Well-being Effects of a Subsidy Retention Fund for Renovation of Dwellings of Locked-in Owners in Ghent.

Abstract

With its subsidy retention fund, the city of Ghent targets homeowners, who live in a dwelling of bad quality and do not have the resources to renovate or move out. Being in this no-choice situation, they are locked-in homeowners. Through this innovative policy instrument, Ghent aims to improve the quality of its housing stock targeting households who may not take up other renovation-encouraging instruments. To reach the households who would otherwise not be able to renovate, important efforts in outreaching and offering technical and social guidance accompany the renovation subsidy. Guidance activities substantially increase the cost of the instrument, but in reaching the households living in bad-quality houses, it has the potential to create major benefits not only technically but also socially as housing quality is related to well-being. Generally, the identification of a causal relationship is difficult as well-being and its mediators are complex matters. This case offered a unique opportunity to collect information from the beneficiaries on a range of well-being domains both before the renovation of their dwelling and after the renovation. Even though the research was restricted to short-term effects, the results suggest that improvements in different domains of well-being can be linked to the improvement of housing quality. These improvements in well-being in Ghent show that (local) government spending in housing renovation of locked-in homeowners can be an instrument to achieve social progress.