Immigration and housing: rethinking the role of fiscal policies to manage diversity

Abstract

We study the two key social issues of immigration and housing in light of each other and analyse which housing policies work best to distribute diversity (racial, economic, cultural) equally across our cities and towns. In particular, we compare the impact of direct government expenditure and tax incentives on the housing conditions of immigrants in four European countries: France, Germany, Spain and the United Kingdom. The analysis shows that the different policies which have been adopted in these countries have not succeeded in preventing immigrants from being concentrated in certain neighbourhoods. The reason is that housing benefits and tax incentives are normally “spatially blind”. In our opinion, governments should consider immigration indirectly in their housing policies and, for instance, distribute social housing more evenly across different areas to promote sustainable levels of diversity.