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The external benefits of government subsidized rehabilitation programs

University of British Columbia

This thesis examines the hypothesis that government housing policies - in particular rehabilitation policies - create positive spillover effects (externalities) to surrounding homes, buildings, and property values in general. These effects are examined for two reasons: (a)There is a large body of literature focussing on externalities created by government housing policies, but very little of this theory has been tested empirically; (b) The recent implementation of rehabilitation policies have been based in part on the expectation that the policies create positive neighborhood effects. In this study, an empirical analysis is performed on one rehabilitation program — the Canadian Residential Rehabilitation Assistance Program (RRAP). The program is analyzed via multivariate regression analysis to determine if any externalities are created by this housing policy. The determination of externalities is important in understanding the factors affecting neighborhood change. This study investigates the relationship between externalities and expectations and discusses how these factors can have large impacts on reinvestment patterns which create positive neighborhood change. The empirical findings of this study indicate that there are no externalities created by the RRAP program. This research suggests that such programs be implemented on the basis of the individual benefits for the recipient. The findings imply that similar rehabilitation programs will not create positive externalities or expectations and, hence, cannot be factors affecting neighborhood change. As a result, policy analysts should conclude that programs similar to RRAP should not be implemented solely on the basis that there are indirect external benefits to the neighborhood.

Text

2010-04-15

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http://hdl.handle.net/2429/23556

Business Administration

University of British Columbia

Graduate