This paper provides evidence on the external benefits of homeownership among lowincome populations. A natural experiment in Israel generated large changes in neighborhood homeownership rates while holding fixed the residents and housing stock, two primary sources of bias in traditional estimates. When public housing tenants are given the opportunity to buy their units, effects are felt in the neighborhood: when homeownership rises by 10 pp, neighborhood home prices rise 1.5-2 percent. Results are relevant for policies using financial incentives to increase homeownership among low-income populations

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