Evaluating the effect of grant on affordable housing supply in England using a quasi-experiment

England suffers from an undersupply of affordable housing, in particular the social rented tenure. Long term there has been a decline in government capital grant for new social rented supply, which makes a 2018 policy change that provided additional grant in areas of ‘high affordability pressure’ a notable exception. In this paper, we evaluate the causal effect of the policy change on affordable housing starts in 2019/20. Using a fuzzy regression discontinuity design, we estimate the effect of the policy to be 0.71 additional social rented starts per 1,000 dwellings in a local authority, and the effect was notably strong on homes delivered by housing associations. We find no effect on social rented starts by local authorities, or affordable housing starts irrespective of tenure. The study contributes empirical evidence on how supply-side subsidies interact with their institutional context and provides a methodological contribution by adopting a quasi-experimental design.