Out?of?Town Home Buyers and City Welfare

Many cities have attracted a flurry of out-of-town (OOT) home buyers. Such capital inflows affect house prices, rents, construction, labor income, wealth, and ultimately welfare. We develop an equilibrium model to quantify the welfare effects OOT buyers for typical U.S. metropolitan area. When investors buy 10% housing in city center 5% suburbs, among residents falls by 0.61% consumption-equivalent units. House prices rents rise substantially, resulting gains owners losses renters. Policies that tax or mandate renting out vacant property mitigate losses.