Why Don't We Know More About Housing Supply?

This paper reviews the main themes in the empirical literature on housing supply and outlines suggestions for future research. Much of the literature has focused on the determinants of new housing supply, particularly the supply of single family detached homes, and the renovation and repair decisions of homeowners. We have learned a great deal from the work that has been done but many important puzzles remain. Much of the literature has focused on aggregate data because there is so little information where the unit of observation is the builder, investor, or landlord. We need to focus on bringing new data to bear on the decision-making processes of these important actors to build our understanding of the micro foundations of housing supply.