ESSAYS IN URBAN AND REAL ESTATE ECONOMICS

This dissertation studies how regulatory and information barriers affect housing market activities. The first chapter studies the impact of land use regulation on housing development and welfare of residents. It exploits an ambitious policy experiment led by Mayor Bloomberg in New York City during 2002-2013. The reform increased regulatory floorspace allowance, equivalent to 5% of the city's total housing stock. The empirical results from a spatial difference-in-difference design indicate that housing supply responded slowly to the reform. The policy-induced new development generated positive spillover effects in surrounding areas but were delayed by the slow supply response. I quantify the impacts of these changes on welfare by developing a dynamic spatial model. The model features the interaction between the lumpy adjustment of housing supply and spatial reallocation of heterogenous workers. Counterfactual analysis suggests that the reform increases the total housing supply by 0.7% in the long run and delivers welfare benefits for both high- and low-skilled workers. However, adjustment costs are pervasive in this market, which erode away 67% of the policy's potential impact on new development. The second chapter is a joint work with Maisy Wong. We study the impact of digital platform on housing market transactions and contribute novel estimates of scale effects in platforms. Our research design overcomes challenges including (i) the non-rivalry of data, making it difficult to observe the direct benefits of platform and (ii) the endogeneity of platform's scaling decisions. We study the 2013 merger of three Multiple Listings Service (MLS) in Florida, the primary platforms where properties are transacted. The merger sharply increased the platform scale for (treated) brokerages whose platforms were not dominant in a local market prior to the merger. Differences-in-differences estimates indicate that non-dominant brokerages are more likely to have inter-platform matches and their sales are also faster by two weeks, consistent with the merger reducing search costs. From the average firm's perspective, however, the revenue benefits from scaling platforms is small. This is consistent with the localized nature of intermediation in real estate and the need for in-person services.