IDEAS home Printed from https://ideas.repec.org/p/fer/wpaper/68.html
   My bibliography  Save this paper

Who Benefits from Public Housing?

Author

Listed:
  • Eerola, Essi
  • Saarimaa, Tuukka

Abstract

This paper studies how much public housing generates rent savings for the tenants, how these savings are distributed among the tenants, and whether the tenants reside in better quality neighborhoods than similar low-income private rental tenants. Our rent savings estimates are based on a hedonic regression and detailed data on the private and public rental housing units from the city of Helsinki. We estimate that the total subsidy to public housing tenants is considerable and comparable in size to the housing allowance, the main tenant-based housing program. We also find that the subsidy is less targeted towards low-income households than the housing allowance. Regarding neighborhood quality, we find that public housing tenants live in lower quality neighborhoods than similar households living in private rental housing. This result suggests that public housing is not better than the housing allowance in delivering better neighborhood quality to low-income households.

Suggested Citation

  • Eerola, Essi & Saarimaa, Tuukka, 2015. "Who Benefits from Public Housing?," Working Papers 68, VATT Institute for Economic Research.
  • Handle: RePEc:fer:wpaper:68
    as

    Download full text from publisher

    File URL: https://www.doria.fi/handle/10024/148725
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Scanlon, Kathleen & Fernández Arrigoitia, Melissa & Whitehead, Christine M E, 2015. "Social housing in Europe," LSE Research Online Documents on Economics 62938, London School of Economics and Political Science, LSE Library.
    2. le Blanc, David & Laferrere, Anne, 2001. "The Effect of Public Social Housing on Households' Consumption in France," Journal of Housing Economics, Elsevier, vol. 10(4), pages 429-455, December.
    3. Horn, Keren Mertens & Ellen, Ingrid Gould & Schwartz, Amy Ellen, 2014. "Do Housing Choice Voucher holders live near good schools?," Journal of Housing Economics, Elsevier, vol. 23(C), pages 28-40.
    4. Bayer, Patrick & McMillan, Robert, 2012. "Tiebout sorting and neighborhood stratification," Journal of Public Economics, Elsevier, vol. 96(11), pages 1129-1143.
    5. Edward L. Glaeser & Erzo F. P. Luttmer, 2003. "The Misallocation of Housing Under Rent Control," American Economic Review, American Economic Association, vol. 93(4), pages 1027-1046, September.
    6. Eriksen, Michael D. & Rosenthal, Stuart S., 2010. "Crowd out effects of place-based subsidized rental housing: New evidence from the LIHTC program," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 953-966, December.
    7. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    8. repec:zbw:bofrdp:urn:nbn:fi:bof-201508211365 is not listed on IDEAS
    9. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 349-404, Elsevier.
    10. Paul Cheshire & Steve Gibbons & Ian Gordon, 2008. "Policies for Mixed Communities: A Critical Evaluation," SERC Policy Papers 002, Centre for Economic Performance, LSE.
    11. Galster, George & Andersson, Roger & Musterd, Sako & Kauppinen, Timo M., 2008. "Does neighborhood income mix affect earnings of adults? New evidence from Sweden," Journal of Urban Economics, Elsevier, vol. 63(3), pages 858-870, May.
    12. 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.
    13. repec:zbw:bofrdp:2015_001 is not listed on IDEAS
    14. Seppo Honkapohja & Kaushik Mitra, 2015. "Comparing Inflation and Price-Level Targeting: The Role of Forward Guidance and Transparency," Manchester School, University of Manchester, vol. 83, pages 27-59, December.
    15. Early, Dirk W., 2000. "Rent Control, Rental Housing Supply, and the Distribution of Tenant Benefits," Journal of Urban Economics, Elsevier, vol. 48(2), pages 185-204, September.
    16. Lui, Hon-Kwong & Suen, Wing, 2011. "The effects of public housing on internal mobility in Hong Kong," Journal of Housing Economics, Elsevier, vol. 20(1), pages 15-29, March.
    17. Robert Collinson & Ingrid Gould Ellen & Jens Ludwig, 2015. "Low-Income Housing Policy," NBER Chapters, in: Economics of Means-Tested Transfer Programs in the United States, Volume 2, pages 59-126, National Bureau of Economic Research, Inc.
    18. Robert Haveman & Barbara Wolfe, 2012. "Long-Term Effects of Public Low-Income Housing Vouchers: Work, Neighborhood, Family Composition and Childcare Usage," CEPR Discussion Papers 667, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    19. Hasan, Iftekhar & Massoud, Nadia & Saunders, Anthony & Song, Keke, 2015. "Which financial stocks did short sellers target in the subprime crisis?," Journal of Banking & Finance, Elsevier, vol. 54(C), pages 87-103.
    20. repec:zbw:bofrdp:2015_016 is not listed on IDEAS
    21. Delis, Manthos & Hasan, Iftekhar & Tsionas, Efthymios, 2015. "Banks’ Risk Endogenous to Strategic Management Choices," MPRA Paper 64907, University Library of Munich, Germany.
    22. repec:zbw:bofrdp:urn:nbn:fi:bof-201508211363 is not listed on IDEAS
    23. Gregory S. Burge, 2011. "Do Tenants Capture the Benefits from the Low‐Income Housing Tax Credit Program?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 39(1), pages 71-96, March.
    24. repec:zbw:bofrdp:urn:nbn:fi:bof-201504091146 is not listed on IDEAS
    25. repec:zbw:bofrdp:2015_006 is not listed on IDEAS
    26. repec:zbw:bofrdp:2015_018 is not listed on IDEAS
    27. repec:zbw:bofrdp:urn:nbn:fi:bof-201511261453 is not listed on IDEAS
    28. Delis, Manthos D. & Hasan, Iftekhar & Tsionas, Efthymios G., 2015. "Firms' risk endogenous to strategic management choices," Bank of Finland Research Discussion Papers 16/2015, Bank of Finland.
    29. Horn, Keren Mertens & Ellen, Ingrid Gould & Schwartz, Amy Ellen, 2014. "Reprint of “Do Housing Choice Voucher Holders Live Near Good Schools?”," Journal of Housing Economics, Elsevier, vol. 24(C), pages 109-121.
    30. Gilles Duranton & J. V. Henderson & William C. Strange (ed.), 2015. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 5, number 5.
    31. repec:zbw:bofrdp:2015_007 is not listed on IDEAS
    32. Carlson, Deven & Haveman, Robert & Kaplan, Thomas & Wolfe, Barbara, 2012. "Long-term effects of public low-income housing vouchers on neighborhood quality and household composition," Journal of Housing Economics, Elsevier, vol. 21(2), pages 101-120.
    33. Malpezzi, Stephen & Vandell, Kerry, 2002. "Does the low-income housing tax credit increase the supply of housing?," Journal of Housing Economics, Elsevier, vol. 11(4), pages 360-380, December.
    34. Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April.
    35. repec:zbw:bofrdp:2015_024 is not listed on IDEAS
    36. Sinai, Todd & Waldfogel, Joel, 2005. "Do low-income housing subsidies increase the occupied housing stock?," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2137-2164, December.
    37. repec:zbw:bofrdp:2015_004 is not listed on IDEAS
    38. repec:zbw:bofrdp:2015_009 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eerola, Essi & Saarimaa, Tuukka, 2018. "Delivering affordable housing and neighborhood quality: A comparison of place- and tenant-based programs," Journal of Housing Economics, Elsevier, vol. 42(C), pages 44-54.
    2. Olsen, Edgar O. & Zabel, Jeffrey E., 2015. "US Housing Policy," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 887-986, Elsevier.
    3. Tuukka Saarimaa & Essi Eerola, 2013. "Is Social Housing Affordable?," ERSA conference papers ersa13p927, European Regional Science Association.
    4. Christian A. L. Hilber & Olivier Schoni, 2022. "Housing policy and affordable housing," CEP Occasional Papers 56, Centre for Economic Performance, LSE.
    5. Lang, Bree J., 2015. "Input distortions in the Low-Income Housing Tax Credit: Evidence from building size," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 119-128.
    6. Rebecca Diamond & Tim McQuade, 2019. "Who Wants Affordable Housing in Their Backyard? An Equilibrium Analysis of Low-Income Property Development," Journal of Political Economy, University of Chicago Press, vol. 127(3), pages 1063-1117.
    7. Céline Grislain-Letrémy & Corentin Trevien, 2022. "The Long-Term Impact of Housing Subsidies on the Rental Sector: the French Example," Working papers 886, Banque de France.
    8. Robert Collinson & Ingrid Gould Ellen & Jens Ludwig, 2015. "Low-Income Housing Policy," NBER Chapters, in: Economics of Means-Tested Transfer Programs in the United States, Volume 2, pages 59-126, National Bureau of Economic Research, Inc.
    9. Eriksen, Michael D. & Lang, Bree J., 2020. "Overview and proposed reforms of the low-income housing tax credit program," Regional Science and Urban Economics, Elsevier, vol. 80(C).
    10. Daron Acemoglu & Ufuk Akcigit & Douglas Hanley & William Kerr, 2016. "Transition to Clean Technology," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 52-104.
    11. Aliprantis, Dionissi & Martin, Hal & Phillips, David, 2022. "Landlords and access to opportunity," Journal of Urban Economics, Elsevier, vol. 129(C).
    12. repec:zbw:bofrdp:2015_030 is not listed on IDEAS
    13. Ellen, Ingrid Gould, 2020. "What do we know about housing choice vouchers?," Regional Science and Urban Economics, Elsevier, vol. 80(C).
    14. Eerola, Essi & Saarimaa, Tuukka, 2015. "Who Benefits from Public Housing?," Working Papers 68, VATT Institute for Economic Research.
    15. Ellen, Ingrid Gould & Suher, Michael & Torrats-Espinosa, Gerard, 2019. "Neighbors and networks: The role of social interactions on the residential choices of housing choice voucher holders," Journal of Housing Economics, Elsevier, vol. 43(C), pages 56-71.
    16. Fredrik Andersson & John C. Haltiwanger & Mark J. Kutzbach & Giordano Palloni & Henry O. Pollakowski & Daniel H. Weinberg, 2013. "Childhood Housing and Adult Earnings: A Between-Siblings Analysis of Housing Vouchers and Public Housing," Working Papers 13-48, Center for Economic Studies, U.S. Census Bureau.
    17. Brian Asquith & Evan Mast & Davin Reed, 2019. "Supply Shock Versus Demand Shock: The Local Effects of New Housing in Low-Income Areas," Upjohn Working Papers 19-316, W.E. Upjohn Institute for Employment Research.
    18. Felipe Berrutti, 2016. "Subsidios a la oferta y decisiones de localización: El caso de la Ley de Vivienda de Interés Social," Documentos de Investigación Estudiantil (students working papers) 16-02, Instituto de Economía - IECON.
    19. Mihir Desai & Dhammika Dharmapala & Monica Singhal, 2010. "Tax Incentives for Affordable Housing: The Low Income Housing Tax Credit," NBER Chapters, in: Tax Policy and the Economy, Volume 24, pages 181-205, National Bureau of Economic Research, Inc.
    20. Ning Zhang, 2022. "In-kind housing transfers and labor supply: a structural approach," Economics Series Working Papers 992, University of Oxford, Department of Economics.
    21. repec:bof:bofrdp:urn:nbn:fi:bof-201512171488 is not listed on IDEAS
    22. Freedman, Matthew & Owens, Emily G., 2011. "Low-income housing development and crime," Journal of Urban Economics, Elsevier, vol. 70(2), pages 115-131.

    More about this item

    Keywords

    Hedonic regression; housing policy; public housing.; Income distribution; Tulonjako; Effectiveness of public services; Julkisten palvelujen vaikuttavuus; H220 - Taxation and Subsidies: Incidence; R210 - Urban; Rural; and Regional Economics: Housing Demand; R230 - Urban; Rural; and Regional Economics: Regional Migration; Regional Labor Markets; Population;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fer:wpaper:68. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anita Niskanen (email available below). General contact details of provider: https://edirc.repec.org/data/vatttfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.