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Simon Buechler

Assistant Professor

Finance


Simon Buechler

Contact Information

Office Hours

  • MW 1:30-2:30pm
  • By Appointment

Links

* Accessible version of PDF available upon request.

Profile

Academic Background

  • I am an Assistant Professor of Finance at the Farmer School of Business at Miami University. I am also an affiliate of the Urban Economics Lab and the Sustainable Urbanization Lab at the Massachusetts Institute of Technology (MIT) Center for Real Estate and the Center for Regional Economic Development (CRED) at the University of Bern.
  • My research interests include finance, public, urban, and real estate economics.

Academic & Professional Experience

Recent Publications

  • Making Housing Affordable? The Local Effects of Relaxing Land Use Regulation Journal of Urban Economics (with Elena Lutz)
  • This paper examines the effects of relaxing land-use regulations on housing supply and rents at the local intra-city level. We apply a staggered difference-in-difference model, exploiting exogenous differences in the treatment timing of zoning plan reforms as identifying variation. Increasing the allowable floor-to-area ratio (FAR), i.e., upzoning, significantly increases the living space and housing units by approximately 9% in the subsequent five to ten years. This effect is stronger for larger upzonings, for rasters where zoning is binding, and where rents are high. Furthermore, upzoning leads to no difference in hedonic rents between upzoned and later-upzoned rasters. These results show that upzoning is a viable policy for increasing housing affordability. However, the effects depend on the upzoning policy design and take several years to materialize.
  • The Past and Future of Non-Residential-to-Residential Conversions in New York City Cities (with Ernesto Aldana and Lyndsey Rolheiser)
  • Concerns over rising office vacancy rates and falling office building property values in many urban areas have increased the pressure on cities and developers to consider converting underused office space to residential use. To aid in current and future conversations surrounding the feasibility of conversion, we look to the recent past. In doing so, we provide an account of conversion and redevelopment activity in New York City over the past decade to uncover associated structural and locational characteristics. We find that office-to-residential conversions contributed the greatest share of residential rental units of all non-residential conversions from 2010 to 2020, with nearly 5900 units created. However, there is suggestive evidence that more recent obsolete office buildings generate significantly fewer units as compared to office conversions of the 1990s. We additionally model the probability of conversion and redevelopment. We find that hotels have the highest conversion probability, followed by loft, retail, industrial, and office. In general, relatively taller, narrower, older buildings with diminished value are more likely to be converted.
  • The Geography of Mortgage Interest Deductions Journal of Urban Economics (with Yashar Blouri and Olivier Schöni)
  • We investigate the heterogeneous impact of the US federal mortgage interest deduction (MID) on households’ location and tenure decisions. We develop a spatial general-equilibrium model at the county level featuring an endogenous itemization of housing subsidies. We find that repealing the MID decreases homeownership rates more strongly in central areas because owner-occupiers migrate to the countryside. Welfare increases because positive externalities arising from less congested housing markets and undistorted tenure decisions outweigh productivity losses. A MID repeal is preferred to an increase of standard tax deductions as implemented in 2018 by the Tax Cuts and Jobs Act.
  • Quantifying Land-Use Regulation and its Determinants Journal of Economic Geography (with Maximilian von Ehrlich)
  • We analyze land-use regulation and the determinants thereof across Swiss municipalities. We construct several residential development stringency indices based on a comprehensive survey. These indices capture various aspects of local regulation and land-use coordination across jurisdictions. Combining these indices, we construct an index that provides harmonized information about what local regulation entails and the local regulatory environment across municipalities. Our analysis shows that historical building density, natural amenities, socio-demographic factors, cultural aspects and municipal competition are important determinants of local land-use regulation. However, a large share of land-use regulation variation remains unexplained. Moreover, our results indicate that more stringent land-use regulation is associated with steeper house price increases but less urban sprawl.
  • The Impact of Human Capital and Housing Supply on Urban Growth Urban Studies (with Dongxiao Niu, Anne Kinsella Thompson, and Siqi Zheng)
  • We empirically analyse the impact of human capital and housing supply on urban growth in the US and China. Integrating the heterogeneity of housing supply helps determine how a positive human capital shock translates into more population, higher house prices, or higher wages. To causally estimate this effect, we use a rich urban-level data set, choose our controls using the post-double-selection methodology, and instrument human capital with the per capita number of historical educational institutions. We find that human capital positively impacts urban population, house price and wage growth. While an elastic housing supply reinforces the impact on urban growth, it reduces house price growth and wage growth. Our results infer that human capital increases productivity in both countries and acts as an amenity only in the US.
  • The Amplifying Effect of Capitalization Rates on Housing Supply Journal of Urban Economics. (with Maximilian von Ehrlich and Olivier Schöni)
  • We provide empirical evidence that increases in housing rental income lead to a larger supply response than price increases of the same percentage value. We rationalize this differential in supply responsiveness with an amplification mechanism arising from a downward revision of capitalization rates following a rental income increase. We document that the amplification of the housing supply price elasticity is less pronounced in geographically constrained and tightly regulated neighborhoods and areas having more sophisticated investors. Our findings hold valuable lessons for public policies affecting the housing rental income, such as rent control and housing subsidies.

Honors & Awards

  • Real Capital Analytics Postdoctoral Fellowship. (150,000 USD)
  • Swiss National Science Foundation Doc.Mobility fellowship. (46,000 USD)
  • MISTI Global Seed Funds Award for the project “Land Use Regulation Index Colombia”. (23,000 USD)
  • Real Estate Research Institute (RERI) Board of Directors funding for the project “Estimating the impact of climate risk for commercial real estate portfolios”. (15,000 USD)
  • MIT HASS Award for the project “Climate Change and Real Estate”. (7,000 USD)
  • ARES Best Paper Award in Housing for the paper “The Local Effects of Relaxing Land Use Regulation on Housing Supply and Rents”

Biography

I am an Assistant Professor of Finance at the Farmer School of Business at Miami University. Trained as a Ph.D. in Economics at the University of Bern, Switzerland, I did my post-doctoral research at MIT to further my real estate finance and economics training. Over the years, I have developed a comprehensive set of scientific skills for combining theory with microeconomic data to better understand how economic forces affect residential and commercial real estate markets, primarily focusing on the supply side of the markets. My research has been published in leading international peer-reviewed journals. I also presented at major international conferences and seminars during my academic career. In my previous role as Director of the Price Dynamics Platform at the MIT Center for Real Estate (CRE), led by Prof. David Geltner, since June 2021, I have led and contributed to various projects that require the above skills. The combination of conducting scientific research and doing policy work has ensured that my research is interesting from both an academic and practitioner's point of view. Besides my research duties, I also lecture the Principles of Real Estate class at Miami University, participate in training new group members, mentor undergraduates, and master's students, and write applications for grants and fellowships. Furthermore, I have helped expand the group's capacity by engaging with external collaborators and establishing long-term collaborations that also benefit other projects in the group. In addition, I have represented the group in engaging with sponsors and potential sponsors in preview and progress meetings.

Courses

  • FIN 331 A MW 2:50PM-4:10PM FSB 0012
  • FIN 331 B MW 4:25PM-5:45PM FSB 0012