Housing Subsidies

  • John Doling


‘A subsidy can be thought of as a state-financed reduction in the cost of a specific commodity or asset, relative to the market price it could command’ (Gibb and Munro, 1991, p. 3). The reduction can take a number of forms. Housing can be provided directly by the state or an agent operating on its behalf with the user cost being reduced through the utilization of the state’s resources. So, for example, the land can be provided free or at a reduced cost, or the finance provided at a below-market rate of interest. The state can provide cash payments to developers to offset the costs of production, or reduce tax rates payable on construction materials. Provided that these subsidies are not retained by the developer, the cost facing the ultimate user is reduced. These supply-side subsidies are sometimes referred to as bricks and mortar (appropriate perhaps only in those countries where they constitute the dominant building materials) or object subsidies.


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© John Doling 1997

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  • John Doling

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