Dusan Paredes (p) , Camila Alvayay, Mark Skidmore

The purpose of this paper is to evaluate the degree to which the demolition of low-quality structures in Detroit affects property tax compliance. During the real estate crisis, the rate of property tax delinquency exceeded 50 percent. During this time the Hardest Hit Fund (HHF) provided federal assistance to places that were most heavily affected by the housing crisis that began in 2007. Detroit was one of the cities to receive funding. The demolition of dilapidated structures could lead to improvements in tax compliance in two ways. The first is through an amenity effect; removal of blighted structures improves the neighborhood and thus may increase the likelihood that neighbors pay their property taxes. The second is via the existence of spatial contagion in tax delinquency. In this context, we use spatial analysis to examine the effects of demolition on tax delinquency. As a prelude to the full set of results, we find that tax delinquency is reduced when nearby properties are demolished, though we are unable to disentangle the amenity and contagion effects. However, we show that these effects are strongest for nearby properties. The panel nature of the data combined with exogenous shocks generated by demolitions gives us confidence that our estimates are robust results against potential endogeneity. Also, our results are robust when we incorporate additional information on the demolition of land-bank properties.

Michal Gluszak (p), Agnieszka Malkowska, Bartlomiej Marona

In recent two decades, several important innovations have emerged and been adopted in the built environment across the world. Amongst the most prolific technological innovations are green (sustainable) and intelligent (smart) buildings design. The adoption of that innovation was particularly visible in the commercial property market. In the case of sustainable design, the process has been facilitated by the emergence of independent third party governance institutions and the development of green building certification systems.
In many cases, the process of innovation diffusion is a spatial phenomenon that manifests as hierarchical/cascade or contagious dispersion of given technological advancements. Since Hägestrands (1953) seminal work on the mechanisms of spatial diffusion of innovation the problem has been discussed theoretically and investigated empirically in regional science. The diffusion of innovation has also been addressed in business and economic research.
We analyse the spatial diffusion of sustainable innovation across commercial property markets in Europe. Using a panel of major European office markets observed from 2008 to 2018, we trace the diffusion of green/smart building innovation diffusion in Europe, both over space and time. We focus on four major green building certification schemes: LEED developed in the US, BREEAM from UK, French HQE and German DGNB. In the empirical part, we use data from public directories of office buildings registered within given certification schemes and information on major office markets in Europe (mostly office stock). In the research, we address the role of selected economic and institutional variables acting as barriers and drivers for spatial diffusion. We investigate the adoption of new technologies by analysing the fraction of innovative (green/smart) office space in particular office markets.

Rafael González-Val (p), Miriam Marcén

From 1999 to 2005 the Spanish housing market was characterised by an extraordinary boom, which increases house prices (euros per m2) by 117%. This housing bubble had a crucial role on the impact of the international financial crisis beginning in 2008 in the Spanish economy. After 2008, during the Great Recession, house prices dramatically decreased and unemployment increased. At the same time, the number of defaults on the repayment of mortgage loans and foreclosures significantly raised.
In this paper, we examine the effect of the Spanish law reform passed in 2012 to protect mortgage debtors. Under this new regime, low-income debtors that meet some requirements can hardly be evicted and, in case of default, the bank is forced to offer the debtor a restructuring of the debt or even, as a last resort, the debtor can deed the property over to the bank as an alternative to having the lender foreclose on the property.
We consider data from 50 Spanish provinces (NUTS III regions) from 2001 to 2017. By using panel data models with fixed effects, linear and quadratic region-specific time trends and other relevant control variables at the regional level (house prices, inflation and unemployment rates), our results reveal that the reform had a significant effect, reducing the number of foreclosures and new mortgage loans, but this effect was transitory, fading after four years.