“"Stop all of the subsidies... All those do is force up the price of housing for everybody while hiding it for those that are lucky enough to qualify for the subsidies," meaning housing subsidies increase overall housing prices.”
Attributed to Rep. Tom McClintock (quoted to Newsmax)
McClintock is quoted criticizing the bill's subsidies and asserting that subsidies and grants drive up housing prices for everyone while obscuring costs for subsidy recipients.
What the proof shows
The statement quoted from Rep. McClintock — that housing subsidies “force up the price of housing for everybody” — overgeneralizes. Empirical research shows mixed, context-dependent effects. Several high-quality studies find that tenant- or demand‑side subsidies (vouchers, allowances) are partly capitalized into higher rents — especially in markets with inelastic housing supply or at rents near program caps — but other rigorous work finds little or no effect on overall market prices (though there can be increases for particular units or segments). Supply‑side programs (e.g., LIHTC) have heterogeneous effects and can raise nearby property values in some contexts rather than reducing total prices. A central determinant is local housing‑supply elasticity: where supply is constrained, additional demand from subsidies is more likely to raise rents; where supply can expand, price effects are smaller. McClintock’s phrasing is therefore misleading and too broad: subsidies can and do push up prices in some programs/places and for some segments, but they do not uniformly “force up the price of housing for everybody.”
Corrected version
Some housing subsidies — particularly demand‑side vouchers or cash allowances in markets with constrained supply — can put upward pressure on rents for specific types of housing or neighborhoods, but studies find the overall market effect varies by program design and local supply elasticity and is not universally a price increase for everyone.
Automated evidence confidence: 0%
References and proof
Every link was reachable when published. Each proof point states how that source bears on the claim.
Housing Vouchers and the Price of Rental Housing ↗
American Economic Association (American Economic Journal: Economic Policy)Eriksen & Ross (2015) estimate the effect of increasing vouchers and report: “We do not find that an increase in vouchers affected the overall price of rental housing,” but they do find larger price increases for units near the voucher rent cap and in cities with inelastic housing supply.
Literature review on the impact of demand‑side housing subsidies on the housing market ↗
AHURI Research Consultancy Service (systematic literature review, 2015)The review concludes there is strong evidence that a proportion of demand‑side housing subsidies is capitalised into higher rents; the degree of landlord capture depends on housing‑supply elasticity and program design.
Discussion
Disagreement is welcome. Spam and abuse are not.
No published comments yet. Add evidence or challenge the reasoning.
Members can comment for free
Create a free membership or sign in.