Comparing the role of public housing and housing allowances in reducing inadequate housing

This paper compares the ability of housing allowances and public housing subsidy programs to reduce the incidence of inadequate housing in the United States. In eight selected U.S. cities the physical condition of dwelling units is described as either adequate or inadequate. After determining the baseline housing stock quality, the future trend of the incidence of inadequate housing is described from the dynamics of condition deterioration and improvement. Both subsidy programs reduce the incidence of inadequate housing by affecting existing deterioration and improvement rates in a market. A housing allowance program with open enrollment to lower-income households reduces the long-run incidence of inadequate housing much more effectively than a public housing construction program funded at the same level. In addition, although both programs assist low-income households, only housing allowances improve conditions for some higher-income households. This further enhances the preferability of housing allowances, since inadequate housing is found to be a pervasive problem among both low- and higher-income households.