Placing Public Housing: Announcement Effects of New Builds in More and Less Expensive Neighbourhoods

Abstract

This study investigates the differential effect of the announcement of new public housing locations on property prices in relatively more expensive and less expensive neighbourhoods, taking advantage of a single unanticipated government announcement of new builds in multiple locations in the Australian Capital Territory. We apply three different approaches to control for the quality differences of properties, to be used alongside the difference-in-differences method. We find the announcement dampens property prices in more expensive host neighbourhoods but not in less expensive ones, and when the host neighbourhoods are treated as one, we find that there is no impact, hence masking this heterogeneous impact. Our findings will help policy-makers make important decisions around equity and efficiency in the provision of public housing across regions.