Homeownership, Community Interactions, and Segregation

Homeownership, Community Interactions, and Segregation

The authors consider a multi-community city where community quality is linked to residents' civic efforts, such as being proactive in preventing crime and ensuring the quality of publicly provided goods. Homeownership increases incentives for such efforts, but credit market imperfections force the poor to rent. Within-community externalities can lead to segregated cities-with the rich living with the rich in healthy homeowner communities, and the poor living with the poor in dysfunctional renter communities. The pattern of tenure segregation across communities in the United States accords well with the study's prediction. The authors analyze alternative tax-subsidy policies to alleviate inefficiencies in the housing market and identify the winners and losers under such policies.

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Bibliographic Details
Main Authors: Hoff, Karla, Sen, Arijit
Language:English
en_US
Published: World Bank, Washington, D.C. 2004-03
Subjects:AGGREGATE DEMAND, AIR POLLUTION, APARTMENTS, BENCHMARK, CAPITAL GAINS, CITIES, CITIZENS, COMMUNITIES, CONFLICT, CRIME, DEBT, DIMINISHING RETURNS, ECONOMIC PERFORMANCE, EMPIRICAL EVIDENCE, EMPIRICAL STUDIES, EQUILIBRIUM, EXTERNALITIES, EXTERNALITY, FAMILIES, HOMEOWNERS, HOMES, HOUSEHOLDS, HOUSES, HOUSING, HOUSING CONTRACTS, HOUSING MARKET, HOUSING PROJECTS, HOUSING UNITS, INCOME, INCOME DISTRIBUTION, INDIFFERENCE CURVES, INEFFICIENCY, INEQUALITY, INTEREST RATES, LOCAL INSTITUTIONS, MARGINAL COST, MOBILITY, MORAL HAZARD, MULTIPLIER EFFECT, NEIGHBORHOODS, PEER GROUPS, POLITICAL PARTICIPATION, POLLUTION, POOR HOUSING, PRESENT VALUE, PROPERTY VALUES, PUBLIC GOOD, RENTING, RENTS, SAFETY, SAVINGS, SOCIAL INTERACTIONS, SOCIAL PROBLEMS, SOCIETY, SUPPLY CURVES, URBAN DEVELOPMENT, URBAN REDEVELOPMENT, WEALTH APARTMENTS, COMMUNITY ORGANIZATIONS, COMMUNITY SAFETY, HOUSING SUBSIDIES, LOCAL GOVERNMENTS,
Online Access:http://documents.worldbank.org/curated/en/2004/05/4973500/homeownership-community-interactions-segregation
https://hdl.handle.net/10986/14019
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Summary:The authors consider a multi-community city where community quality is linked to residents' civic efforts, such as being proactive in preventing crime and ensuring the quality of publicly provided goods. Homeownership increases incentives for such efforts, but credit market imperfections force the poor to rent. Within-community externalities can lead to segregated cities-with the rich living with the rich in healthy homeowner communities, and the poor living with the poor in dysfunctional renter communities. The pattern of tenure segregation across communities in the United States accords well with the study's prediction. The authors analyze alternative tax-subsidy policies to alleviate inefficiencies in the housing market and identify the winners and losers under such policies.

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