Template-Type: ReDIF-Paper 1.0

Author-Name: Alexander Daminger 
Author-X-Name-First: Alexander 
Author-X-Name-Last: Daminger 

Title: Homeowner Subsidies and Suburban Living:
Empirical Evidence from a Subsidy Repeal
	
Abstract: This paper documents effects of a homeownership subsidy’s full
repeal on the urban-rural residential location choice. First, I document the
distribution of population across space for German labor market regions,
using official NUTS-3 level population statistics. These labor market regions
usually consist of a city (the urban core) and adjacent counties (the urban
hinterlands) connected by commuter flows. Second, using IV-estimations in
Difference-in-Differences and Triple-Differences frameworks, I exploit the 2005
repeal of Germany’s lump-sum direct homeownership subsidy “Eigenheimzulage”
on changes in this distribution across space. The results indicate that repealing
subsidies to homeownership reverses subsidy-induced population flows to the
periphery and thus makes regions re-urbanize. Cities’ population gains derive in
large parts from families with children and young residents of “building age”,
that are no longer able to become homeowners outside the city gates without
the subsidy’s support.

Length: 28 pages
Creation-Date:  2021-08
File-URL: http://www.bgpe.de/texte/DP/211_Daminger.pdf
File-Format: Application/pdf
File-Function: First version, 2021
Number: 211
Classification-JEL:  H24, H30, H71, R23, R28
Keywords: homeownership, housing subsidies, residential location choice, suburbanization
Handle: RePEc:bav:wpaper:211_Daminger