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Impact of a Housing Tax Credit on Local Housing Markets: Evidence from France
Clara Wolf  1@  , Guillaume Chapelle  2, 3@  , Benjamin Vignolles  4@  
1 : Banque de France  (BdF)
Banque de France
31 rue croix des petits champs -  France
2 : Economics Department, Sciences Po and LIEPP
Sciences Po
3 : Universitat de Barcelona
4 : Paris School of Economics  (PSE)
PARIS SCHOOL OF ECONOMICS, Paris School of Economics

Housing Tax Credits are a popular tool designed to increase the construction of affordable housing units for low and medium income tenants. Several papers in the US, however, document the lacklustre performance of such programs that represent an important amount of public expenditures. In this paper, we exploit a quasi-natural experiment in France (the removal of the Borloo and Robien policies on part of the territory with the implementation of the Scellier Tax Credit (STC)), to identify the impact of such policies on local housing markets. We find that the removal of these tax credits decelerated house prices and lowered the vacancy rate in new dwellings without reducing the production of new housing units. Finally, the income profile of tenants in new dwellings remained unaffected.


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