Friday, 25 February 2011

Promoting Home Ownership

Earlier in the week Robert Pozen wrote in the FT about reforming US mortgage interest relief.

In the UK, we have tended to promote home ownership by actions on the supply side (large building programmes after the war, right to buy legislation and now affordable housing targets). In the US, mortgage interest deduction addresses the demand side (through reducing the cost to the homeowner). Drawing on SERC research by my colleague Christian Hilber, the article argues that not only is MID costly, but it is also ineffective because the link between mortgage interest deduction and home ownership is pretty weak.

Pozen's article summarises the main findings, but you can download Christian's SERC DP if you would like the details.

Friday, 18 February 2011

The Triumph of the City

Ed Glaeser has a new book out "The Triumph of the City" which should make interesting reading for those of us who are fascinated by cities.

The NY times has a book review which will give you a flavour of the arguments.

You can also see him on the Daily Show (although, unfortunately, I can't find a legal link so you'll have to wait for your next trip to the US or ...)

If you are in London, and interested in seeing Ed talk about his book in person, he'll deliver a public lecture at LSE on 14th March.

Tuesday, 8 February 2011

Margate and the Turner Contemporary

Margate is the latest place to try the "art-gallery-as-urban-regeneration-project"

I wouldn't like to comment on the aesthetics, so let's focus instead on the strategy. One possibility is that this will boost tourism. At some point in the future we should be able to assess this on the basis of visitor numbers.

Another possibility is that it will attract "Bohemians" (artists and the like) a regeneration strategy closely associated with Richard Florida. It would be fair to say that the "cultural class" strategy is not without it's critics. I confess myself to be deeply sceptical. I am even more sceptical about the ability of signature buildings to attract the creative class to struggling areas.

Still, when the opening of one high profile project generates such a huge amount of coverage, you understand why local politicians are so attracted to to such grands projets. Unfortunately, I know of no systematic evidence that they have any of the effects claimed for them.

Monday, 7 February 2011


A colleague points me to the website of CLASH [That's the Campaign by Locals Against Sewell Housing, not "the Clash"]

I don't know anything about the local politics of housing in St Albans. But (high) price signals indicated that this is the kind of place where new housing would benefit wider society. Will the New Home Bonus deflect this local opposition? While it might address some of the concerns about congestion, ease the council's funding problems etc, it is hard to see it addressing the fundamental problem - that local people, quite rationally, don't like new development near their homes.