Indirect Benefits of Subsidized Housing Programs

Abstract

This article's review of the social science literature provides little support for the widely accepted belief that government subsidized housing programs have neighborhood spillover effects and that the programs produce indirect benefits over larger areas. In particular, the evidence on the relationship between housing programs and property values is contradictory and confusing. Of the recent HUD funded studies reviewed in this article, only one supports the existence of neighborhood spillover effects. In the Urban Homesteading Demonstration, higher investments and property values radiated out from homesteading sites during the 1970s. This program is, however, relatively unique in terms of the magnitude and visibility of improvements to individual dwellings. The preceding indicates that government subsidized housing programs will have to be justified on the basis of the direct benefits provided to participants rather than on any possible indirect effects.