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Large-scale affordable housing construction and public goods provision: evidence from Iran†

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Listed:
  • Saeed Tajrishy
  • Mohammad Vesal

Abstract

Affordable housing projects may affect neighboring property values. Negative spillovers are more likely in developing countries because governments may fail to provide complementary infrastructures such as schools. We study one of the world’s largest affordable housing projects, the Mehr housing project in Iran, which facilitated the construction of 2 million affordable apartments. Using the universe of house transactions in nineteen large cities, we employ a difference-in-differences methodology to estimate the causal impact of Mehr on neighboring properties. Results show nearby housing prices fall by 11%. This negative effect fades away in neighborhoods that saw a proportionate expansion of schools.

Suggested Citation

  • Saeed Tajrishy & Mohammad Vesal, 2024. "Large-scale affordable housing construction and public goods provision: evidence from Iran†," Journal of Economic Geography, Oxford University Press, vol. 24(1), pages 171-189.
    • Handle: RePEc:oup:jecgeo:v:24:y:2024:i:1:p:171-189.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbad030
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    More about this item

    Keywords

    affordable housing; schooling; housing externality; Iran; Mehr housing project;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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