Postwar Housing and Neighborhood Status

Many postwar neighborhood across the United States are exhibiting signs of decline previously only observed in older central cities. With the characteristics of postwar housing being arguably undesirable by current standards, extant literature claims this functional obsolescence is contributing to levels of distress and decline. What remains unclear is whether the effect observed is due to housing age  postwar housing is vulnerable to physical depreciation given its age – or if there is a true postwar vintage effect influencing household sorting beyond what age alone would predict. Such a distinction between age and vintage has not yet been operationalized at the neighborhood level within the literature. Using a panel model spanning 1990 to 2010, I show neighborhood level household income sorting within a metropolitan area is predominately associated with the aging of housing within the neighborhood and not the amount of postwar housing that exists. However, heterogeneous effects exist when looking across metropolitan areas that face variation in new housing supply growth and demand. More postwar housing within a given neighborhood is associated with lower levels of income in metropolitan areas with high housing supply growth and low prices (e.g. Atlanta). Conversely, in metropolitan areas with restricted new supply and high prices (e.g. Washington D.C.), more postwar housing within a given neighborhood is associated with higher levels of income. These results have implications for housing policy targeting aging homes.

SSRN Working Paper

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