Subsidizing homeownership de-centralizes cities, as Muth (1967) suggested over half a century ago. This article focuses on the related question of whether repeal-ing a homeownership subsidy recentralizes cities. This question is relevant today, given the ubiquity of homeownership subsidies. We provide a first quasi-experimental test of a subsidy repeal's spatial effects by examining Germany's 2005 homeownership subsidy re-form. We find that repealing the subsidy con-tributed to recentralizing Germany's cities. Since recentralization helps abate carbon di-oxide emissions, repealing a homeownership subsidy also helps mitigate climate change. (JEL R14, R21)
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