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Subsidized and Unsubsidized Housing Stocks 1935 to 1987: Crowding Out and Cointegration

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  • Murray, Michael P

Abstract

Crowding out arises in many economic contexts, from the macro concern that deficit spending might crowd out investment to the micro concern that increased employment of women might result in fewer jobs for men. Here I ask whether subsidized housing crowds out unsubsidized housing in the United States, applying the econometric tools of cointegration analysis. Such crowding out proves to require stringent restrictions on the coefficients of the cointegrating relationships that link housing stocks with one another and with other economic variables. These restrictions also apply to testing for other crowding out phenomena. I find that public housing has steadily added to the total stock of housing since its inception in 1935. In contrast, I find that moderate-income, conventionally financed, subsidized housing, such as the Section 235 and 236 programs that accounted for more than 1.5 million new units between 1960 and 1987, most likely adds little or nothing to the total housing stock. These findings speak against recent proposals to provide subsidies to developers who build dwellings for moderate income Americans but offer qualified encouragement to those who advocate expansion of the conventional public housing program. Copyright 1999 by Kluwer Academic Publishers

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Bibliographic Info

Article provided by Springer in its journal Journal of Real Estate Finance & Economics.

Volume (Year): 18 (1999)
Issue (Month): 1 (January)
Pages: 107-24

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Handle: RePEc:kap:jrefec:v:18:y:1999:i:1:p:107-24

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Web page: http://www.springerlink.com/link.asp?id=102945

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Cited by:
  1. Malpezzi, Stephen & Vandell, Kerry, 2002. "Does the low-income housing tax credit increase the supply of housing?," Journal of Housing Economics, Elsevier, Elsevier, vol. 11(4), pages 360-380, December.
  2. Susin, Scott, 2002. "Rent vouchers and the price of low-income housing," Journal of Public Economics, Elsevier, vol. 83(1), pages 109-152, January.
  3. Jesse M. Cunha & Giacomo De Giorgi & Seema Jayachandran, 2011. "The Price Effects of Cash Versus In-Kind Transfers," NBER Working Papers 17456, National Bureau of Economic Research, Inc.
  4. Gabriel, Stuart A. & Rosenthal, Stuart S., 2010. "Do the GSEs expand the supply of mortgage credit? New evidence of crowd out in the secondary mortgage market," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 975-986, December.
  5. Sock Yong Phang, 2009. "Affordable homeownership policy: implications for housing markets," Working Papers 14-2009, Singapore Management University, School of Economics, revised Nov 2009.
  6. Sinai, Todd & Waldfogel, Joel, 2005. "Do low-income housing subsidies increase the occupied housing stock?," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2137-2164, December.
  7. Wigren, Rune & Wilhelmsson, Mats, 2007. "Construction investments and economic growth in Western Europe," Journal of Policy Modeling, Elsevier, Elsevier, vol. 29(3), pages 439-451.
  8. Laferrere, Anne & Le Blanc, David, 2004. "How do housing allowances affect rents? An empirical analysis of the French case," Journal of Housing Economics, Elsevier, Elsevier, vol. 13(1), pages 36-67, March.
  9. Nordvik, Viggo, 2006. "Selective housing policy in local housing markets and the supply of housing," Journal of Housing Economics, Elsevier, Elsevier, vol. 15(4), pages 279-292, December.
  10. Eriksen, Michael D. & Rosenthal, Stuart S., 2010. "Crowd out effects of place-based subsidized rental housing: New evidence from the LIHTC program," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 953-966, December.
  11. Lee, Chul-In, 2007. "Does provision of public rental housing crowd out private housing investment? A panel VAR approach," Journal of Housing Economics, Elsevier, Elsevier, vol. 16(1), pages 1-20, March.
  12. Freedman, Matthew & Owens, Emily G., 2011. "Low-income housing development and crime," Journal of Urban Economics, Elsevier, vol. 70(2), pages 115-131.
  13. Janet Currie & Firouz Gahvari, 2008. "Transfers in Cash and In-Kind: Theory Meets the Data," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 333-83, June.
  14. He, Yinghua & O'Flaherty, Brendan & Rosenheck, Robert A., 2010. "Is shared housing a way to reduce homelessness? The effect of household arrangements on formerly homeless people," Journal of Housing Economics, Elsevier, Elsevier, vol. 19(1), pages 1-12, March.

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