Abstract: Many cities in high-income countries have undergone several profound transformations since the late twentieth century, collectively known as urban gentrification. In practice, urban gentrification is shaped not only by market dynamics but also by public policy. In this paper we investigate the effect of public housing on the evolution of urban gentrification and welfare in cities. We develop a novel dynamic quantitative urban model featuring spatial spillovers from endogenous consumption amenities, private housing, and a public housing sector that clears via a lottery. The model is estimated using rich administrative microdata from Copenhagen spanning 1986 to 2016 and makes use of a rapid, large-scale public housing privatization event in Copenhagen in 1995. We use the estimated model to shed light on the role of public housing in shaping urban gentrification and welfare in cities.

Abstract: Coming soon.