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Delivering affordable housing and neighborhood quality: A comparison of place- and tenant-based programs

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  • Eerola, Essi
  • Saarimaa, Tuukka

Abstract

This paper analyzes the relative merits of large place- and tenant-based housing programs in Finland in terms of housing affordability and neighborhood quality. Using hedonic regression methods and household micro data, we find that the rent savings to public housing tenants are considerable and comparable in size to the housing allowance. Furthermore, this public housing subsidy is less targeted towards low-income households than the housing allowance. At the same time, low-income public housing tenants live in poorer, less educated and lower quality neighborhoods than similar low-income households living in private rental housing. This suggests that place-based programs may lead to more segregation than tenant- based alternatives even when neighborhood mixing is an explicit aim of the program, as is the case in Finland.

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  • 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.
    • Handle: RePEc:eee:jhouse:v:42:y:2018:i:c:p:44-54
    DOI: 10.1016/j.jhe.2017.12.001
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    2. Oskari Harjunen & Mika Kortelainen & Tuukka Saarimaa, 2018. "Best Education Money Can Buy? Capitalization of School Quality in Finland," CESifo Economic Studies, CESifo Group, vol. 64(2), pages 150-175.
    3. Oskari Harjunen & Tuukka Saarimaa & Janne Tukiainen, 2021. "Love Thy (Elected) Neighbor? Residential Segregation, Political Representation and Local Public Goods," Discussion Papers 138, Aboa Centre for Economics.
    4. Chapelle, Guillaume & Domènech Arumí, Gerard & Gobbi, Paula Eugenia, 2023. "Housing, Neighborhoods and Inequality," CEPR Discussion Papers 17969, C.E.P.R. Discussion Papers.
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    6. Cheshire, Paul C. & Hilber, Christian A. L., 2018. "Housing in Europe: a different continent - a continent of differences," LSE Research Online Documents on Economics 90645, London School of Economics and Political Science, LSE Library.
    7. Bratu, Cristina & Harjunen, Oskari & Saarimaa, Tuukka, 2021. "City-wide effects of new housing supply: Evidence from moving chains," Working Papers 146, VATT Institute for Economic Research.

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    More about this item

    Keywords

    Hedonic regression; Housing allowance; Place-based policy; Public housing;
    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

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