Ep 33: Housing Transfer Taxes with Tuukka Saarimaa

In recent years, many cities have turned to real estate transfer taxes to capture a share of price appreciation and generate revenues for public purposes. Transfer taxes are relatively popular with voters, and they are easy to collect, but they also have disadvantages compared to property taxes and land value taxes. (Shane has also endorsed higher, more progressive transfer taxes in Los Angeles.) Professor Tuukka Saarimaa joins us to discuss one such drawback from his research in Helsinki, Finland: by increasing the cost of moving, transfer taxes may reduce household mobility, making it less likely that people will live in the housing best suited to their needs. But while imposing taxes can discourage socially beneficial activities, spending them can also improve people’s lives, and we consider how this balance is met with housing transfer taxes in particular.Show notes:Eerola, E., Harjunen, O., Lyytikäinen, T., & Saarimaa, T. (2021). Revisiting the effects of housing transfer taxes. Journal of Urban Economics, 124, 103367.Phillips, S. (2020). A Call For Real Estate Transfer Tax Reform. UCLA Lewis Center for Regional Policy Studies.Martin-Straw, J. (2022 May 20). City Budget Sessions – Property Transfer Tax Debuts as 3rd Largest Income Source. Culver City Crossroads.Wagner, D. (2021 Dec 17). Ballot Initiative Aims To Fight LA Homelessness By Taxing Top-Dollar Property Deals. LAist. Blanchflower, D. G., & Oswald, A. J. (2013). Does high home-ownership impair the labor market? (No. w19079). National Bureau of Economic Research.Freemark, Y. (2020). Upzoning Chicago: Impacts of a zoning reform on property values and housing construction. Urban Affairs Review, 56(3), 758-789.Saarimaa, T., & Tukiainen, J. (2014). I don't care to belong to any club that will have me as a member: empirical analysis of municipal mergers. Political Science Research and Methods, 2(1), 97-117.Bratu, C., Harjunen, O., & Saarimaa, T. (2021). City-wide effects of new housing supply: Evidence from moving chains. VATT Institute for Economic Research Working Papers, 146.