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Impact of a Housing Tax Credit on Local Housing Markets: Evidence from France

Author

Listed:
  • Guillaume Chapelle
  • Benjamin Vignolles
  • Clara Wolf

Abstract

Housing Tax Credits are a popular tool designed to increase the construction of affordable housing units for low and medium income tenants. Several papers in the US, however, document the lacklustre performance of such programs that represent an important amount of public expenditures. In this paper, we exploit a quasi-natural experiment in France (the removal of the Borloo and Robien policies on part of the territory with the implementation of the Scellier Tax Credit (STC)), to identify the impact of such policies on local housing markets. We find that the removal of these tax credits decelerated house prices and lowered the vacancy rate in new dwellings without reducing the production of new housing units. Finally, the income profile of tenants in new dwellings remained unaffected.

Suggested Citation

  • Guillaume Chapelle & Benjamin Vignolles & Clara Wolf, 2018. "Impact of a Housing Tax Credit on Local Housing Markets: Evidence from France," Annals of Economics and Statistics, GENES, issue 130, pages 101-131.
  • Handle: RePEc:adr:anecst:y:2018:i:130:p:101-131
    DOI: 10.15609/annaeconstat2009.130.0101
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    File URL: https://www.jstor.org/stable/10.15609/annaeconstat2009.130.0101
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    More about this item

    Keywords

    Housing Supply; Real Estate Markets; Tax Credit; Subsidies.;

    JEL classification:

    • 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
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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