The urban institute housing model

This paper reports on the basic structure of the Urban Institute Housing Model, a model of 10-year changes in housing quality and household location within a metropolitan area. The model represents a metropolitan area housing market by a few dozen "model" households and dwellings (each one representing several hundred or thousand actual cases), a building industry, and a composite "government." Households seek to maximize "utility", owners of dwellings to maximize profits. A simulation algorithm is used to find a solution to the model for any set of inputs. Differences in quality among dwellings and differences in racial composition and wealth among geographic zones all play major roles in the model. The model can incorporate a wide range of government policies with respect to housing and land use.