What is social housing?
In Denmark social housing or, more specifically, not for profit housing consists of housing for rent provided at cost prices by not for profit housing associations. A specific feature of the Danish social housing model is the principle of tenants’ democracy, which is basically a way to organise the running of each housing estate based on the central role played by residents. Currently not for profit housing makes up about 20% of the total housing stock in the country.
Who provides social housing?
Social housing has been provided since the turn of the 20th century by non-for-profit housing associations. There are about 700 housing associations, which own 8,000 estates, also defined as “sections”. They are legally regulated by the state, but owned and organised collectively by the association members themselves.
How is social housing financed?
A project is usually financed as follows: 91% of the capital is borrowed by the housing association from banks; the municipality pays 7% of the cost up front in the form of an interest-free loan for base capital, and guarantees part of the mortgage; the remaining 2% is covered by tenants’ deposits. Furthermore, individual housing allowances from the municipality are available for tenants who need help in paying the rent. The model for financing social housing in Denmark also includes a revolving fund: by law, social housing must be rented at cost rents, which are based on historic costs. Rents are not reduced when mortgage loans are redeemed. Instead the proceeds going to the National Building Fund, established in 1966, which is used by not for profit housing associations for renovation work and most recently also to finance new construction.
Who can access social housing?
Waiting lists are open to everyone from a minimum age of 15 years. The majority of vacant units are assigned by the respective housing associations on the basis of time on the waiting list and household size. Although there are no income ceilings for beneficiaries, there are limits for costs of construction and therefore rents and size of the dwellings. Furthermore, there are priority criteria for the allocation of dwellings, defined on the basis of local conditions.
Priority can be given for instance to families with children, disabled people, refugees, elderly, students, divorced people, people who need to move closer to their work. In deprived areas with many unemployed inhabitants, priority can be given to “role models” such as people with a job or students.
Finally, municipalities have the right to assign tenants to at least 25% of vacant housing association units and they have in some cases, in agreement with the housing association, reserved a right to approve all assignments. In case of direct allocation by the municipality, beneficiaries so not have to be registered on a waiting list.