The external effects of place-based subsidized housing (original) (raw)

Economic Impacts of Subsidized Housing Location

1997

Programs such as HUD's Moving to Opportunity are examples of an increased emphasis on use of Section 8 certificates and vouchers for acquisition of marketrate subsidized housing in place of traditional public housing. Research on the social impacts of family relocation from public housing in the inner city to marketrate housing in integrated neighborhoods have indicated favorable results.

Does federally subsidized rental housing depress neighborhood property values?

SSRN Electronic Journal, 2006

Few communities welcome federally subsidized housing, with one of the most commonly voiced fears being reductions in property values. Yet there is little empirical evidence that subsidized housing depresses neighborhood property values. This paper estimates and compares the neighborhood impacts of a broad range of federally-subsidized, rental housing programs, using rich data for New York City and a difference-in-difference specification of a hedonic regression model. We find that federally-subsidized developments have not typically led to reductions in property values and have in fact led to increases in many cases. Impacts are highly sensitive to scale, though patterns vary across programs. *We are grateful to the MacArthur Foundation for their generous financial support. We are also grateful to Wayne Archer, George Galster, and Ed Olsen for useful comments on an earlier draft.

Spatial Heterogeneity in Spillover Effects of Assisted and Unassisted Rental Housing

Journal of Urban Affairs, 2009

Three new contributions are added to the literature on subsidized rental housing impacts on nearby property values: 1) A primary focus on the spatial heterogeneity of these effects which warrants caution regarding citywide results; 2) an analysis by zoning area, and 3) a comparison of impacts with unsubsidized apartments. An adjusted-interrupted time series (difference-in-difference) model is estimated with a comprehensive dataset for Seattle, WA . Contrary to NIMBY expectations, the predominant impact is an upgrading effect of lower-value areas. However, spillover effects are very sensitive to how data are pooled across space: The citywide upgrading effects are driven by poorer pockets adjacent to affluent areas with no or small effects in more diverse low-and medium income areas. They only occur in single-family, not multi-family zones. The only negative effects were associated with vouchers in one of the affluent areas. Impacts of unsubsidized rentals are very similar to those of subsidized ones, suggesting an independent effect beyond subsidy status. These findings are explained with Seattle's dispersion and good neighbor policies, with gentrification pressures as a possible alternative explanation. Site visits confirmed the location of subsidized sites in lower-value areas and the higher maintenance quality of subsidized vis-à-vis unsubsidized units. [Keywords: rental spillover effects, subsidized housing, adjusted interrupted time series, difference-in-difference modeling, spatial heterogeneity, housing policy] "Not in My Backyard!" is the familiar battle cry of homeowners who fear a decline in property values and quality of life if their new neighbors are publicly subsidized tenants. In contrast, researchers are asking "Why Not in My Backyard!?" after analyzing the evidence on spillover effects from assisted rental housing to nearby home values (Galster et al. 2003). The question whether negative spillover effects result from nearby publicly assisted rental housing has fueled debate and research for several decades. It is a methodologically vexing question that continues to be highly relevant in the current policy environment of deconcentrating poverty through scattered-site public housing such as HOPE VI and mobility programs such as Housing Choice Vouchers.

Affordable Housing and City Welfare

SSRN Electronic Journal

Housing affordability has become the main policy challenge for most large cities in the world. Zoning, rent control, housing vouchers, and tax credits are the main levers employed by policy makers. We build a new dynamic stochastic spatial equilibrium model to evaluate the effect of these policies on house prices, rents, residential construction, labor supply, output, income and wealth inequality, as well as the location decision of households within the city. The analysis incorporates risk, wealth effects, and resident landlords. We calibrate the model to the New York MSA, incorporating current zoning and rent control policies. Our model suggests sizable welfare gains from relaxing zoning regulations in the city center, as well as from expanding rent control and housing voucher programs. Housing affordability policies have a substantial insurance value which offsets efficiency losses due to the misallocation of labor and housing. The calibrated model implies gains in social welfare from policies that reduce housing inequality.

Economic impacts of subsidized housing relocation*

Papers in Regional Science, 2005

In recent years increased emphasis has been placed on use of "tenantbased" housing subsidies for acquisition of market-rate housing that is more economically and racially integrated than traditional "project-based" public housing. In this article, we model the short-term economic effects upon various groups of a hypothetical program in which low-income families move from inner-city public housing to spatially dispersed Section 8 rental housing. Using cross-section data from the Chicago region, impacts are computed for two of these groups. Preliminary results indicate that the short-term net economic impact of this hypothetical housing relocation is negative, that these impacts have a spatial character, and that there is a potential tradeoff between tenant benefits, housing subsidies from society and housing integration.

The Geography of Housing Subsidies

Social Science Research Network, 2021

We investigate the spatially heterogeneous impact of the US federal mortgage interest deduction (MID) on the location and tenure decisions of households. We develop a generalequilibrium model at the county level featuring an endogenous itemization of housing subsidies. Despite being an important tax expenditure, repealing the MID would only slightly lower homeownership rates while leaving welfare mostly unchanged. The policy is ineffective because it targets locations with congested housing markets, creating a spatial shift of the housing demand toward areas that capitalize the subsidy into higher prices. We provide evidence that a repeal of the MID is to be preferred to an increase of standard tax deductions as recently implemented under President Trump's administration.

The Neighborhood Quality of Subsidized Housing

Journal of the American Planning Association, 2014

Housing policy in the United States has struggled for decades to assess the relative importance of neighborhood context in the provision of subsidized housing. In this study, we enter the debate over the value and limitations of neighborhood settings and the "dispersal-versus-development" approach by looking at the issue from an alternative perspective: neighborhood access. We provide a large-scale, quantifi ed assessment of the neighborhood context of subsidized housing, with specifi c attention to six metropolitan areas in the United States. Using data on neighborhood access (measured by a walkability index) and locations of federally subsidized housing, we investigate three primary areas of research: an analysis of the level of access for subsidized housing, the question of whether low-poverty neighborhoods translates to low access, and the degree to which neighborhood access is compromised by an increase in negative factors like crime, poverty, or segregation. We fi nd that federally subsidized housing in the United States is predominantly (72%) in poor-access locations. In addition, we fi nd that low poverty is likely to mean low access, for which voucher holders are not compensated by living in more attractive neighborhoods (indicated by higher housing market strength). However, we fi nd evidence that high-access neighborhoods are compromised by segregation in Atlanta, Boston, and Chicago, but not in Miami, Phoenix, and Seattle. Takeaway for practice: As advocates of the built environment, planners should support a more contextualized approach to housing policy, warranted by the fact that low-income households are often the most affected by physical proximity, or lack of it.