Evidence and Innovation in Housing Law and Policy

https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press evidence and innovation in housing law and policy No area of law and policy is more central to our well-being than housing, yet research on the topic is too often produced in disciplinary or methodological silos that fail to connect to policy on the ground This pathbreaking book, which features leading scholars from a range of academic fields, cuts across disciplines to forge new connections in the discourse In accessible prose filled with cutting-edge ideas, these scholars address topics ranging from the recent financial crisis to discrimination and gentrification and show how housing law and policy impacts household wealth, financial markets, urban landscapes, and local communities Together, they harness evidence and theory to capture the “state of play” in housing, generating insights that will be relevant to academics and policy makers alike This title is also available as Open Access on Cambridge Core at http://dx.doi.org/10.1017/9781316691335 Lee Anne Fennell is Max Pam Professor of Law and the co-director of the Kreisman Initiative on Housing Law and Policy at the University of Chicago Law School Her teaching and research interests include property, torts, land use, housing, social welfare law, state and local government law, and public finance She is the author of The Unbounded Home: Property Values Beyond Property Lines (2009) Benjamin J Keys is an assistant professor of real estate at the Wharton School at the University of Pennsylvania and a Faculty Research Fellow of the National Bureau of Economic Research He previously served as co-director of the Kreisman Initiative while an assistant professor at the Harris School of Public Policy at the University of Chicago Keys’s research interests include connections between mortgage finance, household finance, and macroeconomics His work has been published in academic journals such as the American Economic Review and the Quarterly Journal of Economics https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press Evidence and Innovation in Housing Law and Policy Edited by LEE ANNE FENNELL University of Chicago Law School BENJAMIN J KEYS Wharton School, University of Pennsylvania https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press University Printing House, Cambridge cb2 8b s , United Kingdom One Liberty Plaza, 20th Floor, New York, ny 10006, USA 477 Williamstown Road, Port Melbourne, vi c 3207, Australia 4843/24, 2nd Floor, Ansari Road, Daryaganj, Delhi – 110002, India 79 Anson Road, #06–04/06, Singapore 079906 Cambridge University Press is part of the University of Cambridge It furthers the University’s mission by disseminating knowledge in the pursuit of education, learning, and research at the highest international levels of excellence www.cambridge.org Information on this title: www.cambridge.org/9781107164925 d o i : 10.1017/9781316691335 © Cambridge University Press 2017 This work is in copyright It is subject to statutory exceptions and to the provisions of relevant licensing agreements; with the exception of the Creative Commons version the link for which is provided below, no reproduction of any part of this work may take place without the written permission of Cambridge University Press An online version of this work is published at [http://dx.doi.org/10.1017/9781316691335] under a Creative Commons Open Access license CC-BY-NC-ND 4.0 which permits re-use, distribution and reproduction in any medium for non-commercial purposes providing appropriate credit to the original work is given You may not distribute derivative works without permission To view a copy of this license, visit https:// creativecommons.org/licenses/by-nc-nd/4.0 All versions of this work may contain content reproduced under license from third parties Permission to reproduce this third-party content must be obtained from these third-parties directly When citing this work, please include a reference to the DOI 10.1017/9781316691335 This publication is in copyright Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press First published 2017 Printed in the United States of America by Sheridan Books, Inc A catalogue record for this publication is available from the British Library Library of Congress Cataloging-in-Publication Data Fennell, Lee Anne, editor | Keys, Benjamin J., editor T I T L E : Evidence and innovation in housing law and policy / edited by Lee Anne Fennell, Benjamin J Keys D E S C R I P T I O N : Cambridge [UK] ; New York : Cambridge University Press, 2017 I D E N T I F I E R S : L C C N 2017020504 | I S B N 9781107164925 (hardback) S U B J E C T S : L C S H : Housing – Law and legislation | Housing policy | B I S A C : L A W / General C L A S S I F I C A T I O N : L C C K 3550 E 95 2017 | D D C 344/.063635–dc23 LC record available at https://lccn.loc.gov/2017020504 NAMES: i s bn 978-1-107-16492-5 Hardback Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication and does not guarantee that any content on such websites is, or will remain, accurate or appropriate https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press Contents page vii List of Figures viii List of Tables x List of Contributors xiv Acknowledgments Introduction Lee Anne Fennell and Benjamin J Keys part i housing and the metropolis: law and policy perspectives The Rise of the Homevoters: How the Growth Machine Was Subverted by OPEC and Earth Day William A Fischel 11 13 How Land Use Law Impedes Transportation Innovation David Schleicher 38 The Unassailable Case against Affordable Housing Mandates Richard A Epstein 64 part ii housing as community: stability, change, and perceptions Balancing the Costs and Benefits of Historic Preservation Ingrid Gould Ellen and Brian J McCabe Historic Preservation and Its Even Less Authentic Alternative Lior Jacob Strahilevitz v https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press 85 87 108 vi Contents Losing My Religion: Church Condo Conversions and Neighborhood Change Georgette Chapman Phillips How Housing Dynamics Shape Neighborhood Perceptions Matthew Desmond part iii housing as wealth building: consumers and housing finance 132 151 175 Behavioral Leasing: Renter Equity as an Intermediate Housing Form Stephanie M Stern 177 Housing, Mortgages, and Retirement Christopher J Mayer 203 The Rise and (Potential) Fall of Disparate Impact Lending Litigation Ian Ayres, Gary Klein, and Jeffrey West 231 10 part iv 11 housing and the financial system: risks and returns Household Debt and Defaults from 2000 to 2010: The Credit Supply View Atif Mian and Amir Sufi 12 Representations and Warranties: Why They Did Not Stop the Crisis Patricia A McCoy and Susan Wachter 13 When the Invisible Hand Isn’t a Firm Hand: Disciplining Markets That Won’t Discipline Themselves Raphael W Bostic and Anthony W Orlando https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press 255 257 289 322 Figures 1.1 Ngram for “jitney, motor truck, zoning” 1.2 Ngram for “growth management, NIMBY, exclusionary zoning” 1.3 Ngram for “farmland preservation, gated communities, historic districts” 1.4 Ngram for “housing prices, stock market prices” 4.1 New York City Historic Districts and Extensions Added, by Decade 4.2 Count and Percent of City Lots in Historic District, by Year 4.3 Average Household Income (in Thousands) for Census Tracts by Historic District Coverage, 2012 7.1 Perceived Neighborhood Trust and Suffering by Reasons for Moving, Housing Search Strategies, and Housing Problems 9.1 Total Debt Balance by Age of Borrower 9.2 Median Net Worth in 2011 9.3 Homeownership Rate for Elderly Households, 60–74 Years Old 9.4 Percent of Homeowners with a Mortgage Aged 60–69 with More Mortgage Debt than Financial Assets 9.5 Late Retirement Expectations vs Actual Retirement Age 11.1 Aggregate Household Debt and Defaults 11.2 Characteristics of Marginal Borrowers 11.3 Homeownership Increased from 2002 to 2005 11.4 Number of Owner-Occupied Transactions, ZIP Code–Level Evidence 11.5 Low Credit–Score Individuals Experienced Largest Growth in Debt 11.6 Increase in the Level of Debt, by Credit Score 11.7 Default Rate, by 1997 Credit Score 11.8 Total Defaults and Foreclosures, by 1997 Credit Score 12.1 Market Share in Dollars of Nontraditional Mortgage Products and Private Label Securitization, 2000–2012 12.2 Origination Shares by Mortgage Type, 2000–2012 12.3 Market Share by Lender Type, 1995–2014 12.4 FICO Credit Scores on New Prime Purchase Mortgages from 2003 to 2013 vii https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press page 15 16 16 17 90 91 101 160 204 204 205 214 225 258 261 263 265 267 275 277 277 292 292 303 304 Tables 4.1 Percent of Borough and New York City Lots and Lot Area Regulated by the Landmarks Preservation Commission, 2014 page 91 4.2 Differences between a Historic District Lot and a Non-historic District Lot 96 4.3 Probability of 2007 Residential Soft Site Receiving a New Building, 2008–2014 96 7.1 Weighted Summary Statistics 158 7.2 Logistic and Negative Binomial Regression Models Estimating Neighborhood Perceptions 162 7.3 Fixed Effects Models with Alternative Neighborhood Controls 164 7.4 Propensity Score Matching Estimates, Average Treatment Effects 165 9.1 Percent of Households with No Mortgage by Age 208 9.2 Homeownership Rate by Age 209 9.3 Percent with Housing Payments by Age 209 9.4 Real Mortgage Amount (2013$) by Age among Homeowners with a Mortgage 210 9.5 Mean Loan-to-Value (LTV) Ratio among Homeowners with a Mortgage 211 9.6 Home Equity (Real 2013$) among All Homeowners 211 9.7 Mortgage Debt 214 9.8 Home Equity vs Financial Assets, AHEAD Sample (respondents aged 70+ in 1993 who died prior to 2012) 216 9.9 Home Equity vs Financial Assets, HRS Sample (respondents aged 53–63 in 1994 who died prior to 2012) 219 9.10 Determinants of Assets in Last Year Observed, HRS Sample (respondents aged 53–63 in 1994 who died prior to 2012); AHEAD Sample (respondents aged 70+ in 1993 who died prior to 2012) 221 10.1 Summary of Disparate Impact and Monetary Relief 236 10.2 Mean Annual Percentage Rate (APR) by Race and Credit Score, 2001–2007 237 10.3 Effect of Race on APR (Basis Points) Using Regressions Estimated on All Loans 238 viii https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press ... cutting-edge interdisciplinary work on housing and housing finance from leading scholars in law, economics, and policy The pieces individually and collectively showcase how research and policy. ..https://doi.org/10.1017/CBO9781316691335 Published online by Cambridge University Press evidence and innovation in housing law and policy No area of law and policy is more central to our well-being than housing, yet research on... of Law and the co-director of the Kreisman Initiative on Housing Law and Policy at the University of Chicago Law School Her teaching and research interests include property, torts, land use, housing,