Low-income housing in high-amenity areas: Long-run impacts on residential development

Alexander, Robert; Thorsnes, Paul; Kidson, David

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Low-income housing in high-amenity areas: Long-run impacts on residential development

Thorsnes, Paul; Alexander, Robert; Kidson, David

Cite this item: Thorsnes, P., Alexander, R., & Kidson, D. (2011). Low-income housing in high-amenity areas: Long-run impacts on residential development (Economics Discussion Papers Series No. 1115). University of Otago. Retrieved from http://hdl.handle.net/10523/2083

Permanent link to OUR Archive version: http://hdl.handle.net/10523/2083

Date: 2011-08-01

Publisher: University of Otago

Series: Economics Discussion Papers Series

Series number: 1115

ISSN: 1178-2293

Keywords: housing; local public goods; neighbourhood amenities

Research Type: Discussion Paper

Languages: English

Abstract:

Centre-left governments from the 1940s into the 1970s developed several large areas in the urban fringe of Dunedin, New Zealand for low-density, mostly single-family public rental housing. The public housing in these areas is now accessible, well endowed with natural amenities, and allocated to very low-income households. Analysis of sales of private housing reveals the expected discount on sales of nearby houses. But analysis of the influence of spatial variation in natural amenities on incomes and structural characteristics indicates large-scale effects of the public housing developments: diversion of higher-income housing to other suburban areas and possibly maintenance of older high-quality housing in central areas. Interestingly, centre-right governments may have opened the door to market forces by encouraging tenants to purchase their public rental house. We find evidence that the recent increase in house prices has encouraged relatively high income households to purchase ex-state rentals in these high natural amenity areas.

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