You shall not build! (until tomorrow) [:] Electoral cycles and housing policies in Germany

Martin, Thorsten (2017): You shall not build! (until tomorrow) [:] Electoral cycles and housing policies in Germany.

Abstract

This paper investigates whether local politicians adjust their approval of housing licenses during election times in Germany. For my research, I use a balanced Panel of 4,983 West German municipalities from 2002 to 2010. Due to the timing of local elections in Germany, I can disentangle the election effect from common time effects. My results suggest a decrease in new construction approvals for residential housing areas during election years of around 11 % evaluated at the mean, and an increase of similar magnitude in the years following the election. Furthermore, I am able to show that the decrease during election times is associated with the share of homeowners in a municipality. Hence, my research adds to the literature on political business cycles as well as to the existing literature on homevoters and their potential effect on housing policies during election times.

• Item Type: MPRA Paper
• Language: English
• Keywords: Urban development policies, land use regulations, homevoter, political business cycle, housing policies
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H79 - Other; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R31 - Housing Supply and Markets

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