Public housing development and segregation: SRU law 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 housing 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 level. We find that the law stimulated public housing construction in treated municipalities with a low proportion of public dwellings. Within these municipalities, it decreased public housing segregation but it barely decreased low-income segregation. A mediation analysis actually shows that the construction and dispersion of public dwellings generated by the SRU law did not affect much low-income segregation. We investigate intra-municipal dynamics by running block-level regressions that include municipality fixed effects. Within treated municipalities with a low proportion of public dwellings, public housing concentration increased to a larger extent in blocks with below-average income and below-average public housing concentration.