The praxeological view. For whoever receives it, the refund is money that stays in the household. But it is worth looking at where it comes from and where it tends to end up.

Where it comes from. The state has no money of its own to “refund.” The refund is paid out of taxes, and the April package itself was funded from the “excess surplus,” that is, from taxes collected above what even the budget had planned. Everyone paid those taxes, tenants included; the refund goes to those the criteria select. Murray N. Rothbard describes this relationship without euphemism:

“Where government intervenes, on the other hand, caste conflict is thereby created, for one man benefits at the expense of another. This is most clearly seen in the case of government transfer subsidies paid from tax or inflation funds—an obvious taking from Peter to give to Paul.”

Where it ends up. The refund is not a fixed sum for everyone; it equals 1/12 of the rent paid. For rents of up to 800 euros a month, every euro of rent comes back by one twelfth: the recipient in effect pays about 92 cents for every euro the landlord receives, and a more expensive home costs him less than its price shows. The subsidy thus raises the amount that those seeking a home can pay.

But homes do not multiply by ministerial decision. To add one apartment to the market takes a plot, permits, materials, labor and time. When demand rises and supply stays almost fixed, the price rises. The question is the same as that of the shifting of a tax: who finally bears the burden, or here who finally keeps the benefit, is decided not by the law but by the market. The law says the refund goes to the tenant; where homes are few, part of it tends to pass to the landlord at the next renewal of the lease. And because the measure is permanent, the more it is built into rents, the less it relieves those it is supposed to support. How much exactly depends on how easily new homes can be added; but the direction is one.

The cause is left untouched. High rents mean that homes are few in relation to those who seek them: they signal scarcity. The market’s answer to a high price is to build, repair and offer more homes. Rothbard lists the obstacles to that response, taking American cities as his example:

“Yet there are few other industries that have been so closely intertwined with government. Urban planning has controlled and regulated the cities. Zoning laws have ringed housing and land use with innumerable restrictions. Property taxes have crippled urban development and forced abandonment of houses. Building codes have restricted housing construction and made it more costly.”

Every such obstacle, wherever it exists (restrictions on land use, slow permits, taxes on property and on rental income, rules that make letting riskier for the owner), leaves fewer homes on the market. The rent refund touches none of them. Indeed, one of its criteria is the ENFIA assessment, that is, the tax that every year burdens the very ownership of a home.

Who is selected. The income and asset limits divide tenants into the entitled and the rest; whoever declares one euro above the limit is left out, while paying the same taxes. Teachers, doctors and nurses serving in the regions get two rents, with no income or asset criteria. Who gets how much is decided not by the market but by politics, and the limits can be redrawn every year. So the welfare state widens one criterion at a time, and with it the number of those who expect part of their rent from it: today, by April’s estimates, 86% of the households that rent.

One month’s rent a year is relief for whoever receives it. The question is why the state subsidizes the demand for homes instead of removing the obstacles it has itself put in the way of their supply.