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The effectivity of two of the most significant federal policies toward housing concerns certain inclusions in the federal income tax code which lead to owner-occupied housing preferential tax treatment and provisions in the code concerning housing to the poor at below market rent rates. If these two issues are studied as one question within a unified structure from the point of view of optimal tax theory, then the fundamental issue being considered is that of the usefulness of non-linear commodity taxes assuming consumer tastes are not identical. It will be proven that when consumers demonstrate different preferences, the differential tax treatment of housing and its subsidization to the poor may be desirable.

The factors that influence the length of time people avail of housing assistance should be identified because the present policy focuses on promptly helping physically able individuals attain self-sufficiency. Knowing who gets housing assistance for short periods can help determine the right residential composition of housing projects and targeting meager training budgets through the self-sufficiency programs of HUD. It is because of this that a study was conducted focusing on the duration of housing assistance spells. Data from the Survey of Income and Program Participation was used to develop a hazard model. Findings indicate that several individuals will continue receiving assistance for relatively long periods although some leave housing assistance after short spells. Results also show that there is no duration dependence in housing assistance spells.

Almost all previous research on the consumption effects and benefits of public housing efforts have employed aggregation theorems in building composite goods 'housing' and 'all other goods'. It is shown here that, under a more realistic assumption, if households show preferences based on housing characteristics, then estimated benefits using the composite method are biased upward. It is therefore recommended that consideration be given to the composition of the bundle of housing attributes offered under public housing programs when assessing the programs' economic impact.