In this paper, we investigate the labor supply effects of living in affordable housing. We develop a new and unique administrative data set of individual labor market biographies linked to subsidized housing projects in five German cities, allowing us to follow individuals over almost 20 years after having moved into the affordable housing unit. Using an event study design, we find that access to affordable housing increases total labor income and decreases the likelihood to be unemployed. We explain these results by four complimentary mechanisms: First, the affordable housing policy reduces negative labor supply incentives of housing benefits. Second, the affordable housing units are considerably closer to the city center and better connected to the urban labor market. Third, the rent subsidy allows workers to invest in their labor-related skills. Fourth, the residential stability provided by affordable housing in Germany likely induces workers and firms to invest in specific human capital.

This paper presents novels evidence regarding the persistent impact of working from home (WFH) on urban real estate. Leveraging data encompassing nearly all property offerings between 2014 and 2023 and WFH potential at the postcode level in 50 German metropolitan regions, we observe a gradual and sustained decrease in price premiums for proximity to urban centers since the onset of the pandemic. Our identification strategy exploits the spatially differential exposure to the WFH shock induced by Covid-19, finding that WFH significantly contributes to the observed decline in premiums. The impact is more pronounced in larger metropolitan areas. Our analysis shows that demand-side mechanisms drive the WFH effect, encompassing out-migration to remote areas, increased employment growth in the periphery, and higher valuations of larger properties. Our findings underscore the substantial implications of WFH for future urban planning and housing policies, particularly in city centers.

Place-based policies that allocate resources to specific areas inadvertently also designate these areas as needing assistance, potentially leading to the development of neighbourhood stigma. The common coupling of resource allocation and area designation makes it difficult to measure the stigma effect. However, the Swedish police’s listing of ”vulnerable” neighbourhoods, introduced in 2015, lacked accompanying resources, offering a unique opportunity to examine the isolated impact of place-based policies on stigma. We study the stigma from unfavourable area labels through an analysis of how the police list affected housing prices - a reliable measure of location value. Employing the synthetic control method, we find that the list resulted in an average price decrease of 3.7% within one year and 6.5% within six years in the designated neighbourhoods. In line with ideas of racial stigma, we also find that areas with a higher proportion of minority residents before classification experienced more pronounced negative effects.