Susan Wachter

Consulting

Real Estate Markets Jones Lang LaSalle;  Mortgage Insurance Markets GE Financial.

Career and Recent Professional Awards; Teaching Awards

American Real Estate and Urban Economics Lifetime Achievement Award 2005; American Real Estate and Urban Economics Best International Paper Award 1995; Undergraduate Division Excellence in Teaching Award, 1991; Lindback Award for Distinguished Teaching, University of Pennsylvania, 1975; Anvil Award for Teaching Excellence, 1974

Academic Positions Held

Wharton: 1972present; named Albert Sussman Professor of Real Estate July 2013;  (Richard B. Worley Professor of Financial Management, 20032013); Chairperson, Real Estate Department, 19972000; Director, Wharton Geographical Information Systems Lab, 1995present). University of Pennsylvania: (Codirector of Penn Institute for Urban Research, 2004Present; Professor of City and Regional Planning, 1995present; Ombudsman, 198790). Previous appointment: Bryn Mawr College. Visiting appointment: Singapore Management University (Celia Moh Visiting Professor, 2004)

Professional Leadership

Board of Editors, Journal of Housing Economics, 2003present; Board of Editors, Housing Policy Debate, 2003present; Board of Editors, Journal of Real Estate and Finance, 2003present; Board of Editors, Journal of Real Estate Research, 2004present; Board of Editors, Journal of Housing Research, 2006; Homer Hoyt Institute Faculty Fellow, 2003present

Corporate and Public Sector Leadership

Financial Research Advisory Committee, Office of Financial Research, U.S. Department of the Treasury 2016present; Global Urban Development Advisory Board; National Research Council Review Board on HUD Research 2008; Advisory Board for Regulatory Research, National Association of Homebuilders, 20052006; Board of Directors, American Real Estate and Urban Economics Association, 20032006; Blue Ribbon Committee on Housing Finance, 20052006

Arthur Acolin, Xudong An, Raphael Bostic, Susan M Wachter (2017), Homeownership and Nontraditional and Subprime Mortgages, Housing Policy Debate, 27 (3), pp. 393418.

Abstract: This article documents the growth and geographic distribution of nontraditional mortgages (NTMs) and subprime mortgages during 20002006, and examines the association between these products and homeownership at the county level between 2000 and 2012. It finds a significant relationship between the origination of NTM and subprime mortgages during the boom and changes in the number of homeowners (positive during the 20002006 period and negative during the 20062012 period) but no significant relationship with the change in the homeownership rate. Looking at specific categories of the population, the results indicate a positive relationship between the presence of NTMs and subprime mortgages and increased numbers of homeowners for young households as well as for low income and minority households, but the relationship is smaller than for the general population. Overall, the relationship between NTMs and homeownership is stronger than the relationship between subprime mortgages and homeownership during the boom and it is less negative during the bust.

Susan M Wachter, Arthur Acolin, Scott Bernstein (2017), Opportunity, Housing Access, and Infrastructure, Housing Policy Debate, 27 (3), pp. 468471.

Susan M Wachter and Arthur Acolin (2017), Housing and Opportunity, Penn IUR Brief.

Susan M Wachter and Patricia Mccoy, “Representations and Warranties: Why They Did Not Stop the Crisis”. In Evidence and Innovation in Housing Law and Policy, Cambridge, U.K.: Cambridge University Press, forthcoming, edited by Lee Fennell and Benjamin Keys, (2017),

Arthur Acolin and Susan M Wachter (2017), Opportunity and Housing Access, Cityscape, 19 (1), pp. 135149.

Abstract: This article examines the relationship between employment opportunity and housing affordability. Access to locations with highproductivity jobs is increasingly limited by regional housing affordability barriers. Recent articles demonstrate a new regional divergence in access to highproductivity regions accompanied by declines in worker mobility associated with affordability barriers. We update these findings and discuss their longterm implications for economic opportunity and intergenerational welfare. We show that areas, from which lowerincome households are increasingly priced out, are also more likely to have higher levels of intergenerational mobility. Access to opportunity also continues to be challenged within metropolitan areas as the gentrification of downtown neighborhoods is accompanied by an increase in concentrated poverty in outlying city neighborhoods and inner ring suburbs. These trends on regional and local scales derive from the increased importance of place in the knowledgebased economy and interact to reinforce growing spatial inequality. We conclude with a discussion of the importance of identifying placebased solutions to counter growing spatial inequality of opportunity.

Andrey Pavlov, Eva M. Steiner, Susan M Wachter (2016), REIT Financing Choices: Preparation Matters , Forthcoming: Real Estate Economics.

Susan M Wachter, Andrey Pavlov, Eva M. Steiner (Work In Progress), The Consequences of REIT Index Membership for Return Patterns (Forthcoming).

Arthur Acolin, Laurie S. Goodman, Susan M Wachter (2016), A Renter or Homeowner Nation?, Cityscape, Volume 18, pp. 145158.

Abstract: This article performs an exercise in which we identify the potential impact of key drivers of homeownership rates on homeownership outcomes by 2050. We take no position on whether these key determinants in fact will come about. Rather we perform an exercise in which we test for their impact. We demonstrate the result of shifts in three key drivers for homeownership forecasts: demographics (projected from the census), credit conditions (reflected in the fast and slow scenarios), and rents and housing cost increases (based on California). Our base case average scenario forecasts a decrease in homeownership to 57.9 percent by 2050, but alternate simulations show that it is possible for the homeownership rate to decline from current levels of around 64 percent to around 50 percent by 2050, 20 percentage points less than at its peak in 2004. Projected declines in homeownership are about equally due to demographic shifts, continuation of recent credit conditions, and potential rent and house price increases over the long term. The current and post WW II normal of two out of three households owning may also be in our future: if credit conditions improve, if (as we move to a majorityminority nation) minorities’ economic endowments move toward replicating those of majority households, and if recent rent growth relative to income stabilizes.

Arthur Acolin, Jesse Bricker, Paul Calem, Susan M Wachter, Borrowing Constraints During the Housing Bubble.pdf).

Abstract: This paper identifies for the first time the impact of borrowing constraints in the recent decline in homeownership rates. Using data from the Survey of Consumer Finance (SCF), we measure the combined impact of income, wealth and credit constraints on homeownership outcomes over time. It has been established that credit supply loosened during the 200407 period and then became considerably more restricted in the wake of the Great Recession. Homeownership has also declined. However, the impact of this tightening of credit on probability of individual households to become homeowners has not previously been estimated. Using estimations of borrowing constraints going back to 2001, we identify the impact of earlier period borrowing constraints compared to those of 201013 on population level U.S. homeownership rates.

Eugenie L. Birch, Shahana Chattaraj, Susan M Wachter (2016), Urban Governance and Development of Informality in China and India, Slums: How Informal Real Estate Markets Work, University of Pennsylvania Press.

Abstract: This paper contrasts the process of urbanization in China and in India and the differing outcomes in terms of the provision of urban infrastructure and the development of informality in each country. Differences in the role of local financing and governance structures help explain extraordinary differences in per capita levels of infrastructure and in levels of informality in urban real estate and labor markets. In China, multiple incentives for local urban growth, combined with the practice of Hukou—the limitation of access to the rapidly developing cities—has resulted in massive growth of a formally housed new urban middle class. In India, on the other hand, urbanization, although slower, occurs outside of formal institutional processes without adequate financing and delivery of public goods and services, resulting in largescale informality. The paper concludes with a comparison of the challenges faced by China and India in managing urban growth.

Past Courses

BEPP236 INT HOUSING COMPARISONS

This course analyzes housing finance systems and housing market outcomes across the globe. In the US, the course focuses on development of securitization markets and addresses current challenges of housing finance reform, including the future of Fannie Mae and Freddie Mac. Internationally, the course covers issues of access to housing and housing informality in developing countries, financial crises arising out of the housing sector, and potential marketoriented and public policy solutions. The course features a wide array of speakers in finance, government and academia who contribute their perspectives to pressing issues of mortgage market design.

BEPP836 INT'L HOUSING COMPARISNS

This course analyzes housing finance systems and housing market outcomes across the globe. In the US, the course focuses in development of securitization markets and addresses current challenges of housing finance reform, including the future of Fannie Mae and Freddie Mac. Internationally, the course covers issues of access to housing and housing informality in developing countries, financial crises arising out of the housing sector, and potential marketoriented and public policy solutions. The course features a wide array of speakers in finance, government and academia who contribute their perspectives to pressing issues of mortgage market design.

FNCE399 INDEPENDENT STUDY

Integrates the work of the various courses and familiarizes the student with the tools and techniques of research.

FNCE899 INDEPENDENT STUDY

Independent Study Projects require extensive independent work and a considerable amount of writing. ISP in Finance are intended to give students the opportunity to study a particular topic in Finance in greater depth than is covered in the curriculum. The application for ISP's should outline a plan of study that requires at least as much work as a typical course in the Finance Department that meets twice a week. At a minimum, we need a description of the methodology you intend to employ, a bibliography and description of the data that you will use as well as a list of interim deliverables and dates to ensure that you complete the project within the semester. Applications for FNCE 899 ISP's will not be accepted after the THIRD WEEK OF THE SEMESTER. You must submit your Finance ISP request using the Finance Department's ISP form located at https://fnce.wharton.upenn.edu under the Course ISP section

REAL215 URBAN REAL ESTATE ECON

Urban Real Estate Economics uses economic concepts to analyze real estate markets, values and trends. The course focuses on market dynamics in the U.S. and internationally, with an emphasis on how urban growth and local and federal government policies impact urban development and real estate pricing. A group development project gives hands on experience, and invited guest speakers bring industry knowledge. Besides the group project and presentation, problem sets are required along with a midterm and an optional second exam.

REAL236 INT'L HOUSING COMPARISNS

This course analyzes housing finance systems and housing market outcomes across the globe. In the US, the course focuses on the development of securitization markets and addresses the current challenges of housing finance reform, including the future of Fannie Mae and Freddie Mac. Internationally, the course covers issues of access to housing and housing informality in developing countries, financial crises arising out of the housing sector, and marketoriented and public policy solutions. The course features a wide array of speakers in finance, government and academia who contribute their perspectives to pressing issues of mortgage market design.

REAL399 INDEPENDENT STUDY

All independent studies must be arranged and approved by a Real Estate department faculty member with the exception of the Annual Student Research Competition. ,Annual Student Research Seminar: This class meets in the Spring semester to analyze how to conduct research in the real estate market where to find data; how to critique research; how to frame research questions; how to write a business research report; how to present a business research report. Topics are provided each year. For more information regarding the Annual Student Research Competition see the Real Estate Department's website: http://realestate.wharton.upenn.edu/.

REAL724 URBAN REAL ESTATE ECON

Urban Real Estate Economics uses economic concepts to analyze real estate markets, values, and trends. The course focuses on market dynamics in the U.S. and internationally, with an emphasis on how urban growth and local and federal government policies impact urban development and real estate pricing. A group development project gives hands on experience, and invited guest speakers bring industry knowledge. Besides the group project and presentation, problem sets are required along with a midterm and optional second exam.

REAL836 INT'L HOUSING COMPARISNS

This course analyzes housing finance systems and housing market outcomes across the globe. In the US, the course focuses on development of securitization markets and addresses current challenges of housing finance reform, including the future of Fannie Mae and Freddie Mac. Internationally, the course covers issues of access to housing and housing informality in developing countries, financial crises arising out of the housing sector, and potential marketoriented and public policy solutions. The course features a wide array of speakers in finance, government and academia who contribute their perspectives to pressing issues of mortgage market design.

REAL899 INDEPENDENT STUDY

All independent studies must be arranged and approved by a Real Estate Department faculty member with the exception of the Annual Student Research Competition. Annual Student Research Seminar: This class meets in the Spring semester to analyze how to conduct research in the real estate market, where to find data; how to critique research; how to frame research questions; how to write a business research report; how to present a business research report. Topics are provided each year. For further information regarding the Annual Student Research Competition see the Real Estate department's website: http://realestate.wharton.upenn.edu/

REAL945 URBAN REAL ESTATE ECON

Urban Real Estate Economics uses economic concepts to analyze real estate markets, values, and trends. The course focuses on market dynamics in the U.S. and internationally, with an emphasis on how urban growth and local and federal government policies impact urban development and real estate pricing. A group development project gives hands on experience, and invited guest speakers bring industry knowledge. Besides the group project and presentation, problem sets are required along with a midterm and optional second exam. ,All PhD students will be expected to complete a research paper in addition to the successful completion of the course examination requirements.

American Real Estate and Urban Economics Lifetime Achievement Award, 2005 Presidential Appointment, Senate Confirmation, Assistant Secretary, HUD, 1998 Best Published Paper (Real Estate Economics), 1996

“World’s Biggest Property Binge is Coming to a City Near You”, Bloomberg TV for the show “What’d You Miss?” 11/22/2016 Description

Dr. Wachter was interviewed by Bloomberg TV for the show “What’d You Miss?” during which she discussed her article published by Bloomberg News titled “World’s Biggest Property Binge is Coming to a City Near You” on November 22, 2016.

“In shift, Airbnb agrees to San Francisco regs,”, USA Today 11/14/2016 Trenton Can Use This As A Blueprint For Its Future, NJ.com 10/31/2016 Zombie Properties Returning to Life, Marketplace 09/08/2016 How to Prevent the Next Housing Crisis, The Fiscal Times 08/24/2016 Lopsided Housing Rebound Leaves Millions of People Out in the Cold, Wall Street Journal 08/11/2016 Why We May See a ‘Generation of Permanent Renters’, The Daily Caller 08/08/2016 SuperFast Mortgage Approval and Zero Down. Say What?, Marketplace 07/27/2016 A Roaring Trade: Chinese Tiger Mums Start a CollegeTown Housing Boom, The Economist 06/18/2016 Interview on the Global Rental Housing Market, CCTV 06/09/2016 American Housing Prices Going Big Again, NPR 06/02/2016 By One Measure, that MillionDollar Home in San Francisco Isn’t as Expensive as it Seems, Marketplace 05/30/2016 Homeownership Rates Are Falling, and It’s Not Just a Millennial Problem, Forbes 05/06/2016 Tiny Is the New Big: The Next Wave of SpaceDefying, Affordable Homes, Realtor.com 04/14/2016 Why Aren’t New Homes Going Up That Millennials Can Afford?, Realtor.com 04/06/2016 Are Bespoke Tranche Opportunities Dangerous? They Pose A Risk – Just Not Right Away., Bustle 04/05/2016 2016’s Property Taxes By State, WalletHub 03/09/2016 Which Region Is Poised to See the Most Home Sales?, Realtor.com 02/29/2016 Budget Stalemate Puts Damper on Developers’ Plans for Philadelphia., Philadelphia Inquirer 02/24/2016 Is ‘The Big Short’ Right About Bespoke Tranche Opportunities? Experts Weigh in On the Film’s Alarming Ending, Bustle 02/09/2016 Is the Shady Stuff From “The Big Short” Era Still Going On?, Time 12/24/2015 The Vast Inequality of rental inflation, Marketplace 11/06/2015 Outlook on the U.S. Housing Market, Bloomberg Television 10/19/2015 Shopping for a House? Check Out the Garden., Marketplace 10/15/2015 Renting Vs. Buying, CNBC 09/22/2015 Is Housing the Engine Driving U.S. Economic Growth?, Bloomberg Television 08/25/2015 How Cities Are Starting to Turn Back Decades of Creeping Urban Blight, The Washington Post 05/20/2015 Spring Housing Outlook: For Some, a Window of Opportunity, MainStreet.com 03/23/2015 The Housing Market is Still Struggling, Marketplace 02/24/2015 Moonlighting No Help to Americans Seeking to Buy a Home, Bloomberg 11/25/2014 Why Homeownership Isn’t Catching Up with The Rest of the Economy, NPR 10/30/2014 More Money Down Adds to U.S. FirstTime Buyer Blues, Bloomberg 08/14/2014 Housing’s Bad Month, Via the Letter ‘L’, Marketplace 04/01/2014 RealEstate Tech Takes NYC, Wall Street Journal 01/05/2014 Your Money: Aftermath of a U.S. government default, Philadelphia Inquirer 10/17/2013 Re/Max Gains After $220 Million IPO Priced Above Target, Bloomberg 10/02/2013 Why the Commercial Real Estate Crash Never Came, Fortune 09/23/2013 Housing Boom or Bubble?, CNBC 09/11/2013 American Realtor’s Worries Amid Home Buying Spree, Xinhua 08/25/2013 Banks Sue a California City Trying to Take Over Underwater Mortgages, American Public Media's Marketplace 08/08/2013 The Real Estate Ripple Effect, BBC News/Online 07/31/2013 Stable, Affordable Federal Financing for Homes, New York Times 06/20/2013 Detroit Survival Depends on Speed of Destruction, Bloomberg 05/30/2013 Wall Street Revives Foreclosed Homes as Rentals, American Public Media's Marketplace 05/03/2013 Housing Rebound is Facing Obstacle: Too Few Homes, Associated Press 05/01/2013 What’s Hot in Housing Trends These Days?, American Public Media's Marketplace 04/16/2013 Street Signs: Is Housing Market Back?, CNBC 02/26/2013 Home Prices Start to Climb Again, American Public Media's Marketplace 02/01/2013 New Mortgage Rules Would Limit Risky Lending, NPR 01/10/2013 Wachter: Bank Lending Key to Housing Recovery, Fox Business Network 01/07/2013 Homeownership Sparks Economy in Many Ways, American Public Media's Marketplace 12/26/2012 Experts Discuss Health of the Federal Housing Authority, CSpan 11/30/2012 Shelter Crisis After the Storm, Reuters Television 11/05/2012 The Housing Disconnect, CNBC 10/24/2012 Obama’s Plan To Target Foreclosed Properties Depends On A Broader Recovery, Huffington Post 09/10/2011 U.S. Housing Market, Outlook, Bloomberg Television 08/17/2011 Street Signs, CNBC 07/26/2011 Street Signs, CNBC 06/21/2011 Comments on U.S. Housing Prices and Home Ownership Rates., NBC Nightly News 05/31/2011 Nightly Business Report, PBS 10/18/2010 Foreclosure Errors May Cloud Ownership of U.S. Homes, BusinessWeek.com 10/01/2010 How the 30year mortgage came to be, Marketplace Public Radio 09/15/2010 Banks’ Plans for Foreclosed Homes Will Drive Market, Wall Street Journal 09/13/2010 Crisis of Confidence, CNBC, "Street Signs" 08/25/2010 Dismal Home Sales Report Renews Economic Recovery Concerns, PBS, "News Hour" 08/24/2010 Saving Fannie & Freddie, CNBC, “Squawk Box" 08/17/2010

Knowledge @ Wharton

A New Chance for Housing Finance Reform, Knowledge @ Wharton 08/23/2016 Back to the Future: GE’s Retooling into an Industrial Powerhouse, Knowledge @ Wharton 05/12/2015 Gaining Traction: Fannie and Freddie Flirt with Reprivatization, Knowledge @ Wharton 04/17/2015 Who Will Survive the Great Mall Shakeout?, Knowledge @ Wharton 03/31/2015 Underfunded Pensions: Tackling an ‘Invisible’ Crisis, Knowledge @ Wharton 01/26/2015 The ZillowTrulia Merger: A Sign of Bigger Changes on the Way, Knowledge @ Wharton 07/28/2014 The Financial Crisis in Retrospect: What Have We Learned?, Knowledge @ Wharton 09/18/2013 Zillow CEO Spencer Rascoff: Pulling Back the Veil on the Housing Market, Knowledge @ Wharton 04/24/2013 Research Roundup: The Financial Impact of Social Impact, Knowledge @ Wharton 04/10/2013 What Now, Mr. President?, Knowledge @ Wharton 11/07/2012 Why the U. S. Housing Market Is Poised to Enter a ‘Virtuous Cycle’, Knowledge @ Wharton 10/10/2012 Why the Housing Market Is Poised to Enter a ‘Virtuous Cycle’, Knowledge @ Wharton 09/26/2012 Optimism Is Up, but the U.S. Housing Market Faces a Painful Shift, Knowledge @ Wharton 04/25/2012 Compromises Needed to Reduce Foreclosures, Knowledge @ Wharton 03/13/2012 Facebook Deals in the Virtual, but Its Expansion Has Real Impacts, Knowledge @ Wharton 03/06/2012 A Good Deal, for Whom?, Knowledge @ Wharton 02/13/2012 The Home Truths about NonBank Mortgage Lending in Mexico, Knowledge @ Wharton 10/05/2011 Labor Day 2011: Not Everyone Will Be Celebrating, Knowledge @ Wharton 09/02/2011 The Economy: When Will Happy Days Be Here Again?, Knowledge @ Wharton 06/08/2011 Revitalizing the Private Mortgage Market: ‘Skin in the Game’ and the Consequences for Future Homebuyers, Knowledge @ Wharton 05/11/2011 What the Demise of Fannie Mae and Freddie Mac Means for the Future of Homeownership?, Knowledge @ Wharton 03/30/2011 What the Demise of Fannie Mae and Freddie Mac Means for the Future of Homeownership, Knowledge @ Wharton 03/16/2011 Aiming to Bolster a Lagging Real Estate Market, Dubai Introduces Islamic REITs, Knowledge @ Wharton 03/08/2011 No Easy Answers: Decoding the Economy’s Mixed Messages, Knowledge @ Wharton 02/16/2011 ‘A Major Transformation’: The Pros and Cons of the DoddFrank Act, Knowledge @ Wharton 01/11/2011 The Global Economy in 2011: A Rocky Ride or Smoother Sailing Ahead?, Knowledge @ Wharton 01/05/2011 China’s Property Bubble: Can It Be Deflated Safely, or Will It Burst?, Knowledge @ Wharton 12/28/2010 Falling Prices, Foreclosures and Fear: What’s Next for the Housing Market?, Knowledge @ Wharton 10/27/2010 The Walls Keep Tumbling Down: Foreclosure Flap and Other Housing Industry Woes, Knowledge @ Wharton 10/13/2010 ‘ A Major Transformation’: The Pros and Cons of the DoddFrank Act, Knowledge @ Wharton 09/07/2010 Will the Economic Recovery Run Out of Steam?, Knowledge @ Wharton 07/21/2010 Regulating the Unknown: Can Financial Reform Prevent Another Crisis?, Knowledge @ Wharton 06/09/2010 Tentatively and Sporadically, Real Estate Investing in the U.S. Makes a Comeback, Knowledge @ Wharton 01/06/2010 Reading the Economic Tea Leaves — and Employment Outlook — to Find Signs of Recovery, Knowledge @ Wharton 12/09/2009 Tentatively and Sporadically, Real Estate Investing Makes a Comeback, Knowledge @ Wharton 11/24/2009 On Shaky Ground: Commercial Real Estate Faces Financial Tremors, Knowledge @ Wharton 07/22/2009 The $2 Trillion Question: Will Investors Buy the Government’s Toxic Asset Plan?, Knowledge @ Wharton 04/01/2009 Are ‘Marktomarket’ Accounting Rules on the Mark?, Knowledge @ Wharton 04/01/2009 The Fairness Issue: How to Cope with the Flood of Foreclosures, Knowledge @ Wharton 11/26/2008 Wharton Faculty Debate the Impact of the Financial Crisis, Knowledge @ Wharton 09/17/2008 After the Bailout: How Can the Fed Clean Up the Fannie and Freddie Mess?, Knowledge @ Wharton 09/17/2008 Subprime Crisis: Could New Rules Avert Another Credit Crisis? Perhaps, but Be Wary, Knowledge @ Wharton 06/20/2008 Credit Crisis Interview: Susan Wachter on Securitizations and Deregulation, Knowledge @ Wharton 06/20/2008 Coming Soon … Securitization with a New, Improved (and Perhaps Safer) Face, Knowledge @ Wharton 04/02/2008 Mortgage Crisis Bailout: Relief for Some, Risk for Others, Knowledge @ Wharton 03/05/2008 How We Got into the Subprime Lending Mess, Knowledge @ Wharton 09/19/2007 Could Tremors in the Subprime Mortgage Market Be the First Signs of an Earthquake?, Knowledge @ Wharton 02/21/2007 Going Up: Real Estate Is on the Rise Again in Japan, Knowledge @ Wharton 11/29/2006 Protecting the Value of Real EstateRich Portfolios, Knowledge @ Wharton 03/15/2006 Could Risky Mortgage Lending Practices Prick the Housing Bubble?, Knowledge @ Wharton 09/21/2005