YORK UNIVERSITY
Faculty of LA&PS / Dept. of Economics
AP/ ECON 4279 3.0 M
HOUSING ECONOMICS
Winter Term, 2013
Instructor:
Professor George Fallis
1048 Vari Hall
(416) 736-2100 ext. 77027
gfallis@yorku.ca
Office Hours: Monday 1:30 - 3:00 pm; or by appointment.
Class Time and Place: Monday and Wednesday 11:30-1:00 pm CC - 211
Course Description:
The course examines housing markets, housing finance, and government housing policy
using the tools of microeconomics. Models of demand, supply, and market equilibrium
are developed emphasizing the specific characteristics of housing: its heterogeneity, its
durability, and its spatial fixity. Welfare economics and public choice theory are used in
the study of government housing programs. Canadian housing policies and their effects
are studied. Also, the role of housing finance in the financial crisis of 2008/09 will be
examined. Some time will be given to discussion of techniques of writing.
Prerequisites: AP/ECON 2300 3.0/2350 3.0, or equivalents; or permission of the
instructor.
Evaluation: Term Test
Essay
Final Exam
20% (Wednesday, February 27, in class)
40% (due Wednesday, April 3, second last class)
40% (during exam period, April 10-26)
This course may be used in satisfying the writing requirement for a
BA Honours Economics degree.
Readings:
Most of the readings are contained in a course kit available in the bookstore. This will be
supplemented by material handed out in class and by material available on the Web. It is
expected that students will become familiar with the journal literature of housing
economics and the principal Canadian data sources.
It is highly recommended the students purchase a guide to writing, if they do not
already have one; there are many available and none is specifically recommended. The
instructor will use Northey, M. 2002. Making Sense: A Student’s Guide to Research and
Writing. Toronto: Oxford University Press.
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Course Outline
1. Introduction
2. Models of the Housing market
2.1 Standard Commodity Model
2.2 Spatial Model
2.3 Dealing with Durability and Heterogeneity
3. Housing Finance
4. Housing Policy in Canada
5. The Effects of Housing Programs
6. The Economic Rationale for Government Housing Programs
7. Housing Finance and the 2008/09 Financial Crisis
Academic Honesty:
A central purpose of the University is to teach students to think independently,
analytically, and critically. Conduct that violates the ethical or legal standards of the
University community or of one’s progam or specialization is subject to severe penalties.
Students are responsible for understanding the nature and consequences of these offences,
as contained in the Senate Policy on Academic Honesty, found on the York University
Senate WEB page:
http://www.yorku.ca/secretariat/policies/document.php?document=69
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Readings
1. Introduction
Chapter 1. (kit).
CMHC. 2011. Canadian Housing Observer 2011. Ottawa: Canada Mortgage and
Housing Corporation. (pp. 1-16; 89-91).
2. Models of the Housing market
CMHC. 2011. Op. cit. (pp. 43-75).
Chapter 2, 3, and 4 (kit).
Hulchanski, David. 2010. The Three Cities Within Toronto: Income Polarization Among
Toronto’s Neighbourhoods, 1970-2005. Available at:
www.urbancentre.utoronto.ca/pdfs/tnrn/Three-Cities-Within-Toronto-2010-Final.pdf
3. Housing Finance
Chapter 5. (kit).
CMHC. 2011. Op. cit. (pp. 17-42).
4. Housing Policy in Canada
Chapter 9. (kit).
TD Economics. 2003. Affordable Housing in Canada: In Search of a New Paradigm.
Toronto: TD Economics. (kit).
Fallis, George. 2010. “Progressive Housing Policy in the 21st Century: A Contrarian
View.” (kit). Also, Journal of Sociology and Social Welfare, Vol. XXXVII, No. 4,
pp.173-199.
CMHC. 2011. Op. cit. (pp. 127-142).
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5. The Effects of Housing Programs
Chapter 10. (kit).
6. The Economic Rationale for Government Housing Programs
Chapters 6, 7, and 8. (kit).
7. Housing Finance and the Financial Crisis of 2008/09
Krugman, Paul. 2009. “Chapter 1: The Central Problem Has Been Solved,” in Krugman,
Paul, The Return of Depression Economics and the Crisis of 2008. New York: W.W.
Norton & Company. (pp. 9-29). (kit).
Shiller, Robert J. 2009. “Chapter 1: Introduction,” and “Chapter 2: Housing in History,”
in Shiller, Robert J. The Subprime Solution: How Today’s Global Financial Crisis
Happened and What to Do About It. Princeton: Princeton University Press. (pp. 1-38).
(kit).
Himmelberg, Charles, Christopher Mayer, and Todd Sinai. 2005. “Assessing High House
Prices: Bubbles, Fundamentals, and Misperceptions.” Journal of Economic Perspectives,
Vol. 19, No. 4, Fall, pp. 67-92. (kit).
McDonald, John F. and Daniel P. McMillen. 2011. “Chapter 9: Real Estate Law and
Institutions,” in McDonald, John F. and Daniel P. McMillen. Urban Economics and Real
Estate: Theory and Policy, 2nd edition. Hoboken, NJ: John Wiley & Sons, Inc. (pp. 161181).
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Additional Material
Primary sources of data on households, housing, and cities are Statistics Canada, see
www.statcan.ca , and Canada Mortgage and Housing Corporation, see www.cmhc.ca .
The TD Bank Financial Group published a series of influential monographs on Canadian
cities, the GTA (Greater Toronto Area) and housing, see www.td.com.economics . The
Greater Toronto CivicAction Alliance (formerly the Toronto City Summit Alliance) is a
coalition civic leaders from the private, labour, voluntary, and public sectors in the
Toronto region. The Alliance seeks to promote a new policy toward cities, see
www.civicaction.ca. The Cities Centre (formerly the Centre for Urban and Community
Studies) at the University of Toronto maintains an e-library on urban and housing issues,
see www.urbancentre.utoronto.ca/elibrary.htm . A good source on housing economics
and policy is R. K. Green and S. Malpezzi. 2003.
A Primer on U.S. Housing Markets and Housing Policy. Washington: The Urban
Institute Press (AREUEA Monograph Series No. 3). A recent collection of essays, which
provides an excellent overview of the field, is O’Sullivan, T. and K. Gibb, eds. 2003.
Housing Economics and Public Policy. Essays in honour of Duncan Maclennan. Oxford:
Blackwell Science.
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