TY - JOUR AU - Glaeser,Edward L. AU - Gottlieb,Joshua D. AU - Tobio,Kristina TI - Housing Booms and City Centers JF - National Bureau of Economic Research Working Paper Series VL - No. 17914 PY - 2012 Y2 - March 2012 UR - http://www.nber.org/papers/w17914 L1 - http://www.nber.org/papers/w17914.pdf N1 - Author contact info: Edward L. Glaeser Department of Economics 315A Littauer Center Harvard University Cambridge, MA 02138 Tel: 617/495-0575 Fax: 617/495-7730 E-Mail: eglaeser@harvard.edu Joshua D. Gottlieb Vancouver School of Economics University of British Columbia #997 - 1873 East Mall Vancouver, BC V6T 1Z1 Canada Tel: (617) 822-4121 E-Mail: Joshua.Gottlieb@ubc.ca Kristina Tobio Kennedy School of Government 79 JFK St- T347 Cambridge, MA 02138 E-Mail: kristina_tobio@ksg.harvard.edu AB - Popular discussions often treat the great housing boom of the 1996-2006 period as if it were a national phenomenon with similar impacts across locales, but across metropolitan areas, price growth was dramatically higher in warmer, less educated cities with less initial density and higher initial housing values. Within metropolitan areas, price growth was faster in neighborhoods closer to the city center. The centralization of price growth during the boom was particularly dramatic in those metropolitan areas where income is higher away from the city center. We consider four different explanations for why city centers grew more quickly when wealth was more suburbanized: (1) gentrification, which brings rapid price growth, is more common in areas with centralized poverty; (2) areas with centralized poverty had more employment concentration which led to faster centralized price growth; (3) areas with centralized poverty had the weakest supply response to the boom in prices in the city center; and (4) poverty is centralized in cities with assets, like public transit, at the city center that became more valuable over the boom. We find some support for several of these hypotheses, but taken together they explain less than half of the overall connection between centralized poverty and centralized price growth. ER -