Do Place-Based Tax Incentives Expand Housing Supply? Evidence from  France

Do Place-Based Tax Incentives Expand Housing Supply? Evidence from France | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Do Place-Based Tax Incentives Expand Housing Supply? Evidence from France Imen Daly This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7859659/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This paper estimates the causal impact of the French Pinel program—a geographically targeted demand-side tax incentive—on local housing market dynamics. Exploiting the spatial discontinuity in program eligibility and the staggered reclassification of municipalities, we implement a spatial difference-in-differences event-study design using high-resolution administrative data on real-estate transactions and building permits. The results show no statistically significant increase in new housing construction within treated areas. Instead, the policy induced a geographic reallocation of investment from non-eligible municipalities toward nearby eligible zones, together with a persistent shift in the composition of new housing toward smaller units. We also document a lasting rise in vacant-unit sales after the program’s expiration, suggesting speculative behavior and limited rental absorption in affected markets. Overall, the findings indicate that spatially targeted tax incentives can reshape the geographic and typological structure of housing investment without expanding aggregate supply. These results highlight the limits of demand-side subsidies in markets with low supply elasticity and the need to design policies that better integrate fiscal incentives with land-use constraints and local regulatory conditions. JEL Codes: R38; R58; H24; C23. Tax incentives Housing supply Spatial difference-in-differences Place-based policy France Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7859659","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":543519071,"identity":"61457da7-ca60-43db-8124-dc63d0421208","order_by":0,"name":"Imen Daly","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA8klEQVRIiWNgGAWjYBACNigpw8DewMCQABOuIEILDwPPASQtZ4iwi4dBIgFJAJ8WPrHDxx4wlNnxGNx8Y/bgYRuDnMHtMwYMB/fgMV86Ld2A4Vwyj8HtHHODxDYGY4NzOQYMB57h05JjJsHYxgzSYiaRcOZ/4sweHgPmDwfwacn/BtRSD3TYGZAWhnqQFoYDeLXksAG1HOYxuMED1FLBkMDPQ1BLGlDlueM8kmfSykBaDPt52AoO4NMiPzv5mcSHsmo5vuOHt0n+MGCQZ+Nh3vgAnxYwSABiBYQiDgNCGqDWNcCZ7A+I0jEKRsEoGAUjBgAAPeRJPpDbQEgAAAAASUVORK5CYII=","orcid":"","institution":"University of Paris-Saclay","correspondingAuthor":true,"prefix":"","firstName":"Imen","middleName":"","lastName":"Daly","suffix":""}],"badges":[],"createdAt":"2025-10-14 14:23:24","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-7859659/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-7859659/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":96427689,"identity":"499f7a62-6467-4b42-8966-e1910f41e2ed","added_by":"auto","created_at":"2025-11-21 02:53:32","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":3616659,"visible":true,"origin":"","legend":"","description":"","filename":"PINELPAPERd1.pdf","url":"https://assets-eu.researchsquare.com/files/rs-7859659/v1/16103e0cb7f1cdf03bef19ba.pdf"},{"id":96427690,"identity":"b957e352-7974-4274-a0d9-880866234371","added_by":"auto","created_at":"2025-11-21 02:53:32","extension":"json","order_by":1,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":3105,"visible":true,"origin":"","legend":"","description":"","filename":"cae3742bf0d5443d9cebcec522a64ce6.json","url":"https://assets-eu.researchsquare.com/files/rs-7859659/v1/e20b8b8e155177fefd43c35a.json"},{"id":99314225,"identity":"11b89368-fdd1-4d3d-bdb4-879fa8bf6325","added_by":"auto","created_at":"2025-12-31 16:21:00","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":2212284,"visible":true,"origin":"","legend":"","description":"","filename":"PINELPAPER.pdf","url":"https://assets-eu.researchsquare.com/files/rs-7859659/v1_covered_7fa06e8e-7c1b-4548-be97-5ea54c2783e3.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Do Place-Based Tax Incentives Expand Housing Supply? 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