changing housing systems and the risks for social exclusion

9th European Research Conference

Homelessness in Times of Crisis

Warsaw, Friday 19th September 2014

Changing Housing Systems

Marja Elsinga, Delft University of Technology

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Housing tenures

Lessons from the crisis

Housing agenda




Home ownership, a European

dream?

All European governments encourage

home ownership: formal institution

“Home ownership dream” as an informal

institution




Home ownership in the EU27, EU-SILC 2009

Largest (>75%) in

Eastern, Southern

Europe, BE

Around 65 - 75%:

UK, IE, SE, PL

Relatively low (<

60%) in GE, AT, DE,

DK, FI, CZ and NL




5

Home ownership in Europe, Sources: Catte et al (2004), Scanlon and Whitehead (2007), EMF (2010),MRI (1996), Balchin

(1996)




Home ownership by income quartile, EU-SILC 2009

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%G

erm

any

Aust

ria

Neth

erlands

Belg

ium

Sw

eden

Denm

ark

Fin

land

Port

ugal

Italy

Gre

ece

Spain UK

Irela

nd

Pola

nd

Hungary

Slo

venia

Corporatist Social democrat Mediterranean Liberal Eastern Europe

1st (low) 2nd 3rd 4th (high)




Rental sector (%) by hh income. EUSILC

0

50

100

150

200

250

300

Sw

itse

rland

Germ

any

Aust

ria

Neth

erlands

Denm

ark

Fra

nce

Sw

eden

Luxum

burg

United K

ingdom

Belg

ium

Fin

land

Irela

nd

Italy

Port

ugal

Slo

venia

Pola

nd

Est

onia

Latv

ia

Spain

Bulg

aria

Hungary

Slo

vakia

Lithuania

Cro

atia

Rom

ania

income per household

income per household

0

10

20

30

40

50

60

70

Sw

itse

rland

Germ

any

Aust

ria

Neth

erlands

Denm

ark

Fra

nce

Sw

eden

Luxum

burg

United K

ingdom

Belg

ium

Fin

land

Irela

nd

Italy

Port

ugal

Slo

venia

Pola

nd

Est

onia

Latv

ia

Spain

Bulg

aria

Hungary

Slo

vakia

Lithuania

Cro

atia

Rom

ania

rental

rental




Reasons to encourage home ownership

Make households build equity

Help households to achieve the preferred tenure or

dream

Empower people, create better citizens

Increase involvement in neighbourhoods

“Reduce government involvement”




Lessons

Countries with higher incomes do not necessarily have

higher homer ownership rates, on the contrary

Home ownership for all is not a realistic solution for all

Home ownership as superior tenure: strong beliefs,

weak evidence




Housing tenures


Housing agenda




Average house price change, Knight Frank, 2012




House price change, 2012, Eurostat

-20

-15

-10

-5

0

5

10

15




Evaluation: North America, Europe, SE Asia (Bardhan et al, 2012: Global housing markets: crisis, policies and institutions)

Governments also speculated in real estate market

Most deregulated financial systems were in worst

position

Countries who did well: developed safeguards following

previous bubbles (Hong Kong, Korea)

Three conditions may reduce the chance for a bubble:

Full recourse

Prepayment penalties

Absence of mortgage deductibility




Journal Housing and the Built

Environment, 2014/2 Regulation of the mortgage market:

Sweden learned from the 1990 crisis

German: good regulation, no boom

Australia, introduced proper regulation before

Basel III, no crisis

France regulation, quick recovery

Ireland: regulation is necessary, hard lesson

from the ciris




Journal Housing and the Built

Environment, 2014/2 Home ownership harder to access

Housing on the political agenda:

No (Sweden, Germany, Italy)

Yes as subject for budget cuts:

Reductions housing benefit (UK)

Landlord levy (NL)

Private rental as solution (UK, NL)




Housing Studies 5/2014

Private rental as solution (UK, NL)

More security in PRS? Australia

Less security in PRS? Netherlands, Germany

Social housing as ambulance, reducing security

of tenure (UK, Australia)

More room for temporary contracts?




Housing tenures


Housing agenda




Social/public renting

Size of sector varies

Support is under discussion: social housing

as a problem

Budget cuts governments

Level playing field debate

But also debate about the role of social

rental housing for social inclusion and labour

market mobility: social housing as a solution




Thinking on social housing (Dutch example)

Kemeny: unitary rental sector: good for

people, no ghetto

In practice liberal discourse in

dominating: rent increases, landlord levy

Social democrats fighting for broad sector

In reality:

Low incomes concentrate

Affordability problems

Harder access




Private renting

Is a satisfying rate of return realistic for providing

affordable housing for those in need?

If not:

stay out of the market

neglect maintenance/quality

ask rents that are not affordable

insecure contracts

During the industrial revolution private renting was the

majority tenure. The reason for establishing housing

policy




Lessons for future policy:

Governments can prevent speculation and bubbles

But: they can aim at more stable housing systems:

Not speculate on the real estate cycle (tax/land)

Protect from over speculation (financial markets)

Interaction rental and owner occupied market

Housing is a basic need, adequate housing prevents

many other problems

Governments need to rethink their role in housing:

Reconsider promoting the dream of home ownership

Facilitate arrangements based on solidarity and trust: social

innovation and social enterprises




Lessons for future research:

Create better understanding of housing systems by:

Focus on behaviour and institutions

Acknowledge that housing is connected to welfare,

economy, urban development & sustainability

Better comparative research and understand

conditions for mutual learning

Integrate network: the role of intergenerational

solidarity

changing housing systems and the risks for social exclusion

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