Grants for First-time Homeowners in Norway - Distributional Effects under Different Market and Political Conditions

This paper focuses on first-time homeowner grants for low-income households in Norway. Using evidence from three different years (1984, 1996 and 2005) and from different regions, the analysis examines success in achieving equity goals under different market and political conditions. The empirical results show that grant payments allocated to low-income households are suitable for attaining vertical equity. However, changes in market conditions have created horizontal inequity, since differences in housing prices have not been compensated by differences in grant payments to avoid affordability problems. The recipients have become older and more heterogeneous despite a more targeted policy from 1996 specifically aimed at young people, and in 2005 male recipients were awarded significantly higher grant payments than female recipients.