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ABSTRACT This paper analyses the relative merits of demand-side and supply-side strategies for attacking the housing problems faced by low-income renters. The analysis is distinctive in that it takes seriously the emerging consensus among international housing scholars about the centrality of housing quality sub-market dynamics and spatial considerations. Received theory about the nature of housing sub-markets and their adjustments to policy interventions is used to critique previous evaluations of supplyand demand-side approaches and to provide fresh insights into their ability to achieve a wide variety of programmatic goals. Numerous dimensions of spatial considerationsexternalities, area-wide abandonment and revitalisation, local reinvestment psychology, racial and economic integration and freedom of household locational choice-are applied to a further consideration of these two strategies, again using several alternative goals. Finally, the paper argues for the importance of context-driven housing policy formulation. Problem definition, goal weighting, and metropolitan housing market, socio-economic, and governmental characteristics collectively must be considered before an unambiguously 'best' housing strategy can be identified. Nevertheless, the paper concludes that, with the typical context, the demand-side approach is superior to the supply-side approach.
Introduction
Many nations provide assistance to low- and moderate-income (`low income' hereafter) renter households to aid their occupancy of safe, decent housing without imposing severe financial burdens. This assistance has taken two distinct forms. The demand-side strategy has tried to augment the financial capacity of the household to occupy an appropriate dwelling unit by attaching the housing subsidy to the given household. Such a strategy typically is described by the rubrics 'housing allowance', 'voucher', or `rent supplement' in Canada, Europe, and the US. The other strategy, supply-side, has tried to reduce the rent charged to low-income tenants by subsidising the construction, rehabilitation, and/or operation of apartment buildings. The subsidy is attached to the structure, and these buildings may be owned by private, for-profit or non-profit owners, or public bodies of various sorts. Such a strategy is represented by the terms 'social', 'public', 'council', or `non-profit' housing.
Historically, nations in North America and Europe have emphasised various types of supply-side strategies. In the US since the 1980s, however, emphasis has shifted decidedly toward demand-side approaches. More recently, similar shifts have occurred in Canada and in several European nations that previously had focused almost exclusively on supply-side...