A Comparative Analysis of Housing Subsidy Programs: Market Positions and Housing Outcomes

When governments provide demand-side benefits such as housing subsidies, recipients must enter the private housing market to use their benefits. Therefore, the outcomes of these subsidy programs are heavily influenced by the private market context in which those subsidies are used. This paper presents the concept of a market position as a tool to help analyze the experiences of housing subsidy recipients in the private market. In the context of housing, one’s market position will be influenced by personal identity, the policy and regulatory context, prevailing market conditions, and the behavior of landlords. The conjunction of these factors endows a market actor with advantages or disadvantages relative to other market participants. This paper analyzes the market positions of housing subsidy recipients in the U.S., the U.K., and the Netherlands. Because the rules and conditions of subsidy programs help to define the market position of subsidy recipients, the variation in subsidy programs across countries provides the analytical leverage needed for a rich cross-national comparison of market positions. The analysis demonstrates that households in the U.S. and the U.K. face numerous challenges in the private housing market given their disadvantaged market positions, whereas assisted households in the Netherlands enjoy a far stronger market position. To test the utility of the market position concept, the study uses national housing datasets to test the relationship between market positions and housing outcomes. The quantitative results suggest a positive relationship in which stronger market positions are associated with more favorable housing outcomes. This initial finding underscores the importance of the market position concept as a tool to understand housing subsidy programs and the outcomes achieved by their recipients.