Delivering Affordable Housing and Neighborhood Quality: A Comparison of Place- and Tenant-Based Programs

34 Pages Posted: 25 Oct 2017

See all articles by Essi Eerola

Essi Eerola

Bank of Finland - Monetary Policy and Research Department; VATT Institute for Economic Research

Tuukka Saarimaa

Aalto University - School of Business; Aalto University - School of Engineering

Date Written: October 16, 2017

Abstract

This paper analyzes the relative merits of large place- and tenant-based housing programs in Finland in terms of housing affordability and neighborhood quality. Using hedonic regression methods and household micro data, we find that rent savings to public housing tenants are less targeted towards low-income households than housing allowance. In addition, low-income public housing tenants live in poorer, less educated and lower quality neighborhoods than similar low-income households in private rental housing. This suggests that place-based programs may lead to more segregation than tenant-based alternatives even when neighborhood mixing is an explicit aim of the program, as in Finland.

Keywords: hedonic regression, housing allowance, place-based policy, public housing

JEL Classification: H220, R210, R230

Suggested Citation

Eerola, Essi and Saarimaa, Tuukka, Delivering Affordable Housing and Neighborhood Quality: A Comparison of Place- and Tenant-Based Programs (October 16, 2017). CESifo Working Paper Series No. 6674. Available at SSRN: https://ssrn.com/abstract=3058576

Essi Eerola

Bank of Finland - Monetary Policy and Research Department ( email )

PO Box 160
00101 Helsinki
Finland

VATT Institute for Economic Research ( email )

Arkadiankatu 7
P.O Box 1279
Helsinki, FIN-00531
Finland

Tuukka Saarimaa (Contact Author)

Aalto University - School of Business ( email )

P.O. Box 21210
AALTO, FI-00076
Finland

Aalto University - School of Engineering ( email )

PO BOX 14100
Aalto 00076
Finland

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