# 17-008/VIII (2017-01-13; 2018-08-10)

Author(s)
Hans R.A. Koster, VU Amsterdam, the Netherlands; Jos van Ommeren, VU Amsterdam, the Netherlands
Keywords:
house prices; place-based policies; public housing; housing spillovers
JEL codes:
R30, R33

We study the economic effects of place-based policies in the housing market, by investigating the effects of a place-based programme on prices of surrounding owner-occupied properties. The programme improved the quality of public housing in 83 impoverished neighbourhoods throughout the Netherlands We combine a first-difference approach with a fuzzy regression-discontinuity design to address the fundamental issue that these neighbourhoods are endogenously treated. Improvements in public housing induced surrounding housing prices to increase by 3.5 percent. The programme’s external benefits are sizeable and at least half of the value of investments in public housing.