The regional macroeconomic impact of projected affordable housing developments: Facilitating the ‘levelling up’ Agenda?

Abstract

While investment in social housing is mentioned in the Government’s white paper on levelling up, it does not receive the emphasis extended to infrastructure investment. Traditionally, the case for affordable housing was based on merit goods arguments. While the economic effects of housing have been explored, this has mainly been through traditional economic impact studies whose perceived weakness has led to a degree of policy scepticism around the findings of such studies. Recently, however, a strong case has been made for treating investment in housing on a comparable basis to infrastructure on the basis of its potentially important impacts on the supply side, stimulating labour supply and productivity. The purpose of this paper is to evaluate the potential economic impacts of meeting the projections of affordable housing needed in Scotland to combat homelessness using a framework that overcomes the weaknesses of conventional impact analyses.