Varieties of Capitalism in the Affordable Housing Sector: Evidence from Chile

Chile radically changed its housing policy regime in the late 1970s into a market-based system. Since then, the government has focused on providing targeted subsidies to low-income families as a way of stimulating the private supply of affordable housing. Although many experts have praised the quantitative success of Chile’s market-based housing policy, the implementation of this regime has had some very problematic aspects. One of these is the agglomeration of low-income families in isolated neighborhoods, usually located in the periphery of Chilean cities. This problem has motivated the government in recent years to implement new policies in this sector. Drawing on the varieties of capitalism literature, the main question this paper asks is whether these new forms of state intervention in the housing sector constitute a fundamental shift from the neoliberal regime Chile adopted in the 1970s, and if they involve a more promising approach to address the problem of urban segregation.