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Low-income housing in high-amenity areas: Long-run impacts on residential development

Author

Listed:
  • Paul Thorsnes

    () (Department of Economics, University of Otago)

  • Robert Alexander

    () (University of the Sunshine Coast)

  • David Kidson

    () (New Zealand Treasury)

Abstract

Centre-left governments from the 1940s into the 1970s developed several large areas in the urban fringe of Dunedin, New Zealand for low-density, mostly single-family public rental housing. The public housing in these areas is now accessible, well endowed with natural amenities, and allocated to very low-income households. Analysis of sales of private housing reveals the expected discount on sales of nearby houses. But analysis of the influence of spatial variation in natural amenities on incomes and structural characteristics indicates large-scale effects of the public housing developments: diversion of higher-income housing to other suburban areas and possibly maintenance of older high-quality housing in central areas. Interestingly, centre-right governments may have opened the door to market forces by encouraging tenants to purchase their public rental house. We find evidence that the recent increase in house prices has encouraged relatively high income households to purchase exstate rentals in these high natural amenity areas.

Suggested Citation

  • Paul Thorsnes & Robert Alexander & David Kidson, 2011. "Low-income housing in high-amenity areas: Long-run impacts on residential development," Working Papers 1115, University of Otago, Department of Economics, revised Dec 2011.
  • Handle: RePEc:otg:wpaper:1115
    as

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    File URL: http://www.otago.ac.nz/economics/research/otago076673.pdf
    File Function: First version, 2011
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    foreign aid; poverty; well-being; growth; wealth; health; education; mortality; fertility;

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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