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Homeowner Subsidy Repeal and Housing Recentralization

Alexander Daminger and Kristof Dascher

Land Economics, 2023, vol. 99, issue 2, 283-301

Abstract: Subsidizing homeownership decentralizes cities, as Muth (1967) suggested over half a century ago. This article focuses on the related question of whether repealing a homeownership subsidy recentralizes cities. This question is relevant today, given the ubiquity of homeownership subsidies. We provide a first quasi-experimental test of a subsidy repeal’s spatial effects by examining Germany’s 2005 homeownership subsidy reform. We find that repealing the subsidy contributed to recentralizing Germany’s cities. Since recentralization helps abate carbon dioxide emissions, repealing a homeownership subsidy also helps mitigate climate change.

JEL-codes: R14 R21 (search for similar items in EconPapers)
Date: 2023
Note: DOI: https://doi.org/10.3368/le.081821-0095R
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