[acatton]

There was a study in France showing that for rent subsidies.[1]

In France, the state pays max(rate * rent, cap) for apartments for students, unemployed and poor workers. Usually people don't qualify for ratio of the rent, because it's way over the cap for the subsidy. To keep up with inflation, the state re-evaluate the cap of the subsidy almost every year.

A french economist showed that there was a correlation between the cap of the rent subsidy and the rental market prices for small apartments. Of course, correlation is not causation, it could just be that the rental market follows the inflation as much as the cap. But this correlation doesn't happen for bigger and more luxurious appartments. Her explanation is that your poor household is only ready to afford €100 per month, as an example, the subsidy cap is €500, so the rental market prices these apartments to €600 (= 100 + 500). When the state re-evaluate the cap to €550, the rental market goes up to €650. (= 100 + 150)

[1] https://www.insee.fr/fr/statistiques/fichier/1376573/es381-3...

[genericresponse]

The key difference in the markets is that it takes a very long time to build more apartments and houses, especially in France. There also isn't an option to not have housing. (Low elasticity) That keeps the short term supply effectively static. Same amount of supply, increase in money spent, inflation.

In a market like solar, there is production of more solar systems. There are also multiple readily available substitutes. (e.g. on-grid power) The effect of the subsidy should drive increased volume from manufacturers, keeping net price stable.