2012 Housing Europe Review – The nuts and bolts of European social housing systems

Foreword

Vit Vanicek,
President of the
Union of Czech
and Moravian
Co-operative Housing
and of CECODHAS
Housing Europe

Dear Reader,

The first review that CECODHAS HOUSING EUROPE’s Observatory carried out of the EU social housing landscape was published four years ago. At that time our country profiles filled an information gap on social housing policies in Europe, and were widely welcomed.

Since then, the policy contexts in which housing policies developed have changed dramatically. In 2007, the policy trends were focusing on supporting private home-ownership and construction of new housing. In continental Europe, social housing stocks were decreasing slowly as a proportion of the total housing stock as more private housing were built. The prices were, almost everywhere unaffordable for low-income and creating residential bubbles in places of housing shortage while in Ireland and Spain economic growth was fuelled for a decade by the construction sector.

In autumn 2007, the over-indebtedness resulting from the unaffordability of housing for low-income groups, crashed the global financial system, leading to a major crisis, known as the subprime crisis. This crisis is on-going and has developed over the last two years, into a public debt crisis. As a response to the crisis, a number of countries have decided to invest and support social housing production as a way to sustain growth in the construction sector. These measures were shortlived and have been over-shadowed by a political landscape dominated by austerity programmes. As this report shows only very few members are still building new social housing at a substantial pace (such as France, Austria, and Denmark).

In the UK, planned drastic changes in social housing policies could bring opportunities and threats for our members, the social housing associations, but will not deliver a response to the growing need for really affordable housing for low-income households and the growing numbers of homelessness.

Everywhere, the financial sustainability of the sector is brought into question as the two pillars of most widely used social housing system are being put under pressure by budget cuts. In Northern and anglo-saxon Europe, social housing rents are fixed at cost-level with tenants receiving housing benefit as determined by their income to reach the level of the rent. On the one hand, the costs of housing depend on the state aid received. This state aid is currently being cut everywhere meaning that the current rent levels applying in social housing are set to increase. The UK future reform of social housing policies is emblematic of that trend. On the other hand, housing benefits are being cut, with a dramatic impact on disposable income of poor households.

A consequence of these drastic public spending cuts, may be that social housing providers will be asked to find new financial sources for housing low-income households, thus enlarging the scope of their activities as the only way to fulfil their mission.

It is interesting to see also that in Eastern and central Europe, new legal frameworks for non-profit rental housing providers are being developed. In Slovakia, the State Housing Fund has started to deliver affordable housing while in Bulgaria a law will soon give legal certainty to develop affordable housing.

In conclusion, while the social housing systems across Europe have more than 100 years of history in a number of countries, the social housing providers are stable and the rules are clear, the broader context has been changing substantially over the last five years. Social housing is now seen as a very important economic stabiliser. Housing market stability must create conditions under which all citizens can find an adequate answer to their needs. The trend of housing policies to focus public support on homeownership has been increasing wealth inequalities over the last decades, and hopefully has come to an end.

There is still some work to be done in order to achieve more balanced housing markets, with affordable prices and housing and places where people wants to live. This report will give you an overview of the social and public policies in EU. In a year’s time, we will complete this review with a description of cooperative housing to show the importance of diversity of housing as the key to a sustainable society and economy.

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Introduction

Aims

This Review provides an update of the 2007 report Housing Europe 2007- Review of social, co-operative and public housing in the 27 EU member states. While the previous review aimed at providing an overview of the main development in housing policies and housing markets affecting the social, cooperative and public housing sector, the current study focuses on social housing and aims at providing a clearer picture of the way social housing systems are structured across the EU, while identifying the main recent trends in the sector.

Methods

This Review draws on the main and most recent statistical reports and specialised literature available to this date (October 2011), listed in the reference section.

It also represented an opportunity to take stock of the work of CECODHAS Housing Europe Observatory over the last 3 years, as this report was fed by a number of studies we have carried out since 2008, as indicated in the references.

Finally, as for the 2007 Review, this study would not have been possible without a consolidated network of correspondents, including both experts from CECODHAS Housing Europe member organisations and external national experts, who proved particularly helpful in covering those countries where CECODHAS housing Europe does not have any member organisation.

Themes and structure

This Review is structured in three chapters. Following these first introductory remarks, the first chapter presents a short overview of the context in which the social housing sector is embedded, namely the characteristics and recent developments in the housing markets, in terms of housing tenures and availability, affordability, quality and demographic trends impacting housing demand.

The second chapter brings together the information presented in the country profiles, providing a brief analysis of the social housing sector from different perspectives: the diversity of definitions at the national level and common characteristics across Europe, the size of the sector, which kind of actors are involved in social housing provision, who can benefit from a social dwelling in the different national contexts, how the sector is financed and what are the most innovative solutions in this sense.

The third chapter presents the 27 country profiles of the social housing sector. Each of them includes a collection of ‘facts and figures’ summarising some key housing and related indicators in the country.

 

READ THE REVIEW

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