Social Housing: another French exception?

1. Social Housing: another French exception? Christian Tutin Professor of economics University of Paris East (Créteil) and GIS Réseau Logement / Habitat Prepared for the Central and East European Workshop on Social Housing M.R.I. Budapest, 6-7th october 2008

2. I – Housing tenures and public delivery: the European diversity • Social housing in Europe: • 22.5 millions housing units ; • 10.5% of the total stock • High degree of diversity: - from 34% in NL (155/1,000 inhabitants) ; - to near zero (GR, EST) ; - France : 18% (70/1,000 inhabitants)

3. Where is « normality » ?* Over 15% ?* Between 5% and 10% ?* Below 5% ?

4. Not only the weight of social housing (absolute or relative), but the combination of tenures • Three patterns + special cases: « Mainstream » : AUS, CZ, DK, FI, FR, SW + PL (?)  - Moderate rate of owner-occupation ; - Strong social housing sector (>12,5%) - Non-residual private rental sector « Mediterranean » : BUL, EST, GR, IT, PG, SP + LUX & BE - « Invasive » owner-occupation ; • Inexistant social sector • Residual private rental sector (≠ BE + IT)

5. « Eastern » : HU, LIT, RO, SL, SV + IRL - Dominant home ownership - Residual social housing sector; - Representing a significant part of the total rental sector« Special cases » : NL, UK, GE

6. North-western « mainstream » group + NL & UK = 17 millions units of social housing = 77% of EU’s social housing stock

7. The relative weight of SH is inversely correlated with national wealth

8. 2. How much « exceptionnal » is the French way ? • Access to social housing: a « generalist » model (as in Austria) ; a lot of countries more restrictive, but some more « opened » (DK, SW). • Rent-fixing: a cost-based system, like in most other countries. • Ownership and control Shared between 2 groups of « registered social landlords »: • Public Offices (owned by local authorities) • « Social firms for housing » (non profit-maximising companies) Offices + ESH = the so-called HLM sector (3,9 millions units)

9. Plus « non registered » social land-lords So-called « mixed companies » (SEM), where local authorities are associated with private capital: 0,6 million units • And another 0.3 million units directly owned by municipalities, the State or public firms. As in many other European countries, the decision-making has been more and more decentralised in the last 2 decades : • Building permits in 1982 ; • Distribution of loans and other state aids in 2004.

10. Main specificities • The relative weight of private rental housing • Housing types and location - High proportion of flats in multi-units buildings ; - High degree of spatial concentration • Subsidies and funding - Direct (mainly below market interest rates) and indirect (fiscal) subsidies ; - A specific financial « circuit » for social housing, with: * A special savings booklet (« Livret A ») whose deposits are centralised and transformed by a public financial institution (the Caisse des Dépôts et Consignations – CDC) ; outstanding deposits = 125 billions € annual loans for the HLM sector ≈ 6 billions € * An employers’ contribution to housing (the so-called   »1% logement ») - More recently (2004), a massive urban renewal program

11. 3. General trends in Europe: towards residualisation ? 3.1 The UK: « containment », rather than residualisation • Dualist or « polarized » • Despite massive privatisations since 1981 (2.2 millions units sold to tenants in UK), the British social stock remains the largest one in Europe (4.9 millions units in 2006 – more than 5 millions until 2003), representing the same proportion of the stock as in France

13. Really « residual »: - Germany, - Ireland, - Eastern European countries (Hungary, )

14. 3-2 The Netherlands: stabilisation

15. 3-3 France: continous growth or smooth decline ? • No decline of the social stock, either absolute or relative (on the contrary, slow but steady growth) • Decline as a proportion of new constructions (from 24% to 16% between the 70’s and 90’s), but more than compensated by purchases, and higher demolitions in the private sector (till recently).

18. Current debates and new trends Social housing under attack: • Doesn’t house those it should : • Too much middle-class household (in fact, no more than 15%) • Not housing the poorest (persisting homelesness) On-going changes • Reform in finance • Privatisations (objective of 40 000 sales yearly) • Future law (to be discussed in Parliament next week) will change rent regulation and security of tenure

19. Conclusions • The French case is not so « special » • Surprisingly, France is very close from « main stream » North-Western European countries • What lessons from the French experience ? - In a positive sense, the kind of funding system (use of private « guaranted » saved by a powerfull public financial institution) ; - In a negative sense, attention must be paid to the factors explaining the « suburb crisis » (physical design of buildings, excess of multi-family homes, obsolescence of big estates, spatial concentration) - In a dubitative way : the limits of decentralised procedures; lord-maires do not want very social housing; may be only the state, in partnership with « civil society » actors, can address homelesness