The Housing Market Impacts of Constraining Second Home Investments

Hilber, Christian A. L.; Schöni, Olivier (August 2016). The Housing Market Impacts of Constraining Second Home Investments (CRED Research Paper 11). Bern: CRED - Center for Regional Economic Development

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We investigate how political backlash against wealthy second home investors in high-amenity places – tourist areas and superstar cities – affects local residents. We exploit a quasi-natural experiment: the ‘Swiss Second Home Initiative’ (SHI), which banned the construction of new second homes in desirable tourist locations. Consistent with our model, we find that the SHI lowered transaction prices of primary homes in affected areas by around 12% but did not adversely affect prices of second homes. Our findings suggest that the negative effect on local economies dominated positive amenity-preservation effects. Constraining second home investments may reinforce rather than reduce wealth inequality.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Economic Policy and Regional Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics
11 Centers of Competence > Center for Regional Economic Development (CRED)

UniBE Contributor:

Hilber, Christian Albin Lukas and Schöni, Olivier

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

CRED Research Paper

Publisher:

CRED - Center for Regional Economic Development

Language:

English

Submitter:

Melanie Moser

Date Deposited:

28 Apr 2020 13:34

Last Modified:

28 Apr 2020 13:34

Uncontrolled Keywords:

Second homes, wealth inequality, land use regulation, house Prices, homeownership, real estate investments

JEL Classification:

D63, G12, R11, R21, R31, R52

BORIS DOI:

10.7892/boris.143539

URI:

https://boris.unibe.ch/id/eprint/143539

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