Ep 33: Housing Transfer Taxes with Tuukka Saarimaa

09/07/22 • 57 min

In recent years, many cities have turned to real estate transfer taxes to capture a share of price appreciation and generate revenues for public purposes. Transfer taxes are relatively popular with voters, and they are easy to collect, but they also have disadvantages compared to property taxes and land value taxes. (Shane has also endorsed higher, more progressive transfer taxes in Los Angeles.) Professor Tuukka Saarimaa joins us to discuss one such drawback from his research in Helsinki, Finland: by increasing the cost of moving, transfer taxes may reduce household mobility, making it less likely that people will live in the housing best suited to their needs. But while imposing taxes can discourage socially beneficial activities, spending them can also improve people’s lives, and we consider how this balance is met with housing transfer taxes in particular.

Show notes:

Eerola, E., Harjunen, O., Lyytikäinen, T., & Saarimaa, T. (2021). Revisiting the effects of housing transfer taxes. Journal of Urban Economics, 124, 103367.
Phillips, S. (2020). A Call For Real Estate Transfer Tax Reform. UCLA Lewis Center for Regional Policy Studies.
Martin-Straw, J. (2022 May 20). City Budget Sessions – Property Transfer Tax Debuts as 3rd Largest Income Source. Culver City Crossroads.
Wagner, D. (2021 Dec 17). Ballot Initiative Aims To Fight LA Homelessness By Taxing Top-Dollar Property Deals. LAist.
Blanchflower, D. G., & Oswald, A. J. (2013). Does high home-ownership impair the labor market? (No. w19079). National Bureau of Economic Research.
Freemark, Y. (2020). Upzoning Chicago: Impacts of a zoning reform on property values and housing construction. Urban Affairs Review, 56(3), 758-789.
Saarimaa, T., & Tukiainen, J. (2014). I don't care to belong to any club that will have me as a member: empirical analysis of municipal mergers. Political Science Research and Methods, 2(1), 97-117.
Bratu, C., Harjunen, O., & Saarimaa, T. (2021). City-wide effects of new housing supply: Evidence from moving chains. VATT Institute for Economic Research Working Papers, 146.

Show notes:

Eerola, E., Harjunen, O., Lyytikäinen, T., & Saarimaa, T. (2021). Revisiting the effects of housing transfer taxes. Journal of Urban Economics, 124, 103367.
Phillips, S. (2020). A Call For Real Estate Transfer Tax Reform. UCLA Lewis Center for Regional Policy Studies.
Martin-Straw, J. (2022 May 20). City Budget Sessions – Property Transfer Tax Debuts as 3rd Largest Income Source. Culver City Crossroads.
Wagner, D. (2021 Dec 17). Ballot Initiative Aims To Fight LA Homelessness By Taxing Top-Dollar Property Deals. LAist.
Blanchflower, D. G., & Oswald, A. J. (2013). Does high home-ownership impair the labor market? (No. w19079). National Bureau of Economic Research.
Freemark, Y. (2020). Upzoning Chicago: Impacts of a zoning reform on property values and housing construction. Urban Affairs Review, 56(3), 758-789.
Saarimaa, T., & Tukiainen, J. (2014). I don't care to belong to any club that will have me as a member: empirical analysis of municipal mergers. Political Science Research and Methods, 2(1), 97-117.
Bratu, C., Harjunen, O., & Saarimaa, T. (2021). City-wide effects of new housing supply: Evidence from moving chains. VATT Institute for Economic Research Working Papers, 146.

Previous Episode

Ep 32: Chile’s “Enabling Markets” Policy with Diego Gil

Starting in the 1970s, the Pinochet dictatorship overhauled its housing policies in an effort “to transform Chile from a nation of proletarios (proletarians) to one of propietarios (property owners).” To achieve that goal, and others, Chile adopted what the World Bank would later call an “enabling markets” policy — an approach that reduced the role of government in housing provision and delegated more authority to the private sector. These reforms had far-reaching consequences, not only within Chile but beyond its borders as other nations followed its lead. Diego Gil joins us to share the history of the enabling markets approach and its impacts, both positive and negative. On the one hand, the reforms led to an impressive expansion of the formal housing sector. On the other hand, homes for low-income households were often built in poorly located, inaccessible areas. We explore the difficult task of balancing government regulation and market efficiency, the need for policies that address housing supply and housing demand, and Gil’s proposed alternative to the enabling markets policy.

Show notes:

Mc Cawley, D. G. (2019). Law and Inclusive urban development: lessons from Chile’s enabling markets housing policy regime. The American Journal of Comparative Law, 67(3), 587-636.
Machuca (movie).
World Bank report: Housing: Enabling Markets to Work, 1993.
Turner, J.F.C. (1976). Housing by People: Towards Autonomy in Building Environments.
Abrams, C. (1966). Man's Struggle for Shelter in an Urbanizing World. MIT Press.
Hernando De Soto: The Other Path: The Invisible Revolution in the Third World, 1989.
Planet Money podcast episodes about the Chicago Boys: Part 1, Part 2.
More on measuring housing needs/deficits in the U.S. context: Housing Voice episode 13 with Nick Marantz and Echo Zheng.
Kuai, Y. (2021). Flying Under the Radar: 4% Low-Income Housing Tax Credit Program (Doctoral dissertation, UCLA).
Celhay, P. A., & Gil, D. (2020). The function and credibility of urban slums: Evidence on informal settlements and affordable housing in Chile. Cities, 99, 102605.

Next Episode

Ep 34: Right to Eviction Counsel with Ingrid Gould Ellen

When eviction cases go to court, it’s typical for more than 90% of landlords to have legal representation, but less than 10% of tenants. This puts tenants at a considerable disadvantage, and helps to explain why few renters win their eviction cases; many don’t bother showing up for court hearings at all. Advocates argue that providing free legal representation to tenants — a policy known as “right to counsel” or “universal access to counsel” — would reduce evictions, but there have been few opportunities to study it in an experimental setting. Ingrid Gould Ellen of NYU joins us to talk about the impacts of the policy in New York City, the first U.S. city to adopt a right to counsel, starting with 10 ZIP codes in 2017 and expanding in subsequent years. We learn how the program has affected eviction filings, the share of tenants who receive legal representation, and the number of evictions executed by the court, and we discuss the wider context of housing instability and eviction — including the limitations and harder-to-measure benefits of a lawyer-based eviction reduction strategy.

Show notes:

Ellen, I. G., O’Regan, K., House, S., & Brenner, R. (2021). Do lawyers matter? Early evidence on eviction patterns after the rollout of universal access to Counsel in New York City. Housing Policy Debate, 31(3-5), 540-561.
The New York City Tenement Museum website.
UCLA Housing Voice episode 29 on landlords, discrimination, and serial eviction filings with Eva Rosen and Philip Garboden.
Abramson, B. (2021). The Welfare Effects of Eviction and Homelessness Policies. Job market paper.
Cassidy, M. T., & Currie, J. (2022). The Effects of Legal Representation on Tenant Outcomes in Housing Court: Evidence from New York City's Universal Access Program (No. w29836). National Bureau of Economic Research.
Collinson, R and Reed, D. (2018). The Effects of Evictions on Low-Income Households.
Hoffman, D. A., & Strezhnev, A. (2022). Longer Trips to Court Cause Evictions. U of Penn, Inst for Law & Econ Research Paper No. 22-29.
Lens, M. C., Nelson, K., Gromis, A., & Kuai, Y. (2020). The neighborhood context of eviction in Southern California. City & Community, 19(4), 912-932.
Nelson, K. R. (2022). Litigating the Housing Crisis: Legal Assistance and the Institutional Life of Eviction in Los Angeles. Doctoral dissertation, University of California, Los Angeles.
Nelson, K., Gromis, A., Kuai, Y., & Lens, M. C. (2021). Spatial concentration and spillover: Eviction dynamics in neighborhoods of Los Angeles, California, 2005–2015. Housing Policy Debate, 31(3-5), 670-695.
2021 press release on NYC program expansion: New York City's First-in-Nation Right-to-Counsel Program Expanded Citywide Ahead of Schedule.

UCLA Housing Voice - Ep 33: Housing Transfer Taxes with Tuukka Saarimaa

Transcript

Shane Phillips 0:04
Hello, this is the UCLA housing Voice Podcast. I'm Shane Phillips. Before introducing this episode and our guests, I'd like to quickly share that the Lewis Center and Institute of Transportation Studies are holding our first in person UCLA Arrowhead Symposium since 2019, and this year, our focus will be on housing. It's happening at Lake Arrowhead from October 16 to the 18th, there are still some tickets available for purchase, and they include everything registration,