Calendrier du 05 janvier 2021
Applied Economics Lunch Seminar
Du 05/01/2021 de 12:30 à 13:30
RO'EE LEVY Jonathan (Tel Aviv University - Eitan Berglas School of Economics)
If you build it, will they come? Equilibrium effects of subsidizing housing supply
To reduce rents without stifling housing investment, governments increasingly subsidize privately owned rental housing, conditional on affordability. A simple model suggests that these policies may trigger new investment, but have heterogeneous effects across locations. I exploit quasi-experimental evidence from a tax break for individual landlords in France, and nationwide administrative data covering the universe of transaction deeds, property registries, and building permits. I show that subsidizing private rental housing increased new dwelling sales, promoted additional construction, and shifted the composition of the local housing stock towards rental and multi-family units. Preliminary evidence suggests it may have raised employment, in-migration, and social diversity in targeted areas. However, it led to substantial capitalization into land prices and developer profits, and increased urban sprawl. I plan to use the quasi-experimental results to quantify optimal tax expenditures in spatial equilibrium, where housing subsidies may help correct labor or housing market distortions, but exhibit regressive properties and significant deadweight losses.