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Urban Research Associates / The impact of a housing allowance system in the city of Madison and Dane County, Wisconsin
(July, 1977)

II. Experimental housing allowance programs,   pp. 16-21


Page 17

 
17 
possible. This discussion is intended to inform the reader as to 
the experiments' areas of concern and the methodology employed. 
The Supply (Market) Exeriment 
     This phase of the EHAP investigation is of particular interest to 
the Madison study because of the similarity of the region investigated 
(Green Bay, Wisconsin) and the questions addressed. Unfortunately, 
since it was instituted in June of 1974 and will last until 1984, 
results are scanty. A second site, South Bend, Indiana, which did not 
begin enrollment until December of 1974 and is less applicable to the 
Madison SMSA, will not be examined in any detail. 
     This phase of the-experiment is being carried out by the Rand 
Corporation of Santa Monica, California. Their assignment is to pro- 
vide reliable and credible answers to four clusters of questions about 
the effects of a national housing allowance program: 
     1. Supply responsiveness. How willitthe suppliers of housing 
         services--landlords, developers, and homeowners--react when 
         allowance recipients attempt to increase their housing con- 
         sumption? Specifically, what mix of price increases and 
         housing improvements will result? How long will these res- 
         ponses take to work themselves out to a steady state? How 
         will the responses differ by market sector? 
     2. Behavior of market intermediaries and indirect suppliers. 
         How will mortgage lenders, insurance companies, and real 
         estate brokers respond to an allowance program? Will their 
         policies help or hinder the attempts of allowance recipients 
         to obtain better housing and those of landlords to improve 
         their properties? What happens to the availability, price, 
         and quality of building services and of repair and remodeling 
         services? What seem to be the reasons for changes in insti- 
         tutional or industrial policies? 
     3. Residential mobility and neigahborhood change.    In their attempts
         to find better housing (or better neighborhoods), will many 
         allowance recipients relocate within the metropolitan area? 
         What factors influence their decisions to move or to stay? 
         What types of neighborhoods will the movers seek and succeed 
         in entering? Do moves by allowance recipients set in motion 
         a chain of moves by nonrecipients--either into neighborhoods 
         vacated by recipients or out of neighborhoods into which 
         recipients have moved? 


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