Old Houses Never Die: Assesing the Effectiveness of Filtering as a Low-Income Housing Policy

Author: Christopher Zigmund Galbraith

Dissertation School: University of Texas at Austin

Pages: 121

Publication Date: December 1996

Availability:
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Access Number: 9955

Abstract:
Filtering has long been the de facto housing policy in the United States, but is it an effective policy? Does filtering satisfy the demand for low cost housing? This dissertation consists of three related chapters. Together they can be used to assess the effectiveness of filtering as a housing policy. Data are drawn from the 1974 to 1991 American Housing Survey (AHS) Metropolitan Files which provide detailed information on a panel of housing units in 33 large metropolitan areas. Adapting the recent literature on poverty indexes, the first chapter develops a index of affordability that takes into account the physical condition of the unit, as well as the needs and resources of the household. The results indicate that while a majority of the poverty population continue to live in inadequate housing, by a variety of measures, housing poverty has decreased. However, the poor have not faired as well as the wealthy, leading to an increase in inequality. Filtering reflects the change in quality of housing over time. Borrowing form stochastic frontier analysis, the error term of a hedonic regression is divided into a stochastic component, and a systematic component which reflects quality. Changes over time in the resulting quality index provide a measure of depreciation. The results show that housing depreciates far slower than generally assumed, although rented housing depreciates faster than owned housing.

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