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Just Released: Targeting Housing Production Subsidies: Literature Review

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A new report from HUD's Office of Policy Development and
Research (PD&R) asks the question, "Which use of
government subsidies is most effective for producing
rental housing?" The report, "Targeting Housing
Production Subsidies: Literature Review," provides a
concise survey of current literature on rental housing
markets and on housing policies for low-income renters.
The authors seek to identify the most successful uses of
subsidies in order to inform government policy makers and
others involved in rental housing production.

The authors invite the reader to imagine that a new
housing production program has been created. The
literature review then takes the reader through the
process of how program resources might be allocated -
either spatially (to types of housing markets or
neighborhoods) or by types of housing needed by different
types of households.

The chapters in the report discuss issues that help the
reader gain a better understanding of when subsidies for
the production of rental housing may be particularly
valuable and when they should be avoided. For example:

o Chapter 2 introduces the basic principles that govern
rental housing markets and the way in which demand and
supply subsidies affect them.
o Chapter 3 examines the issue of which renter households
need government support. This issue is central to how any
housing subsidy program, demand or supply-side, should be
allocated.
o Chapter 4 reviews findings from studies of the voucher
program on the types of households and types of housing
markets where lower than average proportions of people
who are offered vouchers are actually able to use them in
the private market.
o Chapter 5 considers the potential negative consequences
for other renters of using vouchers to subsidize low-
income tenants.
o Chapter 6 reviews the shortcomings of production
subsidies, such as their relatively high cost compared
with vouchers, and the possibility that instead of adding
to the supply of affordable housing, production subsidies
will simply substitute for rental housing that would have
been produced by the private market.
o Chapter 7 looks at the evidence on where production
programs are effective.
o Chapter 8 presents areas where the current knowledge is
weak and identifies some priority areas for additional
research. This chapter also provides a preliminary list
of indicators that might be used in an allocation formula
for supply- side housing subsidies.

City, county, and state agencies; state housing finance
agencies; the federal government; and public housing
authorities will find this publication to be a useful
resource as they make decisions that influence housing
programs and their design.

While this literature review uses information on program
costs and impact from current housing programs such as
Public Housing, HOPE VI, and Section 202, its findings
are explicitly aimed at future programs, not current
ones.


"Targeting Housing Production Subsidies: Literature
Review" is available as a free download at
https://www.huduser.gov/portal/publications/polleg/HsgPrdSubs.html
or in printed form for a nominal fee by calling HUD USER
at 1-800-245-2691.
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HUD USER
P.O. Box 23268
Washington, DC 20026-3268
1-800-245-2691
1-800-927-7589 (TDD)
202-708-9981 (fax)
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