Strategic Housing Policy, Migration and Sorting around Population Thresholds

We analyse whether, when and how local office-holders respond to the personal, economic incentives embedded in exogenously imposed population thresholds leading to an increased number and/or remuneration of local office-holders. Using data from all 589 Belgian municipalities over the period 1977-2014, local politicians are found to purposefully influence population growth through policy measures aimed at stimulating net in-migration when approaching important population thresholds. We provide evidence that strategic housing policy decisions – i.e. granting additional building permits early in the election cycle to maximize population growth just before the ‘deadline’ to surpass a population threshold – act as a key mechanism.