Publications

  • Selling the Debt: Properties Affected by the Sale of New York City Tax Liens

    This data brief sheds light on the process of tax lien sales in New York City, which affected over 15,000 properties and roughly 43,600 residential units between 2010 and 2015.

    It finds that most tax liens in New York City eligible for sale are sold and generate substantial revenue for the city; between 1997 and 2015, the city raised more than $1.3 billion from the sale of tax liens. However, the city also has the power to remove liens eligible for sale from the lien sale list. The report also describes the characteristics of properties with liens sold in New York City between 2010 and 2015, including the property type, their location, and the outcome following the lien sale.

  • Shifting the Burden

    Some of New York City’s most valuable properties in its highest-cost neighborhoods are significantly and persistently undervalued, according to Shifting the Burden. The report identifies 50 individual co-ops in 46 buildings that were sold in 2012 for more than the New York City Department of Finance’s estimate of the market value of the entire building. This undervaluation has significant consequences for the distribution of tax burdens in New York City.

  • The American Mortgage System: Crisis and Reform

    The Secondary Mortgage Market for Housing Finance in the United States: A Brief Overview

    Understanding both the current problems in the secondary market and the proposed solutions requires an understanding of the role of the secondary mortgage market in U.S. housing finance. In this chapter, the authors focus in particular on the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, which for decades were the largest players in the U.S. system. The authors conclude that while the described weaknesses within the chapter are important, and the structure of the GSE’s should surely be improved, it would be a mistake to assume that simply reforming the GSEs, without making significant reforms to the private-label market, would prevent another crisis.


    The Community Reinvestment Act: Evaluating Past Performance and Reviewing Options for Reform

    The passage of the Community Reinvestment Act (CRA) in 1977 set in motion a bold experiment that has yet to achieve its full potential. This chapter analyzes the strengths and weaknesses of implementation of the CRA over the last 33 years and provides potential directions for reform, one of which recommends that the Obama administration designate one agency to take the lead and give the agency a tight timetable, sufficient staffing and analytic resources, and the authority to resolve disputes. While reform may also involve legislation, it is important to make sure that it does not become overly prescriptive and stifle innovation. The banking world will continue to evolve, as will the best ideas on how to revitalize and strengthen communities.


    Improving U.S. Housing Finance Through Reform of Fannie Mae and Freddie Mac: A Framework for Evaluating Alternatives

    This chapter lays out criteria for evaluating proposals for reform of Fannie Mae and Freddie Mac. The authors introduce the basic goals of a healthy secondary market for both the single-family and multi-family markets, which include access to liquid credit markets nationwide, countercyclical stability and availability of safe products that are reasonably priced and clearly understood by borrowers and investors.The authors also offer a framework that will help describe and understand the different proposals for reform and how variants of Fannie and Freddie might fit into that picture. As federal government officials contemplate the future of these two entities, the authors hope that this chapter offers a useful framework to use in evaluating the alternative proposals.

  • The Condominium v. Cooperative Puzzle: An Empirical Analysis of Housing in New York City

    One of the enduring puzzles of New York City’s housing market is the persistence of the housing cooperative, despite the prevailing wisdom that condominiums are more valuable than cooperatives. In this article, we examine the theoretical advantages and disadvantages of cooperatives and condominiums, and apply these theoretical insights to empirically test whether there is a price premium attributable to condominium housing. We then use our findings to speculate as to why the cooperative form remains dominant in New York City and whether its dominance is likely to continue in the future. The empirical analysis is based on hedonic models of house values and uses rich data on apartments sold in New York City between 1984 and 2002.

  • The High Cost of Segregation: Exploring Racial Disparities in High-Cost Lending

    This article argues that policy makers addressing racial disparities in the share of subprime mortgages must take into account the relationship between existing levels of racial segregation and the racial disparities in the types of mortgages homeowners received. The authors examine approximately 200 metropolitan areas across the country and note the significant racial disparities in the percentage of subprime mortgages received by different racial groups. Various mechanisms that explain these racial disparities are also explored. The authors ultimately conclude that residential segregation plays a significant role in shaping lending patterns.

  • The High Cost of Segregation: The Relationship Between Racial Segregation and Subprime Lending

    This study examines whether the likelihood that borrowers of different races received a subprime loan varied depending on the level of racial segregation where they live.  It looks both at the role of racial segregation in metropolitan areas across the country and at the role that neighborhood demographics within communities in New York City played.

  • The Impact of the Capital Markets on Real Estate Law and Practice

    Over the past twenty years, the real estate markets of the United States have been swept by enormous change. A sector of the economy that had long been resistant to change, real estate has been and is continuing to be transformed by the process of securitization on both the debt and equity side. Just twenty years ago, the vast majority of single family residential mortgage loans were provided by local banks or savings and loan associations that held the debt in their portfolios until maturity or prepayment. Today, most single family mortgage debt is sold into the secondary mortgage market and converted into securities. Ten years ago, mortgage loans for commercial properties were largely originated and held by commercial banks, pension funds or insurance companies. In recent years, with the exception of the meltdown of the commercial mortgage-backed securities market in the summer of 1998, the proportion of commercial loans that were securitized rapidly grew. Just six or seven years ago, real estate investment trusts (REITs) were commonly thought of as the investment entity that crashed and burned in the 1970s. In the last two or three years, however, REITs have increasingly come to be seen as a dominant, if not preeminent ownership vehicle in many real estate markets throughout the nation.

  • The Legal Salience of Taxation

    Many tax enforcement regimes incorporate taxpayer-initiated administrative procedures for adjusting tax liabilities. Using a novel dataset, this article examines the property tax appeals process in New York City and finds that the salience of the property tax (its visibility or prominence to taxpayers) has a large effect on the probability of appealing. I find that differences in salience across property owners, unwittingly induced by government policy and private actors, effectively shifts the property tax burden toward certain mortgagors, who are more likely to be racial minorities, foreign-born, and working families with children.

  • The Role of Neighborhood Characteristics in Mortgage Default Risk: Evidence from New York City

    We construct a database of non-prime hybrid adjustable and fixed rate mortgages from New York City that augments a rich set of loan and borrower risk characteristics with a variety of census tract level neighborhood characteristics. We find that these neighborhood characteristics are important for default behavior, even after an extensive set of controls. First, default rates increase with the rate of foreclosure notices and the number of lender-owned properties (REOs) in the tract. Second, default rates for home purchase mortgages are higher in predominantly black tracts, regardless of the borrower’s own race. We explore possible explanations for our findings.

  • The State of Mortgage Lending in New York City

    The analysis of recent mortgage trends from the 2011 State of New York City’s Housing and Neighborhoods report finds that home purchase loans originated in 2010 increased 11 percent over 2009, interrupting what had been a steady downward trend in annual lending since 2005. Much of the rise is due to a 22 percent increase in the number of homebuyers taking out mortgages in low- and moderate-income neighborhoods. The number of loans issued to white, black, and Hispanic borrowers in New York City all increased in 2010, while lending to Asian borrowers decreased slightly.