Does Selling State Silver Generate Private Gold? Determinants and Impacts of State House Sales and Acquisitions in New Zealand

Katy Bergstrom, Arthur Grimes and Steven Stillman

No 11_03, Working Papers from Motu Economic and Public Policy Research

Abstract: New Zealand experienced two natural experiments with respect to state-provided social housing after 1990. First, while continuing to acquire new state houses, the National Government substantially reduced the overall state house stock by selling a greater number of houses either to existing tenants (through the Home Buy scheme) or, if the house was vacant, to other purchasers (vacant sales). From 1999, the Labour-led government ended homebuys, greatly reduced vacant sales and increased acquisitions, resulting in a major increase in the state house stock. We examine determinants of the spatial distribution of homebuys, vacant sales and acquisitions over the period 1991–2006, focusing on levels of, and changes in, local deprivation status and house prices as determinants. Having modelled the determinants of each category, we test whether homebuys, vacant sales, and acquisitions in an area over one five-year period had an effect on changes in local deprivation and house prices in the succeeding five-year period, after controlling for initial levels of, and prior changes in, deprivation and house prices. We find that state house acquisitions in an area led to a subsequent rise in local deprivation, consistent with the policy aim of providing housing to those most in need. While vacant sales had no material effects, a greater number of homebuys in an area led to increased local real house price appreciation over the subsequent five year period. This finding, based on the results of a politically-driven natural experiment, is consistent with the hypothesis that a scheme that transforms existing tenants into homeowners (at the same location) improves community outcomes for the surrounding neighbourhood.

Keywords: state house sales; homeownership (search for similar items in EconPapers)
JEL-codes: H31 I38 R21 R28 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2011-03
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://motu-www.motu.org.nz/wpapers/11_03.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mtu:wpaper:11_03

Access Statistics for this paper

More papers in Working Papers from Motu Economic and Public Policy Research Contact information at EDIRC.
Bibliographic data for series maintained by Maxine Watene ().