Question

Describe supply-side public housing policy in the U.S. Has it been successful? If so, why? If not, why These supply-side policies are inefficient. For every dollar spent on public housing, a recipient receives a benefit of about $0.24.

Answer 1

The supply side housing policy in the US is based on tax breaks to builders, leasing land for new builders, value capture mechanisms, property tax reforms and better transport facilities. These policies give incentives to builders to increase housing construction and supply. However, the supply side policy has a limited impact on provide affordable housing to the masses. The new houses built mostly cater to the rich and the middle classes and the poor are left out in the market. Also, it has been found that the increase in housing stock causes very little price fall as the prices remain sticky. Therefore, the supply side housing policy has to be complemented with demand side policies so as to provide affordable housing to all.