Abstract: 

Place-based housing subsidies are typically evaluated through construction vol-

umes and price capitalization. We show that in slack housing markets a first-order

margin of adjustment operates through the organization of housing production.

We study the French Action Cœur de Ville (ACV) program and the Denormandie tax

incentive, which target declining small and mid-sized cities. Combining administra-

tive data on building permits, transactions, and firm registries, we construct a novel

developer-level dataset that links residential permits to the effective organizational

producers behind projects, consolidating special-purpose vehicles and holding

structures into economically relevant developer groups. Using this dataset, we

implement difference-in-differences and event-study designs within Zone C munic-

ipalities—a set of low-demand markets largely excluded from major demand-side

subsidies over our period. Policy exposure increases authorized housing supply by

about 45%, but the response is strongly compositional: additional units concentrate

in studios and one–two-bedroom dwellings, reducing average unit size. Most

importantly, ACV reorganizes local production: treated cities experience entry of

professional developers and a reallocation of market shares away from households

toward professional producers. Despite these changes, we find little evidence of

average price capitalization, with only modest relative price effects in the small-

est segments. The results imply that in declining markets, subsidies can operate

primarily through endogenous developer entry and production standardization

rather than through broad price adjustment, highlighting market structure as a

determinant of housing supply responses.

Location: University Evry Paris-Saclay, room Malinvaud (312), IDF building