Why we may need to reconsider the current one-size fits all approach to US housing policy.

Every year, the US federal government spends billions on low-income rental housing assistance. But is it spending this money effectively by using housing vouchers? In new research using panel data from rental units, Michael Eriksen and Amanda Ross find that the effects of housing vouchers vary from city to city. Introducing vouchers can drive up rents by increasing the demand of those who receive them for higher quality rental housing, but decrease demand and thus rent for lower quality accommodation. They show higher rent increases occur in areas where housing supply is inelastic due to a lack of developable land suggesting alternative place-based housing policies may be more effective in those areas.