The Danger in Using Monetary Policy to Address Housing Affordability: A Lesson from the Great Recession

2019 ◽  
Author(s):  
Kevin Erdmann
Keyword(s):  
Monetary Policy ◽  
Great Recession ◽  
Housing Affordability ◽  
The Great Recession

scholarly journals The Efficacy of Allocating Housing Growth in the Los Angeles Region (2006–2014)

Urban Science ◽  
2020 ◽  
Vol 4 (3) ◽  
pp. 43
Author(s):  
Darrel Ramsey-Musolf
Keyword(s):  
Los Angeles ◽  
Great Recession ◽  
Housing Prices ◽  
Housing Affordability ◽  
The Great Recession ◽  
Coastal Cities ◽  
Housing Growth ◽  
Housing Needs ◽  
Home Values ◽  
The City

California is known for home values that eclipse U.S. housing prices. To increase housing inventory, California has implemented a regional housing needs allocation (RHNA) to transmit shares of housing growth to cities. However, no study has established RHNA’s efficacy. After examining the 4th RHNA cycle (i.e., 2006–2014) for 185 Los Angeles region cities, this study determined that RHNA directed housing growth to the city of Los Angeles and the region’s outlying cities as opposed to increasing density in the central and coastal cities. Second, RHNA directed 62% of housing growth to the region’s unaffordable cities. Third, the sample suffered a 34% shortfall in housing growth due to the Great Recession but garnered an average achievement of approximately 93% due to RHNA’s transmission of minimal housing growth shares. Lastly, RHNA maintained statistically significant associations with increased housing inventory, housing affordability, and housing growth rates, indicating that RHNA may influence housing development.

scholarly journals Monetary Policy after the Great Recession

2016 ◽  
Vol 64 (5) ◽  
pp. 627-629
Author(s):  
Hana Lipovská
Keyword(s):  
Monetary Policy ◽  
Great Recession ◽  
The Great Recession

scholarly journals Extremely low-income households, housing affordability and the Great Recession

Urban Studies ◽  
2017 ◽  
Vol 55 (8) ◽  
pp. 1615-1635 ◽  
Author(s):  
Michael C Lens
Keyword(s):  
Low Income ◽  
Great Recession ◽  
Regression Models ◽  
Low Cost ◽  
Rental Housing ◽  
Housing Affordability ◽  
Median Income ◽  
Section 8 ◽  
The Great Recession ◽  
Housing Subsidies

The effects of the Great Recession on housing equity and homeownership have been well-documented. However, we know little about how rental households fared and the efficacy of housing subsidies in addressing affordability gaps. This paper examines the extent to which rental housing became less affordable for Extremely Low-Income (ELI) households – those earning less than 30% of the Area Median Income (AMI). I then run regression models to determine the local characteristics most strongly associated with larger affordability gaps, with a focus on whether housing subsidies are effective at combating such gaps. Rental affordability gaps became more pronounced during the Great Recession. In nearly 70% of the counties in my sample, there was an increase from 2007 to 2010 in the number of ELI households per affordable rental unit. Across the country, the increase was 17%, a dramatic increase in only three years. There is considerable variation across the country, with acute affordability crises often concentrated in the South, particularly Florida. Regression models provide compelling evidence that housing vouchers, public housing, and project-based Section 8 subsidies play an important role in limiting the extent to which large numbers of ELI households are competing for a shortage of low-cost rental units. However, these programmes do not respond quickly to local needs – such as those brought about by the Great Recession. A pilot study where local housing authorities had funding to be more agile and responsive would be an important step toward crafting better policy.

scholarly journals Deleveraging and Monetary Policy: Japan Since the 1990s and the United States Since 2007

2012 ◽  
Vol 26 (3) ◽  
pp. 177-202 ◽  
Author(s):  
Kazuo Ueda
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Great Recession ◽  
Federal Reserve ◽  
The United States ◽  
Federal Funds ◽  
Federal Funds Rate ◽  
The Great Recession ◽  
Policy Responses ◽  
The U.S

As the U.S. economy works through a sluggish recovery several years after the Great Recession technically came to an end in June 2009, it can only look with horror toward Japan's experience of two decades of stagnant growth since the early 1990s. In contrast to Japan, U.S. policy authorities responded to the financial crisis since 2007 more quickly. Surely, they learned from Japan's experience. I will begin by describing how Japan's economic situation unfolded in the early 1990s and offering some comparisons with how the Great Recession unfolded in the U.S. economy. I then turn to the Bank of Japan's policy responses to the crisis and again offer some comparisons to the Federal Reserve. I will discuss the use of both the conventional interest rate tool—the federal funds rate in the United States, and the “call rate” in Japan—and nonconventional measures of monetary policy and consider their effectiveness in the context of the rest of the financial system.

scholarly journals Investment Hangover and the Great Recession

2018 ◽  
Vol 10 (2) ◽  
pp. 113-153 ◽  
Author(s):  
Matthew Rognlie ◽  
Andrei Shleifer ◽  
Alp Simsek
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Great Recession ◽  
The Great Recession ◽  
Left Behind ◽  
Ex Post ◽  
Ex Ante ◽  
The Interest Rate

We present a model of investment hangover motivated by the Great Recession. Overbuilding of durable capital such as housing requires a reallocation of productive resources to other sectors, which is facilitated by a reduction in the interest rate. When monetary policy is constrained, overbuilding induces a demand-driven recession with limited reallocation and low output. Investment in other capital initially declines due to low demand, but it later booms and induces an asymmetric recovery in which the overbuilt sector is left behind. Welfare can be improved by ex post policies that stimulate investment (including in overbuilt capital) and ex ante policies that restrict investment. (JEL E22, E23, E32, E43, E52, R21, R31)

scholarly journals Uncertainty and Monetary Policy During the Great Recession

2021 ◽  
Author(s):  
Giovanni Pellegrino ◽  
Efrem Castelnuovo ◽  
Giovanni Caggiano
Keyword(s):  
Monetary Policy ◽  
Great Recession ◽  
The Great Recession
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