The socioeconomic impact of low-income housing programs: An interregional input-output model for the state of Sao Paulo and the rest of Brazil

The public policies programs for low-income housing in Brazil started in the 1930s. The most recent well advertised program Minha Casa, Minha Vida (MCMV) by the Federal government has the goals to improve the quality of life of poor people, to reduce the housing deficit, and to foster the economy. The objective in this research is to evaluate socioeconomics impacts of low-income housing on regional economic system, highlighting housing public policies developed by the state and the federal government. Under an emerging low-income housing policy, the state of Sao Paulo created the so-called CDHU. The question raised by this paper is how important was the contribution of these programs to the economic growth in the state of Sao Paulo and in the rest of Brazilian economy in previous years? Thus, a specific interregional input-output model is estimated for two regions, state of Sao Paulo and rest of Brazil, with the usage of six different typologies of low income housing ranging from a single families housing to gated community housing. The impacts are measured in terms of GDP, tax collection, production, and employment in the State of Sao Paulo and in the rest of Brazil. The results show that the effect in the economy is different depending on the chosen housing typology investment; in other words, the estimated model provide tools to decide about the best housing type for promoting economic growth. The MCMV program and the CDHU's program affect the state economy system by expanding the demand for inputs for the construction of new buildings (direct effect); by expanding the demand in other sectors due to the feedback effect (indirect effect), and by expanding the income of families- it also increases the demand for goods and services in the economy (induced effect). (C) 2017 Elsevier Ltd. All rights reserved.