Policies for improving housing quality: a comparison of demand and supply subsidies

by Orhan M. Yildiz

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This study compares the ability of two housing subsidy programs--housing allowances and public housing--to reduce the incidence of inadequate housing (IIH). The author first measures IIH in eight selected U.S. cities. He then describes the future trend of IIH from the dynamics of deterioration (adequate units becoming inadequate) and upgrading (inadequate units becoming adequate). Finally, the author shows how the two programs reduce IIH differently because they affect the deterioration and upgrading rates differently. The findings indicate that inadequate housing is a pervasive problem, affecting higher- as well as low-income households. The subsidy programs analyzed are targeted on low-income households. Possibly the most cost-effective method of abating housing inadequacy for higher-income households would be publicizing the importance of preventive maintenance on public health and safety. For low-income households the study shows that housing allowances would improve housing quality more effectively than public housing.

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