OECD Economics Department Working Papers
Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
- ISSN: 18151973 (online)
- https://doi.org/10.1787/18151973
Building Blocks for a Better Functioning Housing Market in Chile
Chile has made good progress in improving housing conditions, but still around 10% of the population lives in
either overcrowded houses, or of inadequate quality and/or with poor access to basic services. Improving further
housing conditions of the poor is important for curbing poverty and reducing inequality. First, better targeting of
housing subsidies will be essential to free resources for those truly in need. The government should also rethink
subsidies, which are currently directed exclusively at ownership. Means-tested rental cash allowances coupled with
more balanced tenant-landlord regulations would strengthen the rental market, thus enhancing residential mobility
and potentially reducing segregation. Second, better enforcement of social housing quotas for new building projects
coupled with investments in urban renewal and social services in poorer neighbourhoods and developing unused land
in urban areas could also help to reduce inequalities. Third, effective thermal and energy standards for buildings
would improve the quality of the housing stock, protect public health and reduce air pollution. Limiting construction
in fault lines and risky coastal areas could also increase Chile’s resilience to natural disasters. Fourth, taxing housing
so owing is not favoured over renting would reduce distortions and make the tax system less regressive. Finally,
enhancing the responsiveness of housing supply to demand would ensure there is a good match between housing
construction and demand, and avoid that public support gets capitalised into housing prices.
Keywords: mortgage markets, property taxation, housing subsidies, housing policies, rental allowances, housing prices, rental market, housing market
JEL:
L74: Industrial Organization / Industry Studies: Primary Products and Construction / Construction;
E21: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Macroeconomics: Consumption; Saving; Wealth;
R38: Urban, Rural, Regional, Real Estate, and Transportation Economics / Real Estate Markets, Spatial Production Analysis, and Firm Location / Production Analysis and Firm Location: Government Policy;
G21: Financial Economics / Financial Institutions and Services / Banks; Depository Institutions; Micro Finance Institutions; Mortgages;
R52: Urban, Rural, Regional, Real Estate, and Transportation Economics / Regional Government Analysis / Regional Government Analysis: Land Use and Other Regulations;
H24: Public Economics / Taxation, Subsidies, and Revenue / Personal Income and Other Nonbusiness Taxes and Subsidies;
R21: Urban, Rural, Regional, Real Estate, and Transportation Economics / Household Analysis / Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
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