This study provides theoretical consideration and empirical estimation of the crowding out effects of subsidized housing supply at the city level. In particular, the aim is to explore the influence of subsidized housing stock on supply and prices in the non-subsidized housing sector. The empirical analysis is based on data for 1995-2015 for a panel of ten largest Finnish cities, all of which have a considerable supply of subsidized housing offering rental dwellings at lower than market rents. The empirical results indicate that, on average, one more subsidized dwelling is associated with 0.4 fewer non-subsidized dwellings. While the influence on non-subsidized housing prices could be either positive or negative in theory, the effect is price decreasing in the Finnish case. The study contributes to the very scarce scientific literature on crowding out effects of subsidized housing and appears to be the first one to distinguish between the crowding out impact that takes place through the influence via demand for non-subsidized housing vs. the supply curve effect.