As European cities attract an increasing number of migrants, the availability of affordable housing is under strain. Most cities respond to this challenge by offering public housing at subsidized rent prices. At the same time, calls for more stringent eligibility criteria that would exclude non-citizens arise from different fronts.

Despite the heightened public debate, we know little about the relationship between support for housing policies and immigration. When does public housing generate opposition? To what extent is opposition motivated by real or perceived competition with immigrants? Answering those questions will shed light on the nature of immigrant-native conflict over in-kind welfare benefits, and on the challenges of adapting the welfare state to increasingly diverse societies.

To this purpose, I investigate the case of an expansion of public housing in French municipalities that took place between 2001 and 2017. This case presents three main advantages: (i) the policy expands the total pie of welfare benefits, and hence de facto reduces competition, (ii) the National Front consistently argues for excluding non-citizens, (iii) the policy design allows to elicit exogenous variation in public housing assignment.

Leveraging on two identification strategies, this paper shows that public housing fuels support for FN in municipalities that historically host a large number of immigrants. However, in municipalities with few immigrants, the policy generates a decline in support for FN in favor of extreme left-wing parties. The evidence suggests a role for perceived (but not realized) competition over welfare benefits to be the driving force behind the results.