neighborhoods
Single Period Housing Transition Dynamics
Main Empirical Result
A
B
C
More General Empirical Result
"I thus classify units based on their census tract characteristics, as measured in the 2013-2017 American Community Survey (ACS)"
Census Tract
Core-Based Statistical Areas (CBSAs)
"I include twelve large Core-Based Statistical Areas (CBSAs) with well-defined city centers: New York City, Chicago, Dallas, Houston, Washington, Philadelphia, Atlanta, Boston, San Francisco/Oakland, Denver, Seattle, and Minneapolis."
By Patrick Power