1. Frans Schilder Johan Conijn
Subsidies in the Dutch Housing Market A study into the distortionary effect of subsidies on tenure choice and mobility
Frans Schilder Johan Conijn

2. Introduction
Three key issues in Dutch housing market - Very low elasticity of supply - Large share of social landlords - Immensely subsidized
Key stats: - 55 % owner-occupied; 45% rental - 95 % rental housing regulated - 75 % rental sector owned by housing associations

3. Introduction (2) Strongly dysfunctional (Conijn, 2006):
Little construction
Difficult entry for starting households
Little mobility
Often mentioned in relation to “the gap”

4. “The Gap” Gap between tax value and exploitation value Tax value

5. “The Gap” (2) Dissected in Conijn and Schilder (2009)
Fiscal treatment owner-occupied sector
Rent level
Expenditures on maintenance
Expenditures on management
Residual value
Length of exploitation period
Total size: €14 bln, per year, per sector

6. Theme of this paper What is the effect of subsidization on:
Tenure choice
Desired mobility
Realized mobility

7. Tenure choice Logit model: PO = f(yj, UCO,j/UCR,j, cj)
Current market situation
Derived market situation without subsidies
PO = f(yj, UCO,j/UCR,j, cj)

8. Tenure choice (2)

9. Tenure choice (3)

10. Desired mobility
Effect implicit subsidy of renters on their desire to move
Logit model:
Dj = f(ISj , Hj , cj)

11. Desired mobility (2) Effect subsidy (%) Province Groningen -2,33
Effect subsidy (%)
Province
Groningen
-2,33
Friesland
-2,44
Drenthe
-3,03
Overijssel
-3,78
Flevoland
-2,97
Gelderland
-5,05
Utrecht
-5,46
Noord-Holland
-6,08
Zuid-Holland
-3,85
Zeeland
-2,55
Noord-Brabant
-5,19
Limburg
-3,36
Netherlands
-4,51

12. Desired mobility (3)

13. Realized mobility
Vacancy chain analysis

14. Realized mobility (2)

15. Realized mobility (3)

16. Realized mobility (4) Impact of subsidies on vacancy chains
Cli = f (UCO i / UCR i , UCi , WUCi , ISi , FEi , HAi , yi , ci)

17. Realized mobility (5)

18. Realized mobility (6)

19. Conclusion Abundance of subsidies Strong effect on tenure choice
Significant impact on residential mobility