Title: Politics and the Price of Housing

Abstract: We examine how congressional representation affects local housing markets through its influence on housing finance. Using the near-universe of U.S. housing transactions from 1990 to 2020 linked to congressional districts, we exploit the staggered entry and exit of representatives from the House Financial Services Committee (FSC) as plausibly exogenous shocks to their influence over housing and mortgage policy. A border design comparing properties within five kilometers of adjacent districts holds local economic conditions constant. House prices increase by about 4 percent when a district's representative joins the FSC and decline by a similar amount when the representative leaves. These effects coincide with higher mortgage origination, greater government-sponsored enterprise (GSE) purchases, and higher conforming loan limits, but no change in construction activity or allocations of Low-Income Housing Tax Credit programs. Representation on the FSC affects local housing markets primarily through credit supply, leading to localized changes in property values.

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