 Who Builds What When Subsidies Flow?Marie-Noëlle Lefebvre () and
Imen Daly
Post-Print from HAL Abstract: Place-based housing subsidies are typically evaluated through construction volumes and price capitalization. We show that in slack housing markets a first-order margin of adjustment operates through the organization of housing production. We study the French Action Coeur de Ville (ACV) program and the Denormandie tax incentive, which target declining small and mid-sized cities. Combining administrative data on building permits, transactions, and firm registries, we construct a novel developer-level dataset that links residential permits to the effective organizational producers behind projects, consolidating special-purpose vehicles and holding structures into economically relevant developer groups. Using this dataset, we implement difference-in-differences and event-study designs within Zone~C municipalities, a set of low-demand markets largely excluded from major demand-side subsidies over our period. Policy exposure increases authorized housing supply by about 45\%, but the response is strongly compositional: additional units concentrate in studios and one--two-bedroom dwellings, reducing average unit size. Most importantly, ACV reorganizes local production: treated cities experience entry of professional developers and a reallocation of market shares away from households toward professional producers. Despite these changes, we find little evidence of average price capitalization, with only modest relative price effects in the smallest segments. The results imply that in declining markets, subsidies can operate primarily through endogenous developer entry and production standardization rather than through broad price adjustment, highlighting market structure as a determinant of housing supply responses. Keywords: Difference-in-Differences; Developer Entry; Housing Prices; Market Structure; Tax Incentives; Place-Based Policy (search for similar items in EconPapers) Published in AFSE Annual Congress, Laboratoire d'Economie et de Management Nantes-Atlantique (LEMNA), Jun 2026, Nantes, France There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05698196 Access Statistics for this paper More papers in Post-Print from HAL |
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