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Who Benefits from Public Housing?

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  • Eerola, Essi
  • Saarimaa, Tuukka

Abstract

This paper studies how much public housing generates rent savings for the tenants, how these savings are distributed among the tenants, and whether the tenants reside in better quality neighborhoods than similar low-income private rental tenants. Our rent savings estimates are based on a hedonic regression and detailed data on the private and public rental housing units from the city of Helsinki. We estimate that the total subsidy to public housing tenants is considerable and comparable in size to the housing allowance, the main tenant-based housing program. We also find that the subsidy is less targeted towards low-income households than the housing allowance. Regarding neighborhood quality, we find that public housing tenants live in lower quality neighborhoods than similar households living in private rental housing. This result suggests that public housing is not better than the housing allowance in delivering better neighborhood quality to low-income households.

Suggested Citation

  • Eerola, Essi & Saarimaa, Tuukka, 2015. "Who Benefits from Public Housing?," Working Papers 68, VATT Institute for Economic Research.
    • Handle: RePEc:fer:wpaper:68
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    References listed on IDEAS

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    More about this item

    Keywords

    Hedonic regression; housing policy; public housing.; Income distribution; Tulonjako; Effectiveness of public services; Julkisten palvelujen vaikuttavuus; H220 - Taxation and Subsidies: Incidence; R210 - Urban; Rural; and Regional Economics: Housing Demand; R230 - Urban; Rural; and Regional Economics: Regional Migration; Regional Labor Markets; Population;
    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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