1/8
New working paper:
"Insuring Landlords", with @_ThomasBezy and Tim McQuade
TLDR: landlords are concerned by rental non-payment risk; and, in turn, insuring them against it improves vulnerable tenants' access to housing in high-opportunity locations!
2/8
We study the Visale guarantee, a French policy providing non-payment insurance *for free*, mostly to renters below the age of 30, since 2016.
It now covers a large chunk of the rental market, and interest in the policy exceeds that for traditional non-payment guarantees.
3/8
Using data on Visale claims, we find non-payment to be large, concentrated among vulnerable tenants (young, low-income, immigrants), but highly idiosyncratic and hard to predict.
This makes risk-pooling valuable, and potentially enough to overcome barriers to housing access.
4/8
Indeed, we find that the policy increased the share of below 30 years old who rent in the private sector, by contrast with those slightly above the age cutoff.
The effects are concentrated in high take-up areas and no effect in placebo locations with no Visale exposure.
5/8
We find that Visale triggers moves-to-opportunity, at low fiscal costs.
Relative to those slightly above 30, younger renters (esp. low-income ones) are now + likely to move to a new town.
Moreover, they move to higher-rent, higher-wage, higher-density cities.
6/8
There is a lot more in the paper, where we study potential negative spillover effects on ineligible tenants, the reallocation of vacant housing, as well as heterogeneous impacts for the most vulnerable groups.
7/8
Non-payment risk is salient in France: many small mom-and-pop landlords, no credit scores, and complex and lengthy eviction process. But insuring landlords might broadly be worth it, given the very low fiscal costs ex post and ex ante.
Comments welcome!
8/8
Thanks Mathijs!!
New working paper:
"Insuring Landlords", with @_ThomasBezy and Tim McQuade
TLDR: landlords are concerned by rental non-payment risk; and, in turn, insuring them against it improves vulnerable tenants' access to housing in high-opportunity locations!
2/8
We study the Visale guarantee, a French policy providing non-payment insurance *for free*, mostly to renters below the age of 30, since 2016.
It now covers a large chunk of the rental market, and interest in the policy exceeds that for traditional non-payment guarantees.
3/8
Using data on Visale claims, we find non-payment to be large, concentrated among vulnerable tenants (young, low-income, immigrants), but highly idiosyncratic and hard to predict.
This makes risk-pooling valuable, and potentially enough to overcome barriers to housing access.
4/8
Indeed, we find that the policy increased the share of below 30 years old who rent in the private sector, by contrast with those slightly above the age cutoff.
The effects are concentrated in high take-up areas and no effect in placebo locations with no Visale exposure.
5/8
We find that Visale triggers moves-to-opportunity, at low fiscal costs.
Relative to those slightly above 30, younger renters (esp. low-income ones) are now + likely to move to a new town.
Moreover, they move to higher-rent, higher-wage, higher-density cities.
6/8
There is a lot more in the paper, where we study potential negative spillover effects on ineligible tenants, the reallocation of vacant housing, as well as heterogeneous impacts for the most vulnerable groups.
7/8
Non-payment risk is salient in France: many small mom-and-pop landlords, no credit scores, and complex and lengthy eviction process. But insuring landlords might broadly be worth it, given the very low fiscal costs ex post and ex ante.
Comments welcome!
8/8
Thanks Mathijs!!
