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Real Estate Faculty Research and Impact

By Wisconsin School of Business

March 24, 2022

Exterior view of the School of Business

Faculty members of the Wisconsin Real Estate Program are active researchers and academics at the frontier of knowledge in the fields of real estate economics, housing and finance. They regularly have articles published in top academic journals and frequently participate in conferences around the world. Below are selected research highlights and a brief note about the real-world impacts of their research.


Current Research: Research focus is the interaction of institutions and economic policies with real estate and financial markets.

Research Impact: Opportunity zones (OZ) policy

Professor Alina Arefeva studies the OZ policy which was designed at boosting job growth. The paper uses a census of establishment-level data on employment to identify the effect of OZ related capital gain tax reduction policies on business and job creation. The study shows that it indeed increased the employment growth in firms located in OZ census tracts by 3 to 4.5 percentage points from 2017 to 2019.

Media articles:

· Brookings Institute: Opportunity Zones have had minor impact on labor markets so far

· PEW: Opportunity Zones Don’t Boost Economic Activity, Research Says


Current Research: Real estate research is tightly linked to various aspects of our society. Rising house prices often trigger debates on housing affordability and financial stability globally. A world in which only a few can afford housing is not sustainable. Today, however, most mega-cities worldwide, especially those superstar cities that are growing rapidly, face major challenges in providing affordable housing for their residents. Besides, the impacts of the Covid-19 Pandemic and climate risk have compelled us to rethink the way to evaluate the commercial and residential real estate markets. Therefore, Professor Deng’s research last year has been focused on issues related to sustainability, climate risks, the pandemic, and their impact on the real estate, mortgage, housing markets, and local labor markets.

Research Impact:  Climate risks and mortgage default
Professor Yongheng Deng and Professor Timothy Riddiough investigate the relationship between temperature and residential mortgage default using fine-scale weather information and comprehensive loan performance data. They identify a significant high temperature-to-mortgage default relation. One additional day of mean temperatures above 90oF in each month for the last 12 months is associated with a 2.45% and 2.50% increase in the probability of 30-day delinquency and 90-day+ delinquency, respectively. They explore the findings using three plausible channels: behavioral-psychological, income-liquidity, and rational belief updating. The findings have direct monetary and bank regulatory policy implications.

Yongheng Deng – Awards and Citations

  • Received the 2021 Erwin A. Gaumnitz Distinguished Faculty Research Award from the Wisconsin School of Business.
  • Research works have received more than 6,500 Google Scholar citations.


Current ResearchRecent research covers the microstructure of the real estate market and relevant policy implications for housing and mortgage markets; green amenities and climate changes; managerial incentives in asset management, and the value of demographic governance.

Research Impact

  • Do financial constraints cool down housing booms?
    Professor Lu Han published a research paper “The Effects of a Targeted Financial Constraint on the Housing Market,” in the top finance journal, Review of Financial Studies, showing that the answer is not necessarily yes. When the credit constraint is targeted at a particular price segment, say above $1M, it could affect sellers’ listing strategy and increase bidding intensity for homes below $1M, which mitigates the intended cooling impact of the policy.
  • Opportunity zones and housing affordability
    In another recent working paper “The Micro-geography of Housing Supply”, Professor Lu Han studies the neighborhood level local housing supply elasticities for different margins of housing supply (land, units, and floorspace) for new construction and redevelopment across 50,409 urban census tracts in 306 metropolitan areas. The study provides the most comprehensive picture of housing supply in the U.S. to date and has been proven valuable for evaluating place-based policies such as opportunity zones and housing affordability policies such as rent controls.

Conference Presentations

  • NBER Environmental; ABFER Annual Conference (Singapore)
  • Regional Disparities & Economic Policy Workshop (German Research Foundation
  • Urban Economics Association Conference
  • QED Frontiers of Macro Workshop


Current Research:  Research is focused primarily on issues associated with the performance of institutionally owned private equity real estate (PERE). Topics/papers include developing new methods to benchmark PERE investment performance, analyzing investable persistence in PERE, examining the effects of LP networking on investment performance and examining if LP’s exhibit “hot hands” in their investment performance. All of this work is joint with Ph.D. student Da Li.  Also has written a paper joint with Yongheng Deng and Congyan Han (Ph.D. student) that looks at the relationship between climate change and mortgage default.

Conference Presentations

  • 2021, “The Weather Channel: High Temperature, Climate Change and Mortgage Default,” Paris Finance Conference.
  • 2021, “Deciphering Private Equity Incentive Contracting and Leverage Choice,” 13th ReCapNet conference on digitalization and real estate, Stockholm.
  • 2021, “Collateral Reallocation in Commercial Real Estate in the Shadow of COVID-19, Boston Fed conference on leverage and the macroeconomy.
  • 2020, “Pension Funds and Private Equity Real Estate,” Institute for Private Capital, University of N. Carolina.


Current Research:  Current research projects focus on mortgage contracts and asymmetric information in mortgage securitization, and the impact of hurricanes on residential and commercial property prices.

Research Impact:  Hurricanes and local housing markets
Professor Abdullah Yavas investigates whether the local housing markets can be affected by the occurrence of a large-scale but distant hurricane without direct impact. The study finds that the impact of a property’s flood risk exposure on its value varies over time, with a price penalty of 4% in the hurricane striking period. By contrast, within a quiet hurricane period, properties within high flood hazard zones demand a price premium ranging roughly from 4% to 6%, which may represent the price impact of water-related amenities. The premium declined significantly upon Hurricane Sandy.

Presentations and Activities:

  • Served as the editor of Real Estate Economics, the leading academic journal in real estate
  • Served as elected president of the American Real Estate and Urban Land Economics Association (AREUEA), the leading academic association in real estate.
  • Member of the Advisory Board of the Real Estate Research Institute, the research arm of Pension Real Estate Association
  • Presented and discussed papers in numerous conferences and gave seminars at various universities around the world in the past year.
  • Quoted in a recent article in the Washington Post, This Block Used to be for First-Time Homebuyers. Then Global Investors Bought In.


Current Research: Current research discovers that the spread of COVID-19 leads to reduced customer visits to the retail businesses, thus a rise of commercial mortgage defaults. The financial pressure faced by the defaulted mortgage borrowers makes them harsher in evicting distressed tenants, which leads to more business closures.

Research Impact:  COVID-19 impact on commercial real estate
Professor Dayin Zhang discovers that the spread of COVID-19 leads to reduced customer visits to the commercial retail businesses, hence a rise of commercial mortgage defaults. The financial pressure faced by the defaulted mortgage borrowers makes them harsher in evicting distressed tenants, which leads to more business closures.

WSB Feature Article on Research