On the use of policy to reduce housing market segmentation

This paper discusses two questions: (i) in Britain, can the movements of households away from cities be reversed by suitable government policies? (ii) Can integrated rather than segregated communities be developed? We consider the use of three types of policy instrument—land use planning, area regeneration initiatives and fiscal incentives targeted at individual households. We employ two types of model to investigate these policies—firstly, illustrative cellular automata, designed to illustrate the stability of segregation and, secondly, a fully estimated model of location choice. Our results suggest that there is potential for wider use of fiscal policy to influence population distributions.