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The Impact of Housing Subsidies on the Rental Sector: the French Example

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  • C. GRISLAIN-LETRÉMY

    (Insee)

  • C. TREVIEN

    (Sciences Po et Crest-Insee)

Abstract

Housing subsidies to tenants are a main tool for housing policy in France. They aim to limit the budget share of housing for eligible tenants or to improve their housing conditions for a given budget share. Despite the increasing budget allocated to housing subsidies since the end of the 1970s, the budget share of housing for low-income tenants has kept increasing, in particular in the private rental sector. We assess the impact of housing subsidies on price, quality and quantity in the private rental sector. To do so, we use an instrumental variable method based on a spatial discontinuity in the subsidy scheme. We show that housing subsidies had an inflationist impact in the 1990s and the 2000s. Besides, higher subsidies seem to have almost no effect on housing quality and to have no impact on the number of offered rental dwellings.

Suggested Citation

  • C. Grislain-Letrémy & C. Trevien, 2014. "The Impact of Housing Subsidies on the Rental Sector: the French Example," Documents de Travail de l'Insee - INSEE Working Papers g2014-08, Institut National de la Statistique et des Etudes Economiques.
    • Handle: RePEc:nse:doctra:g2014-08
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    Cited by:

    1. Sayag, Doron & Zussman, Noam, 2020. "Who benefits from rental assistance? Evidence from a natural experiment," Regional Science and Urban Economics, Elsevier, vol. 80(C).
    2. Segú, Mariona & Vignolles, Benjamin, 2018. "Taxing Vacant Dwellings: Can fiscal policy reduce vacancy?," MPRA Paper 85508, University Library of Munich, Germany.
    3. Brewer, Mike & Browne, James & Emmerson, Carl & Hood, Andrew & Joyce, Robert, 2019. "The curious incidence of rent subsidies: Evidence of heterogeneity from administrative data," Journal of Urban Economics, Elsevier, vol. 114(C).
    4. Mariona Segú & Benjamin Vignolles, 2016. "Taxing Vacant Apartments: Can fiscal policy reduce vacancy?," Working Papers 2016.02, International Network for Economic Research - INFER.
    5. C. Labonne & C. Welter-Nicol, 2015. "MERCURE : Cheap Credit, Unaffordable Houses?," Débats économiques et financiers 20, Banque de France.
    6. Mayer, Thierry & Trevien, Corentin, 2017. "The impact of urban public transportation evidence from the Paris region," Journal of Urban Economics, Elsevier, vol. 102(C), pages 1-21.
    7. Doron Sayag & Noam Zussman, 2015. "The Distribution of Rental Assistance Between Tenants and Landlords:The Case of Students in Central Jerusalem," Bank of Israel Working Papers 2015.01, Bank of Israel.
    8. Huang, Donna & Ong, Rachel & Pawson, Hal & Singh, Ranjodh & Martin, Chris, 2020. "Demand-side assistance in Australia’s rental housing market: exploring reform options," SocArXiv w75yx, Center for Open Science.

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    More about this item

    Keywords

    housing subsidies; tax incidence;

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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