Public housing spillovers: Evidence from South Africa

Can place-based policies promote urban development beyond their footprints? We estimate the spillover effects of public housing projects in South Africa by comparing changes near 166 projects that were successfully constructed to changes near 140 projects that were planned but not constructed. Constructed projects triple the amount of formal housing inside their footprints and lead to one new informal house being built for every three new formal houses. These effects extend beyond project footprints, with small increases in both formal and informal housing detected up to 500m from the targeted areas. The findings are consistent with projects generating positive housing externalities.