Is a Refugee Crisis a Housing Crisis? Only if Housing Supply is Unresponsive

Review

This paper examines the effects of the sudden arrival of 1.3 million Syrian refugees on housing markets in Jordan. Approximately 80 percent of Syrian refugees in Jordan live in
urban centers close to the three large refugee camps.
The authors employ a difference-in-difference approach comparing individuals located in regions closer and farther away from the three largest refugee camps, before and after the beginning of the Syrian Civil War in 2011. The analysis relies on consumer expenditure data from the Household Expenditure and Income Surveys (HEIS), individual-level panel data
from the Jordan Labor Market Panel Survey (JLMPS), data on children health development outcomes from the Demographic and Health Survey (DHS), constructed subdistrict-year
level data on satellite night light density, and UNHCR data on the location of the refugee camps and the initial settlement locations of Syrian refugees in Jordan.

Key findings:

  • Jordanians living closer to the refugee camps increased their housing expenditures after 2011. When the distance to refugee camps is reduced by one standard deviation, housing expenditures increase by 3.8 percent. This increase is primarily driven by large increases in housing prices due to the sudden larger demand for housing units and the unresponsive supply of new dwellings. Housing supply only began to increase in 2016, five years after the beginning of the refugee crisis.
  • The overall level of consumption expenditures for the host population remains unchanged. However, Jordanian nationals with low educational attainment experience reductions in their consumption expenditures. When the distance to refugee camps is reduced by one standard deviation, overall consumer expenditures for low-educated individuals drops by 1.8 percent.
  • Jordanians accommodate increases in housing expenditures by decreasing their consumption of non-durables (including food), education, health care, and communication. These effects are concentrated among low-educated individuals.
  •  Jordanians living closer to refugee camps have higher property and rental income. When the distance to camps is reduced by one standard deviation, rental and property income increases by 5.8 percent. Increases in property and rental income are more pronounced for highly educated Jordanians, who are most likely to own properties.
  • Large housing expenditures are accompanied by worse dwelling quality, but only for individuals who are younger or work in the informal sector.
  • The larger Syrian refugee inflows have had significant and positive effects on housing rental prices in Jordan.
  •  No evidence is found that individuals living closer to refugee camps experience lower access to education or health care after the beginning of the Syrian conflict, or that lower food expenditures are having effects on children development indicators.

The authors recommend rapidly increasing the housing supply in response to large sudden migration flows. They argue that a failure to expand the housing supply may hurt both host and refugee populations by increasing prices, reducing consumption, negatively affecting welfare, and possibly increasing tensions between Jordanians and refugees.

 

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