Building without income mixing: Public housing quotas in France

We study the effects of the SRU law introduced in France in December 2000 to support scattered development of public housing in cities and favor social mixity. This law imposes 20% of public dwellings to all medium and large municipalities of large-enough cities, with fees for those not abiding by the law. Using exhaustive fiscal data, we evaluate the effects of the law over the 1996-2008 period using a difference-in-differences approach at the municipality and neighborhood levels. We find that the law stimulated public housing construction in treated municipalities, but only slightly increased the presence of low-income households. Indeed, new public dwellings enter categories to which medium-income are eligible and most additional occupants are not poor. Within municipalities, the policy decreased public housing segregation but it barely decreased low-income segregation. This comes from local authorities increasing over time the presence of public dwellings in neighborhoods away from existing public housing but in places concentrating low-income households.