| dc.description |
This dissertation studies the economic effects of public housing programs. Public housing used to be the primary form of housing assistance throughout the 20th century in countries such as the United States and the United Kingdom. In recent decades, however, public housing has fallen out of favor, mainly due to the negative experience with large public housing developments, which concentrated high levels of poverty and crime. As a result, policymakers have shifted resources towards subsidized private housing in mixed-income developments, i.e., buildings that combine affordable with market-rate units. In the first two chapters, I examine the impact on local housing markets of demolishing and regenerating public housing into mixed-income developments. In the last chapter, I lay out a quantitative model to think about the distributional implications of shifting resources from public housing towards other housing assistance programs, such as housing vouchers or subsidies to low-income housing construction.
Chapter 1 estimates the effects of demolishing public housing on private house prices. I examine the impact of a large and negative housing supply shock caused by the demolition of public housing developments in Chicago in the 1990s and 2000s. Using a synthetic control method based on census tracts in distant parts of the city, I estimate that house prices increased by about 20 percent over a ten-year period in census tracts near the demolitions. A calibration exercise suggests that the upward price pressure associated with reduced housing supply cannot fully explain the observed price effect. This leaves room for a contribution from positive amenities generated by demolitions, which raised the demand for nearby housing units. The estimated importance of amenity effects is, however, sensitive to the way the affected housing market is defined. The results highlight that, while public housing can lead to lower local house prices for unsubsidized households by increasing overall supply, the way in which the public sector supplies housing --in this case, high-rises concentrating very low-income households-- can impose significant adverse consequences on its neighbors.
Chapter 2 (joint work with Lorenzo Neri) studies the effects of regenerating public housing into mixed-income communities on the local housing market. We exploit a wave of public housing regenerations in London that not only demolish and rebuild existing public housing but also almost double the number of units on-site by adding new market-rate units. Over a six-year period, we estimate that regenerations significantly raise nearby house prices and rents, although house prices decrease slightly farther away. We also find that they attract higher-income households, increase positive amenities (e.g., cafés, restaurants), and reduce negative amenities (e.g., crime). The results are consistent with strong demand effects concentrated near the buildings and moderate effects from increased supply that persist in the broader area. We provide suggestive evidence that changes in a neighborhood's socioeconomic composition are important to explain price effects: regenerations in low-income areas and those adding a large number of market-rate units lead to larger price increases. Overall, our findings indicate that providing public housing through mixed-income housing can overcome some of the negative consequences on nearby areas associated with traditional public housing developments, as suggested in Chapter 1. However, the supply of additional market-rate units can reduce affordability in low-income neighborhoods, possibly due to an increased risk of gentrification and displacement of low-income neighbors.
Finally, Chapter 3 (joint work with Juliette Fournier) examines the distributional implications of the policy shift from public housing to subsidized private housing initiated by the U.S. government over the past few decades. This policy shift leaves a larger role to private developers and property owners in supplying low-income housing, who may end up capturing a substantial share of the benefits intended for disadvantaged households. We build a quantitative urban framework where housing assistance complements income taxation to redistribute across workers. We argue that the provision of affordable housing involves a trade-off between indirect pecuniary redistribution and direct amenity effects. On the one hand, public housing drives local rents down by increasing supply, while amplifying the spatial concentration of poverty. On the other hand, project- and tenant-based rental assistance enhances the local amenities of subsidized households by promoting mixed-income communities, but pushes private landowners’ rents up. We estimate the key parameters of the model, which allows us to disentangle the forces behind this crucial trade-off. |
|