OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

How responsive are housing markets in the OECD? Regional level estimates

Making housing more affordable ranks high on the policy agenda across the world. One way to achieve affordable housing is to ensure sufficiently elastic supply of the housing stock in response to demand shocks. This paper aims at disentangling policy from non-policy drivers in explaining cross-regional differences in housing supply elasticities. It uses GIS data to account for the presence of natural and man-made obstacles to residential construction in functional urban areas across the 12 OECD countries that provide sufficiently long time series for regional house prices. The results suggest that the presence of water, steep land, parks and high-density urban areas all restrict the supply of housing. However, there remain very large differences in supply elasticities across countries, which corroborates the finding from national analysis that policies have a strong influence.


Keywords: rent regulation, land use policy, housing supply
JEL: R52: Urban, Rural, Regional, Real Estate, and Transportation Economics / Regional Government Analysis / Regional Government Analysis: Land Use and Other Regulations; R31: Urban, Rural, Regional, Real Estate, and Transportation Economics / Real Estate Markets, Spatial Production Analysis, and Firm Location / Housing Supply and Markets; H7: Public Economics / State and Local Government; Intergovernmental Relations; R14: Urban, Rural, Regional, Real Estate, and Transportation Economics / General Regional Economics / Land Use Patterns
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