Adoption of Institutional Options for Affordable Housing Production: Collective Action Problems and Option Choice

Abstract

This study investigates the factors that influence the choice of options for affordable housing production. It also demonstrates the utility of the Institutional Collective Action (IAC) framework by identifying how it can be applied to the choice of options for affordable housing production. The findings of this study show that the option chosen by a local government for affordable housing production depends on property value of affordable housing and the capacity of local government, rather than local government’s social responsibility and the community’s economic condition. This study also demonstrates that transaction costs incurred due to land regulations can substantially influence the adoption of options for affordable housing production. Finally, one of the important findings is that networks between regional cooperative agencies and local governments can promote a rehabilitation option for affordable housing production. This result suggests that local governments need to actively take advantage of coordination with regional agencies to successfully promote affordable housing production.