Alrov Institute for Real Estate Research

Green spaces moderate adverse climate change effects in urban areas. A GIS dataset on tree canopies within urban areas in Israel is employed to examine disparities in tree canopy availability associated with population political beliefs. Political inclination is identified based on small statistical area votes in national elections using a clustering method. Based on multivariate regression analysis, findings show that areas dominated by politically left-leaning voters are associated with a greater presence of tree canopies, as compared to their right-leaning counterparts

This study examines the capitalization of location-based personal income tax incentives into residential real estate prices, utilizing a comprehensive dataset of housing transactions in Israel from 1998 to 2023. We exploit a major legislative reform in 2016 that significantly expanded the set of localities eligible for income tax credits, based on geographic periphery, socio-economic status, and border proximity, to estimate the causal effect of fiscal benefits on local housing markets. Employing a difference-in-differences framework, we document substantial heterogeneity in capitalization effects across regions.

We study how real estate investors affect residential housing markets. Israeli administrative data show that an unexpected and temporary capital gains tax exemption induced a rise in investor sales and reduced investor ownership. Exploiting variation in investor outflows across local markets, we find that investor net outflows raised both rents and house prices, challenging conventional wisdom. We propose a new theory in which investors allocate housing units between rental use and owner-occupancy, thereby either easing or amplifying market inefficiencies. Investor outflows can raise or lower prices depending on initial conditions, with prices rising when investor participation is too low.