TY - JOUR AU - Sieg, Holger AU - Yoon, Chamna TI - Waiting for Affordable Housing in New York City JF - National Bureau of Economic Research Working Paper Series VL - No. 26015 PY - 2019 Y2 - June 2019 DO - 10.3386/w26015 UR - http://www.nber.org/papers/w26015 L1 - http://www.nber.org/papers/w26015.pdf N1 - Author contact info: Holger Sieg Department of Economics University of Pennsylvania 3718 Locust Walk Philadelphia, PA 19104 Tel: 215 898 7194 Fax: 215-573-2057 E-Mail: holgers@econ.upenn.edu Chamna Yoon Korea Advanced Institute of Science and Technology Republic of Korea E-Mail: chamna.yoon@gmail.com AB - We develop a new dynamic equilibrium model with heterogeneous households that captures the most important frictions that arise in housing rental markets and explains the political popularity of affordable housing policies. We estimate the model using data collected by the New York Housing Vacancy Survey in 2011. We find that there are significant adjustment costs in all markets as well as serious search frictions in the market for affordable housing. Moreover, there are large queuing frictions in the market for public housing. Having access to rent-stabilized housing increases household welfare by up to $65,000. Increasing the supply of affordable housing by ten percent significantly improves the welfare of all renters in the city. Progressive taxation of higher-income households that live in public housing can also be welfare improving. ER -