As countries grow and urbanize, the efficient and equitable production and delivery of housing and its associated infrastructure are key elements of successful urbanization. From a social perspective, housing is the most widely held form of wealth in most societies; and through this channel and through the operation of rental markets, housing is an important determinant of the distribution of welfare as well as its average level. Furthermore, housing is a good that is characterized by important external costs and benefits, so it is not surprising that all governments intervene in some fashion in housing through various taxes, subsidies, regulations, and sometimes direct public provision. But the efficacy of these interventions varies widely.
The purpose of this working paper is to present an overview of how to design interventions that work – and how to avoid interventions that do not work – based on experience in a range of countries, and on applied research. By thinking about interventions that “work,” we mean to provide some directions for housing policies and programs that have proven to be effective – both equitable as well as efficient.