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Public Housing Quotas and Segregation

Author

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  • Benoît Schmutz

    (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS and Georgetown University)

Abstract

This paper adapts a framework à-la Hotelling to an urban context in order to study the impact of public housing on the level of segregation in a fixed-size city where consumers differ both in income and taste. In this city, the market allocation of the population is characterized by partial segregation: both rich and poor consumers can be found in both neighborhoods. Public authorities replace a fraction of the housing stock with public housing. This policy will not decrease segregation if applicants are not screened according to their income level. Any departure from the optimal level of screening has to be compensated for by a larger program. The final policy mix will then be determined by the extent to which public authorities have the ability, either to screen applicants, or to fund more public units. However, this trade-off will be softened when taking neighborhood externalities into account, thanks to a snowball effect of public housing on neighborhood quality.

Suggested Citation

  • Benoît Schmutz, 2012. "Public Housing Quotas and Segregation," AMSE Working Papers 1228, Aix-Marseille School of Economics, France.
    • Handle: RePEc:aim:wpaimx:1228
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    References listed on IDEAS

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    1. Heffley, Dennis, 1998. "Landlords, tenants and the public sector in a spatial equilibrium model of rent control," Regional Science and Urban Economics, Elsevier, vol. 28(6), pages 745-772, November.
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    5. Baum-Snow, Nathaniel & Marion, Justin, 2009. "The effects of low income housing tax credit developments on neighborhoods," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 654-666, June.
    6. Schmidheiny, Kurt, 2006. "Income segregation from local income taxation when households differ in both preferences and incomes," Regional Science and Urban Economics, Elsevier, vol. 36(2), pages 270-299, March.
    7. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
    8. Epple, Dennis & Platt, Glenn J., 1998. "Equilibrium and Local Redistribution in an Urban Economy when Households Differ in both Preferences and Incomes," Journal of Urban Economics, Elsevier, vol. 43(1), pages 23-51, January.
    9. Benabou, Roland, 1996. "Heterogeneity, Stratification, and Growth: Macroeconomic Implications of Community Structure and School Finance," American Economic Review, American Economic Association, vol. 86(3), pages 584-609, June.
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    Cited by:

    1. is not listed on IDEAS
    2. Gregory Verdugo & Sorana Toma, 2018. "Can Public Housing Decrease Segregation? Lessons and Challenges From Non-European Immigration in France," Demography, Springer;Population Association of America (PAA), vol. 55(5), pages 1803-1828, October.
    3. repec:spo:wpmain:info:hdl:2441/1ck6j135a79b5pqdagv8visfep is not listed on IDEAS
    4. repec:spo:wpmain:info:hdl:2441/31cfdhnp1f8asp29hjnqv33slt is not listed on IDEAS
    5. Benoît Schmutz, 2015. "Spatial sorting of African Immigrants in the French Public Housing Market," The Review of Black Political Economy, Springer;National Economic Association, vol. 42(3), pages 247-270, September.

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    Keywords

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    JEL classification:

    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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