Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/243268 
Year of Publication: 
2021
Series/Report no.: 
BGPE Discussion Paper No. 210
Publisher: 
Friedrich-Alexander-Universität Erlangen-Nürnberg, Erlangen und Nürnberg
Abstract: 
This paper analyzes the effects of German homeownership subsidies on the intra-city rent structure. Using a large-scale micro data set on German rent offerings, I first construct novel city rent indexes that include various rings around cities' CBDs. Using triple differences (TD) frameworks, I then estimate the introduction of the homeownership subsidies' effects on rent for the cities that received varying subsidy rates. The empirical results indicate that subsidies to homeownership lower central apartment rent premiums in those cities, where they give the "biggest bang for the buck". Consequently, I find that homeownership subsidies contribute to an increase in housing affordability through the price changes in the rental market: an increase in the subsidies leads potential homeowners to move away from the CBD, resulting in a decrease in the rental demand and lowering the rent.
Subjects: 
homeownership
housing subsidies
homeownership subsidy
triple differences
JEL: 
H22
H71
R31
R38
Document Type: 
Working Paper

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