An optimization model for location of subsidized housing in metropolitan areas

This paper presents an optimization model for evaluation of alternative spatial configurations of rent-subsidized housing in a large metropolitan area as well as associated monetary and nonmonetary impacts. Groups affected by these configurations include residents of subsidized housing, owners of nearby single-family housing, employers and society at large. Since impacts of subsidized housing are very localized, the first stage of the model creates potential location patterns for many small geographic areas. The second stage of the model uses local benefits to derive a location scheme for the metropolitan area which balances net social benefit with equity considerations of the geographical impact of subsidized housing. We apply this methodology to a small region in metropolitan Chicago and demonstrate alternative location schemes.