Geographic and Temporal Variation in Housing Filtering Rates

77 Pages Posted: 26 Feb 2020 Last revised: 17 Nov 2021

See all articles by Liyi Liu

Liyi Liu

Federal Home Loan Mortgage Corporation (FHLMC)

Douglas A. McManus

Federal Home Loan Mortgage Corporation (FHLMC)

Elias Yannopoulos

Federal Home Loan Mortgage Corporation (FHLMC)

Date Written: November 16, 2021

Abstract

In the field of Housing Economics, filtering is the process by which properties, as they age and depreciate in quality, tend to be occupied by lower-income households. This is the primary mechanism by which competitive markets supply low-income housing. While filtering is an important long-term source of lower-income housing at the national level, this research shows that filtering rates for owner-occupied properties vary considerably both across and within metropolitan statistical areas. Notably, in some markets, properties “filter up” to higher-income households. This paper contributes to our understanding of filtering by demonstrating the geographic and temporal heterogeneity of filtering rates and examining links between filtering, supply elasticity, and gentrification. We also explore two alternative measures of filtering based on changes in relative income rather than real income.

Keywords: filtering, affordable housing, repeat income model

JEL Classification: R21, R31, R38

Suggested Citation

Liu, Liyi and McManus, Douglas A. and Yannopoulos, Elias, Geographic and Temporal Variation in Housing Filtering Rates (November 16, 2021). Available at SSRN: https://ssrn.com/abstract=3527800 or http://dx.doi.org/10.2139/ssrn.3527800

Liyi Liu

Federal Home Loan Mortgage Corporation (FHLMC) ( email )

8200 Jones Branch Road
McLean, VA 22101
United States

Douglas A. McManus (Contact Author)

Federal Home Loan Mortgage Corporation (FHLMC) ( email )

8200 Jones Branch Road
McLean, VA 22101
United States
703-903-2953 (Phone)

Elias Yannopoulos

Federal Home Loan Mortgage Corporation (FHLMC) ( email )

8200 Jones Branch Road
McLean, VA 22101
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
695
Abstract Views
3,394
rank
47,901
PlumX Metrics