REAL ESTATE:

Lusk Center’s first Research Awards Symposium brings grantees together to share findings

December 19, 2018
Assistant Professor Jorge De la Roca

Assistant Professor Jorge De la Roca presenting at the symposium

By Matthew Kredell

The USC Lusk Center for Real Estate held a Research Awards Symposium on Dec. 5, with faculty and doctoral students presenting and discussing the research they have been working on through grants from the center.

Lusk has been issuing research grants for years, with the awardees presenting their research individually during hour-and-a-half seminars throughout the year. This was the first of a new annual day for all the awardees to present their research as a group, and to each other.

“At Lusk, we want to steer in the direction of building a research community,” said USC Price Assistant Professor Jorge De la Roca, who will be starting as research director for the Lusk Center in 2019. “With this new format, we hope to increase attendance and promote interactions among participants, as it works better for grantees and other faculty to see all the research in one day.”

From Peru to South Los Angeles

De la Roca presented his research on the impact of mining explorations on the local economy in Peru. The main findings were that mining explorations increase hourly wages, monthly working hours and rents. Gains from these investments also spilled over into other industries.

Sean Angst, a PhD student in Public Policy and Management at USC Price, started off the day by presenting research he has been working on with USC Price Professor Gary Painter and USC Price Assistant Professor Jovanna Rosen, titled “Affordable South Los Angeles: Survival, Support, and Different Futures.”

PhD student Sean Angst

PhD student Sean Angst presenting findings on the consequences of housing affordability

“The purpose of this research is to name the consequences of affordability more explicitly, not only in terms of consumption, but also in terms of life experiences,” Angst said. “We focused on housing, given its unique nature and the way it structures access to employment, education, impacts to health and wellness, and how it depletes much of the monthly budget.”

The researchers ran 17 focus groups last spring, beginning with a 20-minute survey and going into about an hour of dialogue with more than 200 South L.A. residents around four key themes: resident perception of the driving forces of the affordability crisis, what survival strategies they were employing, what support they are utilizing, and different futures they would like to see.

Results showed that residents saw themselves as survivors pushing back against the forces driving the current lack of affordability; that they had a strong desire to remain in place in their community; and that they made adjustments and sacrifices, while supporting each other, to pay rent.

“They want to stay and are doing everything in their power to do so,” Angst said. “There are these strong bonds forming, and we need to think as policymakers and planners how we can help strengthen those and really utilize them to fight against some of these consumption trade-offs and other factors that are working against stability.”

Support from the Lusk Center to conduct this research helped Painter, Rosen and Angst receive a Haynes Foundation grant to further the work by conducting a survey of roughly 2,000 residents of South L.A. and the L.A. Promise Zone early in 2019, so they could test the findings from the focus groups and probe further.

“We were happy to have Lusk fund this pilot study that enabled us to get a major grant from the Haynes Foundation to do a survey,” Painter said. “There are a number of puzzles that remain unanswered. Why don’t you see more displacement among families facing these increasing gentrification pressures? We feel like the survey is going to help us understand how families cope with increasing rent burden, and hear people telling stories of people who did leave. We’ve also seen some weird data spikes, such as increases in Latino families experiencing homelessness, that haven’t been explained. We’re really excited to do this primary data collection starting in January.”

Questions and Answers

Illustrating the benefit of having the awardees present their research in one day, USC Price Professor Chris Redfearn’s presentation helped answer a research question from Linna Zhu, a PhD student in Public Policy and Management.

PhD student Linna Zhu

PhD student Linna Zhu answering a question during the event

Linna’s paper “Wealth, Income and Consumption” looked into the impact of housing wealth on consumption. Data from the U.S. Housing Price Index and personal consumption expenditures show obvious co-movements, making people think there is a causal relationship between consumption behaviors and changes in housing wealth. She found that the impact of changes in housing wealth on consumption is trivial.

In his paper “Housing Submarkets and Their Impact on Indexes and Policy,” Redfearn sought to create local indexes that do a better job of capturing local fundamentals and their differences in value of land by building an index for each neighborhood, then pooling the indexes together, weighing by overall stock rather than number of sales. He found a bias in the major housing indexes which suggests that the value of the housing stock was mismeasured by common indexes by as much as 10 percent in the Los Angeles metropolitan area.

“Maybe one of the reasons you don’t find elasticity of consuming out of housing wealth is because you’re actually understating housing wealth,” Redfearn said, in response to Linna.

Fall Lusk Research Symposium
See more Fall Lusk Research Symposium photos on Flickr »

PhD Urban Planning and Development student Raul Santiago-Bartolomei concluded the symposium with his presentation on “The Role of Micro-Entrepreneurship in Emerging Land Markets: A Case Study of Rental Markets in Havana, Cuba.” Reforms in Cuba in 2011 permitted homeshare — or Airbnb rentals — as a way to foster individual entrepreneurship with citizens, but Santiago-Bartolomei found that the reforms may have had the unintended consequence of exacerbating affordability issues.

“I found the presence of Airbnb rentals is related to affordability issues in long-term rentals for Cuban citizens and that there are voids left unaddressed by the government to provide means for landlords to enter the rental housing market,” Santiago-Bartolomei said. “What it does is entrenches inequality within those potential landlords. Landlords that provide long-term rentals for citizens tend to have a lower socioeconomic status than those that provide short-term rentals for tourists.”

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