I describe two studies on housing market and wealth inequality. In Chapter

1, I study the impact of changes in U.S. housing policy - down payment requirements

and the mortgage interest deduction - on the wealth distribution through

transitions in housing tenure and asset allocation. I build a simple three-period

overlapping generations model that features endogenous rental supply and voluntary

bequests, and analyze its steady state. I show how down payment requirements

can affect the housing market and the wealth distribution: for example, if the down

payment ratio falls from 0.2 to 0.1, the homeownership rate increases by 5.6% and

the wealth Gini index decreases. In an alternative experiment, when only owneroccupiers

are allowed to borrow using a lowered down payment ratio, the effects on

the housing market and wealth distribution become smaller, with less distortion in

the rental market. Finally, when the home mortgage interest deduction is repealed,

housing demand drops and wealth inequality increases, as only wealthy households

can become homeowners.

Chapter 2 studies the impact of a unique property tax scheme in South Korea

on the housing market and wealth inequality. A recent change to Korea’s property

tax levies a heavy property tax on multiple home owners. The policy objective is

to decrease wealth inequality by penalizing wealthy homeowners who own multiple

houses. I build an eight period dynamic lifecycle model with a housing tenure choice

to study the distributional effects of the Korean property tax scheme. I conduct a

counterfactual experiment which discriminates among homeowners by their units of

owned housing with two different property tax rates and compare outcomes to the

benchmark economy. While the alternative property tax scheme actually decreases

wealth inequality, the magnitude of the effect is very small.