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Ensuring access to essential services : demand-side housing subsidies

This paper examines the strengths and weaknesses of demand-side subsidy approaches for improving poor households' access to housing services. It begins with a discussion of the rationale for stand-alone housing assistance programs, and a description of the ongoing transition away from traditional supply-side housing assistance to demand-side subsidies. The paper presents model demand-side approaches, but also draws on real world examples to highlight various aspects of program design related to targeting, transparency, price distortion, institutional capacity, administrative complexity, and funding. It also describes how variations in the design of housing-related subsidy programs can appear in response to philosophical, political, and resource considerations. The paper concludes with a discussion of the appropriateness of different subsidy approaches for various situations.