We develop a new dynamic equilibrium model with heterogeneous households that captures the most important frictions that arise in housing rental markets and explains the political popularity of affordable housing policies. We estimate the model using data collected by the New York Housing...

This study evaluates the effect of affordable housing policy on households' rent burden using the 421-a Tax Exemption Program in New York City. The program requires developers of housing projects in Geographic Exclusion Areas (GEA) to provide 20% of new units as affordable housing for a tax...