Federal coordination of local housing demolition in the presence of filtering and migration

Vacant housing and even housing demolition have recently become an issue in a number of countries. Given this renewed interest in demolition, this paper contributes to the literature on (i) housing demolition and (ii) policy coordination. The paper extends Sweeney’s (Econometrica 42:147–167, <CitationRef CitationID="CR17">1974a</CitationRef>) analysis of demolition and filtering, by letting households also choose their location. Then when demolishing part of its housing stock, a city effectively evicts some of its residents not just out of the housing quality it demolishes but out of every other of its qualities, too. The paper shows that demolition’s coordination strengthens local governments’ incentive to demolish part of their stock, by shutting down inter city migration within qualities.—A case study on Germany’s East illustrates the effects of coordinated, simultaneous every-city demolition. Copyright Springer Science+Business Media New York 2014