This report examines the current literature on rental housing markets and on housing policies for low-income renters in an attempt to answer a fundamental question. The question is what constitutes the most effective use of government subsidies that are made available for the production of rental housing. This discussion is not intended to be a continuation of the debate over whether demand or supply-side subsidies generally represent a better policy. Rather it starts from the premise that production subsidies are relatively better used in some circumstances than in others. Our objective is to identify those circumstances more precisely, so that government policy-makers and others can make good decisions about how to use the resources of housing production programs for low-income renters.
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