Simulating rent subsidies for households in Flanders

Ondertitel:a distribution analysis

Housing policies, both in the form of cash benefits and of social housing, can have a considerable impact on the income position of households. In order to evaluate their effectiveness in Flanders, we use the microsimulation technique. We first compare the distributive pattern and poverty effect of the in-kind benefit of social housing to that of cash housing allowances for tenants (via an existing small system of rent subsidies) and owners (via the tax treatment of home ownership). For this purpose, we estimate the value of imputed rent of social housing through a regression-based opportunity cost approach (see Frick and Grabka, 2003). Next, we evaluate alternative policies by simulating them in a microsimulation tax-benefit model. We consider two means tested housing benefits, which are much more substantial in terms of size than current cash benefits for tenants. We assess the poverty impact and distributive effects, and investigate how the structure of the population (and especially the distribution of tenure status) affects the results. To make these alternative housing benefits revenue neutral, we change the tax treatment of homeowners, by reducing the tax relief for mortgage interest payments.

Jaar van publicatie:2012