UCLA Luskin School of Public Affairs
Department of Urban Planning
UP 239 Special Topics in Regional and International Development
Housing Markets and Policy
Wednesdays 9:00-11:50
4357B Public Affairs Building
Professor Paavo Monkkonen
Telephone: 310-482-7733
Email: paavo@luskin.ucla.edu
Office Hours: Tuesday and Wednesday 2:00 to 4:00 or by appointment
Course Description
Urban housing markets are uniquely complicated and important. Access to decent housing is
crucial to the well-being of any society, the construction industry is an important part of the
economy, and housing is often the dominant land-use in cities. Government policy and city
planning shape the way housing markets function in a multitude of direct and indirect ways. As
the world continues to urbanize and income inequality grows, housing policy has become
increasingly important and contentious. Moreover, as the recent global financial crisis that began
in the United States crystalized, there is a deep connection between housing markets and the
global financial system, with implications that scholars still do not completely understand.
The purpose of this course is firstly to investigate the way urban housing markets work in a
general sense, and how a wide variety of government interventions in housing markets affect
affordability and access to housing, as well as their indirect impacts. We will explore examples
from multiple countries (e.g. Mexico, Hong Kong, China, Indonesia, and Thailand) to understand
how markets are shaped by different institutional, economic and cultural settings. Students will
engage in critical analysis of quantitative measures of housing markets, and carry out a research
project on a topic of their choosing.
Course Objectives
After completing this course, students should have:
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An understanding of the mechanisms that drive supply and demand in urban housing
markets;
A framework for understanding how policy and institutions shape housing markets;
Familiarity with various housing subsidy programs, including the justifications for
different policies and the myriad difficulties with their provision and administration;
An understanding of how public policy and planning efforts shape neighborhoods,
influence where people live, and how residential location affects household opportunities;
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Course Objectives (continued)
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A basic understanding of the role of government policies and incentives in the
development of housing finance systems;
An appreciation for the growing importance of mortgage-backed securities and the
globalization of housing finance and the role these instruments played in the recent
housing crisis; and
A high-quality, individual research paper on a topic of their choosing.
Course format and assignments
The course format is a combination of lectures and discussions. In the first half of the class time,
the instructor will lecture on the week’s topic. The second half of class will be a discussion in a
seminar format, so that topics of interest to students can be covered at greater length. As such,
participation by all students is important. Students will contribute to discussions in class, as well
as by submitting two discussion questions per week via the course website. These questions can
stem from the week’s readings or simply be related to the week’s topic. Participation will be
10% of the final grade.
In addition to participation, there will be two short assignments, one independent research paper
plus presentation, and a final exam. Some details below:
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Short assignment 1 (10% of final grade): Analyze the output of a hedonic regression of
housing prices in two cities in Mexico. You will be given the tables of regression
coefficients and asked to describe them and speculate on the differences between the
cities. Two to four pages (double-spaced), due in week three.
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Short assignment 2 (10% of final grade): Analyze the housing market of a city in the
United States by assessing changes in prices, population and demographics, construction
activity, and rental vs. ownership trends presented in HUD reports. Two to four pages
(double-spaced), due in week five.
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Independent research paper and presentation on a housing policy of your choice (30%
paper, 10% presentation). After choosing a housing policy to study with input from
instructor, you will carry out a review of academic literature and other writing about the
policy, and conduct at least three phone interviews with knowledgeable practitioners. In
addition, if possible, the collection and analysis of primary data on the policy is also
encouraged. Write a roughly 20 paged (double-spaced) paper on the policy, assessing
various dimensions of it, and make an eight minute presentation about your findings in
class in week nine or ten.
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Final exam (30% of final grade).
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Schedule of Course Topics
A. Housing Markets
1. Housing and housing problems
2. Housing market analysis and the four quadrant model
3. Urban land markets; accessibility and formality
B. Government intervention in housing
4. Governments and housing markets: A framework
5. Supply-side policies
6. Demand-side policies
7. New/alternative housing policies
C. Housing finance and financial crises
8. Why is housing finance so hard to get right?
9. The US housing market and the global financial crisis of 2007 in context
D. Presentations
10. Students present the results of their independent research
Readings
In addition to readings available on the internet or via email, we will cover the majority of two
books in this course, both which are available at the UCLA Bookstore at LuValle Commons.
Schwartz, Alex. 2010. Housing Policy in the United States. New York: Routledge.
DiPasquale, Denise, and William C. Wheaton. 1996. Urban Economics and Real Estate Markets.
Prentice Hall.
Week 1. Housing problems and housing studies
DiPasquale, Denise, and William C. Wheaton. 1996. Urban Economics and Real Estate Markets.
Ch. 1 & 2. (Textbook)
Schwartz, Alex. Ch. 1 & 2 (Textbook)
Abrams, Charles. 1964. Man’s Struggle for Shelter in an Urbanizing World. Ch. 1 & 2. (scans)
Davis, Mike. 2006. Planet of Slums: Urban Involution and the Informal Working Class. London:
Verso. Ch. 1 & 2. (scans)
Stone, Michael. 2005. “Housing Affordability: One-Third of a Nation Shelter Poor” in Bratt,
Rachel G. et al A Right to Housing: Foundation for a New Social Agenda. Philadelphia: Temple.
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Week 1 Optional
Engels, Frederick. 1872. The Housing Question. Pamphlet.
Burns, Leland and Leo Grebler. 1978. The Housing of Nations: Analysis and Policy in a
Comparative Framework. Ch 1 & 9 (scan)
Quigley, John and Steven Raphael. 2004. Is Housing Unaffordable? Why Isn’t It More
Affordable? The Journal of Economic Perspectives 18(1): 191-214.
Ellen, Ingrid Gould, and Margery Austin Turner. 1997. Does Neighborhood Matter? Assessing
Recent Evidence. Housing Policy Debate, 8 (4): 833-866.
Sharkey, Patrick. 2009. Neighborhoods and the Black-White Mobility Gap. New York: Pew.
Monkkonen, Paavo. 2012. Housing Finance and Increasing Socioeconomic Segregation in
Mexico. International Journal of Urban and Regional Research, 36(4): 757-772.
OECD. 2011. Housing and the economy: policies for renovation, in Going for Growth, OECD.
http://www.thisamericanlife.org/radio-archives/episode/512/house-rules
Week 2. Housing market analysis: Supply and demand of a uniquely complicated good
DiPasquale, Denise, and William C. Wheaton. 1996. Urban Economics and Real Estate Markets.
Pages 182-193 and Ch. 10. (Textbook)
Schwartz, Alex. Ch. 11 (Textbook)
Whitehead, Christine M. E. 1999. “Urban Housing Markets: Theory and Policy,” in E. S. Mills
and P. Cheshire, eds, Handbook of Regional and Urban Economics. North Holland, Elsevier
Science Direct B.V. 3. pp 1559 - 1594.
Kain, John, and Quigley, John. 1970. Measuring the Value of Housing Quality Journal of the
American Statistical Association.
One city’s Comprehensive Housing Market Analysis from HUD.
Optional
Gyourko, Joseph, Christopher Mayer, and Todd Sinai. 2006. “Superstar Cities.” NBER Working
Paper No. 12355.
Buckley, Robert and Ashna Mathema. 2007. Is Accra a Superstar City? World Bank Policy
Research Working Paper 4453.
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Week 3. Urban land markets
DiPasquale, Denise, and William C. Wheaton. 1996. Urban Economics and Real Estate Markets.
Ch. 3 & 4. (Textbook)
Dowall, David E. 1993. Establishing Urban Land Markets in the People's Republic of China.
Journal of the American Planning Association 59(2): 182-192.
Tian, Li. 2008. The Chengzhongcun Land Market in China: Boon or Bane? A Perspective on
Property Rights. International Journal of Urban and Regional Research. 32(2): 282–304.
Kok, Nils, Monkkonen, Paavo, & Quigley, John. 2014. Land Use Regulations and the Value of
Land and Housing: An Intra-Metropolitan Analysis. Journal of Urban Economics.
Gough, Katherine and Paul W.K. Yankson. 2000. Land Markets in African Cities: The Case of
Peri-urban Accra, Ghana. Urban Studies 37(13): 2485-2500.
Optional
Turner, Margery Austin and Stephen L. Ross. 2005. “How Racial Discrimination Affects the
Search for Housing” in The Geography of Opportunity, Race and Housing Choice in
Metropolitan America, Xavier de Souza Briggs, ed. Washington, DC: Brookings. (scan)
Jones, Gareth and Ward, Peter. 1998. Privatizing the commons: Reforming the ejido and urban
development in Mexico. International Journal of Urban and Regional Research 22(1): 76–93.
Mukhija, Vinit. 2014. “Outlaw In-Laws: Informal Second Units and the Stealth Reinvention of
Single Family Housing.” pp. 39-58 in Mukhija and Loukaitou-Sideris (eds.) The Informal
American City: Beyond Taco Trucks and Day Labor. MIT Press. (scan)
Monkkonen, Paavo, Kelvin SK Wong and Jaclene Begley. 2012. Economic Restructuring, Urban
Growth, and Short-term Trades: The Spatial Dynamics of the Hong Kong Housing Market,
1992-2008. Regional Science and Urban Economics, 42(3): 396-406.
Week 4. Governments and housing markets: A framework for analysis and local policy
Schwartz, Alex. Ch. 4 (Textbook)
DiPasquale, Denise, and William C. Wheaton. 1996. Urban Economics and Real Estate Markets.
Ch. 13. (Textbook)
Apgar, William. 1990. Which housing policy is best? Housing policy Debate 1(1): 1-32.
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Priemus, Hugo and Frans Dieleman. 2002. Social Housing Policy in the European Union: Past,
Present and Perspectives. Urban Studies 39(2): 191–200.
Angel, Shlomo. 2001. The Housing Policy Assessment and Its Application to Panama. Journal
of Housing Economics 10, 176–209.
Optional
Angel, Schlomo. 2000. Housing Policy Matters: A Global Analysis, Oxford University Press.
Ch. 7-11. (scan)
Quigley, John M. and Steven Raphael. 2004. Regulation and the High Cost of Housing in
California. The American Economic Review 95(2): 323-328.
Monkkonen, P. and L. Ronconi. 2013. Land-Use Regulations, Compliance and Land Markets in
Argentina. Urban Studies, 50(10): 1951-1969.
Deng, L. Q. Shen, and L. Wang. 2011. The Emerging Housing Policy Framework in China.
Journal of Planning Literature, 26(2) 168-183.
World Bank. 1993. Housing: Enabling Markets to Work. Washington, DC.
Keivani, Ramin, Mattingly, Michael, and Majedi, Hamid. 2008. Public Management of Urban
Land, Enabling Markets and Low-income Housing Provision: The Overlooked Experience of
Iran. Urban Studies 45(9): 1825-1853.
Week 5. National housing policies: The supply side
Schwartz, Alex. Ch. 6 (Textbook)
Monkkonen, Paavo. 2013. Housing Deficits as a Frame for Housing Policy: Demographic
Transition, Economic Crisis and Household Formation in Indonesia. International Journal of
Housing Policy, 13(3) 247-267.
Lee, James and Yip, Ngai Ming. 2006. Public Housing and Family Life in East Asia: Housing
History and Social Change in Hong Kong, 1953-1990. Journal of Family History 31(1): 66-82.
Galster, George. 1997. Comparing demand‐side and supply‐side housing policies: Sub‐market
and spatial perspectives. Housing Studies 12(4): 561-577.
Yates, Judith, and Christine Whitehead. 1998. In Defense of Greater Agnosticism: A Response
to Galster's 'Comparing Demand-side and Supply-side Housing Policies' Housing Studies 13(3):
415-423.
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Optional
Sim, Loo Lee, Shi Ming Yu, and Sun Sheng Han. 2003. Public housing and ethnic integration in
Singapore. 2003. Habitat International 27: 293–307.
McClure, Kirk. 2008. The LIHTC Goes Mainstream and Moves to the Suburbs. Housing Policy
Debate.
Popkin et al. 2009. Has Hope VI Transformed Residents' Lives? New Evidence from the Hope
VI Panel Study. Housing Studies.
Castells, M., Goh, L., Kwok, R.Y.W. 1990. The Shek Kip Mei Syndrome: Economic
Development and Public Housing in Hong Kong and Singapore. London: Pion. (Library)
Week 6. National housing policies: The demand side
Schwartz, Alex. Ch. 7 & 8 (Textbook)
Ferguson, Bruce and Jesus Navarette. 2003 New approaches to progressive housing in Latin
America: A key to habitat programs and policy Habitat International 27(2): 309–323.
Gilbert, Alan. 2004. Helping the poor through housing subsidies: lessons from Chile, Colombia
and South Africa. Habitat Internaitonal 28(1): 13–40.
Ch. 1 & 2 of Ward, Jimenez, and Di Virgilio (eds). 2015. Housing Policy in Latin American
Cities. Routledge. (scan)
Optional
Baum-Snow, Nathaniel. 2007. Did Highways Cause Suburbanization? The Quarterly Journal of
Economics 122(2): 775-805.
Field, Erica. 2005. Property rights and investment in urban slums. Journal of the European
Economic Association Papers and Proceedings.
Imbroscio, D. 2012. Beyond mobility: The limits of liberal urban policy. Journal of Urban
Affairs 34(1): 1–20.
Deluca, S. 2012. What is the role of housing policy? Considering choice and social science
evidence. Journal of Urban Affairs 34(1): 21–28.
Week 7. New and alternative housing policies
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Mukhija, Vinit. 2001. Enabling Slum Redevelopment in Mumbai: Policy Paradox in Practice.
Housing Studies 16(6): 791-806.
Mukhija, Vinit and Scott-Railton, John. 2014. The Importance of Design in Affordable Housing:
Lessons From Mutual Self-Help Housing in California Housing Policy Debate 23(4): 765-780.
Boonyabancha, S. 2005. Baan Mankong: going to scale with “slum” and squatter upgrading in
Thailand. Environment and Urbanization 17(1): 21-46.
Emmeus Davis, John. 2010. Origins and Evolution of the Community Land Trust in the United
States. Pp 3-47 in Davis (Ed) The Community Land Trust Reader, Lincoln Institute.
Stone, Katherine. 2010. The 30-year Prison. The New York Times. August 11.
Optional
Ballesteros, Marife and Dam Vertido. 2004. Can group credit work for housing loans? Some
evidence from CMP. PIDS Policy Notes No 2004—05, Philippine Institute for Development
Studies, Makati City.
Dolowitz, David and Marsh, David. 2000. Learning from Abroad: The Role of Policy Transfer in
Contemporary Policy-Making Governance: An International Journal of Policy and
Administration 13(1): 5–24.
Week 8. Why is housing finance so hard to get right?
Schwartz, Alex. Ch. 3 (Textbook)
DiPasquale, Denise, and William C. Wheaton. 1996. Urban Economics and Real Estate Markets.
Pages 193-212 (Textbook)
Renaud, B. 1987. Another look at housing finance in developing countries. Cities 4: 28–33.
Chiquier, Loic and Lea, Michael (Eds.) 2009. Housing Finance Policy in Emerging Markets. The
World Bank: Washington, DC. Ch 1-4.
Planet Money podcast: http://www.npr.org/blogs/money/2011/02/18/133847397/whenborrowers-dont-pay-should-the-bank-take-everything
Lowenstein, Roger. “Who Needs the Mortgage Interest Deduction?” The New York Times
Magazine, March 5, 2006.
Phillips, Matt. 2014. Most Germans don’t buy their homes, they rent. Here’s why. Quartz.
Optional
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Gabriel, Stuart A. and Stuart S. Rosenthal. 2009. “Government Sponsored Enterprises, the
Community Reinvestment Act, and Home Ownership in Targeted Neighborhoods.” In Housing
Markets and the Economy: Risk, Regulation, and Policy (Glaeser and Quigley eds). Cambridge:
Lincoln Institute of Land Policy. (scan)
Monkkonen, Paavo. 2011. The Housing Transition in Mexico: Expanding Access to Housing
Finance. Urban Affairs Review 47(5): 672-695.
Glaeser, Edward L., and Jesse M. Shapiro. 2002. The Benefits of the Home Mortgage Interest
Deduction. Cambridge: NBER.
Oswald, Andrew. 2009. The Housing Market and Europe’s Unemployment Problem. Ch. 2 in
Casper van Ewijk, Michiel van Leuvensteijn (eds) Homeownership and the Labour Market in
Europe (scan)
Week 9. The US housing market and the global financial crisis of 2007 in context
Schwartz, Alex. Ch. 12 & 13 (Textbook)
This American Life podcast: http://www.thisamericanlife.org/radio-archives/episode/355/thegiant-pool-of-money
Shiller, Robert. 2000. “Irrational Exuberance.” Princeton University Press. Ch. 7-9. (scan)
Carmen M. Reinhart, Kenneth S. Rogoff. 2008. Is the 2007 U.S. Sub-Prime Financial Crisis So
Different? An International Historical Comparison NBER Working Paper No. 13761.
Optional
Monkkonen, Paavo. 2014. The Role of Housing Finance in Mexico’s Vacancy Crisis. Working
Paper.
Quigley, John. 2001. Real Estate and the Asian Crisis. Journal of Housing Economics 10, 129–
161.
Kingsley, G. Thomas and Robin Smith, and David Price. 2009. The Impacts of Foreclosures on
Families and Communities. The Urban Institute.
Lewis, Michael. 2010. The Big Short. New York: W.W. Norton & Company. (library)
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