Speaker
Description
After the COVID19 pandemic, the cost of rents and mortgages have risen and the relation of these expenditures to income ratio has worsened, reducing the ability of households to reach adequate housing. The region shared by Mexico, United States and Canada are no exception, about one-third of low-income population in North America is burdened by housing costs, and this trend spread across its borders: at least three of its bordering cities are among the twelve most unaffordable housing markets in the world.
This research analyzes the residential supply and demand of 26 border cities in North America and its implications in terms of affordability and planning across multiple jurisdictions. Due to economic, social and policy differences among these three countries, the residential demand of some households is satisfied on the other side of the border. Therefore, this phenomenon creates a foreign demand that is transferred to the adjoining city and thus, to its prices and level of affordability, which in turn affects people's well-being. The effect of this phenomenon can make housing even more unaffordable in markets that are already experiencing significant price increases. Therefore, housing market conditions and the effect of demand from across the border require special attention.
The methodology was based on spatial econometric cross-section hedonic pricing and spatial regimes modeling with robust techniques of principal component analysis, K-means classification, and hierarchical clustering analysis. This research provides empirical evidence of the state of affordability in border housing markets under multiple jurisdictions. Also, offers a comparison of this phenomenon between and within pairs of cities in countries with similar levels of development, such as the United States-Canada, as well as between countries with different economic and social contexts, like Mexico-United States.
References
BTS (2024). Border Crossing Entri Data. Bureau of Transportation Statistics, United States [Online] available at: https://www.bts.gov/browse-statistical-products-and-data/border-crossing-data/border-crossingentry-data
Capello, R. (2007). Regional Economics. New York: Routledge.
Cox, Wendell (2024). Demographia International Housing Affordability 2024 Edition. Winnipeg: Center for Demographics and Policy, Chapman University.
Durlauf, S. N. (2004). Chapter 50. Neighborhood Effects. In Henderson, V. J. and Thisse, J.-F. (eds.) Handbook of Regional and Urban Economics. Amsterdam: North-Holland Elsevier.
Tu, Y. (2003). Chapter 3. Segmentation, Adjustment and Disequilibrium. In O'Sullivan, T. and Gibbs, K. (eds.) Housing Economics and Public Policy: Essays in honour of Duncan Maclennan. Oxford: Blackwell Science.
| Keywords | Housing Affordability; Borders; Regional Planning and Regulation; Spatial Models |
|---|---|
| Best Congress Paper Award | Yes |
