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Housing Affordability

All studies show it is needed but a simple obvious fact is preventing action…

Delft, 15 November 2016 | Published in Economy

Housing Europe & Aedes President addresses some of Europe’s most active academics in the field of Housing from the European Network of Housing Research (ENHR) on factors affecting Housing Affordability.

Report by Sorcha Edwards

Kicking of his presentation at the ENHR working group on comparative housing studies, Marc outlined his interpretation of why the EU is turning its attention to housing in a more positive way than in the past*. The block has traditionally focussed on macro-economics and trade to the detriment of the social dimension, which with the Brexit vote, is now threatening to pull it apart. This realisation is leading the EU to focus more on what holds communities together and promotes inclusion, which means housing and the (lack of) affordability along with its link to growing inequalities is inevitably coming albeit indirectly into the EU spotlight.

Marc spoke one of the less talked-about reasons behind the lack of effective policies to address housing (un)affordability i.e. the simple obvious fact that no home owners or private landlords are happy when the value of their home is dropping. In fact, developers, land owners, property owners are as a rule happy when house prices rise. The ones who want affordability are those who are in housing need. Those who are excluded from the housing market who do not own their own home or those who are over-burdened by housing costs often those renting in the private sector. And while 81 million people in Europe paying more than 40 per cent of their income on housing these people are not influential enough on the political scene to bring about a big change in policy in favour of inclusive housing policies.  He however cited the example of London where indeed the situation of housing affordability has become so extreme that it was the clinching factor for the success for Sadiq Khan in the last mayoral elections after he made this the focal point of his electoral campaign.

Marc also cited a lack of understanding among policy makers about the imperfect nature of housing markets which means they do not obey simple market rules of supply and demand. This often results in over-reliance on the market to solve housing problems and a lack of willingness to carry out the necessary interventions to ensure that housing meets society’s needs.  

Commenting on one of the findings of the Housing Europe Observatory’s State of Housing report in 2015 which is the increasing residualisation of the social housing and the increasing concentrations of poverty in the sector’s stock, Marc described what he sees as one of the keys to the success of the Dutch housing system which is illustrated by the lack of no-go areas in the cities and that is the mixing of income in neighbourhoods, not very rich with very poor but middle-income with low income. He added that in the Dutch neighbourhoods you cannot tell which is social housing and which is private housing and this should be the objective of every housing policy. This is a feature which is not appreciated enough until it is gone with no quick-fix solutions to addressing ghettoization on the table.

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Marc also outlined the need to analyse some of that other factors pushing the price up including the price of construction around Europe, in some countries more than others and compared the price to build per meter squared in the Netherlands which stands at €1,580 compared to Germany where the average price is over €3,000. A difference which is not really explained by lack of quality of Dutch stock implying that the reason must lie elsewhere. Access to affordable land for affordable housing providers is a big issue when it comes to achieving affordability needing some radical re-thinking.

The lack of government support for social housing was a topic at the centre of discussion among academics who questioned what they could do to change this. It was stated that politicians don’t act according to studies but according to their perception of what society want. If there are large popular movements to stop evictions for example this can make an impact but if there is no clear call from perceived influential segments of society, there will be no political action. The need to place housing firmly within discussions on broader economic issues to avoid it being side-lined as a purely and only welfare issue was also highlighted, with the recognition of resilience of housing systems with strong social, affordable and limited profit housing providers which could pursue anti-cyclical measures pursuing their mission of general interest, during and following the 2008 economic crash. 

*The establishment of the Housing Partnership under the EU Urban Agenda & The reference to  housing rights in the EU Social Pillar