The Role of Social Housing: An International Perspective

1. The Role of Social Housing:An International Perspective Presentation for Firm Analytical Foundations: Scottish Government 22/4/08 Professor Mark Stephens

2. Firm Foundations • Firm Foundations paints bleak picture of Scottish social rented sector: • Decline: • Predicts continued growth of owner occupation • Social composition changed from • typical of society in 1981 • now disproportionately workless, elderly, sick, single • concentration of srs in deprived areas • But talks of its “reinvigoration”: • Wider range of suppliers (inc. private) • Wider range of “products” (mid mkt rent) • Discharge some homeless duties through prs • Physical and neighbourhood quality/ mix

3. 12 country review: Size/ trends in srs Ownership Demand Eligibility Allocations Income mixing Excluded households Homelessness International Evidence

4. Roles of Social Rented Housing • Supply function: • to meet housing shortages • Affordability function: • improve quantity and quality of housing consumed for a given income • Safety net function: • prevent homelessness among those unable to access housing through the market

5. Size of Social Rented Sector

6. There is always national demand for Social Housing: its decline is a matter of policy

7. Use of Private Landlordsas Social Landlords • Germany: • Historic system of defining “social” housing by receipt of subsidy •  time-limited social housing provided by private landlords • USA: • Private landlords whose properties are approved can receive rent-reducing subsidies that are attached to the property (i.e. they continue when the tenants leaves). • There are also portable voucher-like subsidies that can be used in the prs, but they end when the tenant leaves.

8. Eligibility • Almost always income (and other) limits • But % population varies greatly • Various groups often excluded: • Rent arrears, anti-social behaviour, criminal convictions • Where programmes tightly prescribed (US) eligibility virtually determines allocation

9. Allocations • Matter most when eligibility drawn broadly: • Most systems work with a combination of ‘need’ and chronology • LA nominations a frequent feature • British legally enforceable right to housing (homelessness) unique • Outcomes (who actually housed) vary greatly: • ‘need’: English speaking countries • ‘affordability’: Europe – but how does this work?

10. Use of Sub-Sectors for Excluded Households • Sub-sectors: • Lower rents and quality • Less security • Additional conditions • Examples: • Swedish “secondary” housing • French “very social” sector • Czech “holobyt” system • Hungarian “emergency” units • Polish “social” housing

11. International Typology of Role of Social Rented Housing Very Poor and with Special Needs (USA, Canada, Australia) ↓ Very Poor (UK: 50% national average income) ↓ Below average incomes, but exclude very poor and most vulnerable (France, Denmark, Sweden: 70% national average income)

12. Role of SRS relates to Social/ Economic Context • Safety net role where high levels of poverty/ inequality: • Most effective when combined with large srs let on basis of need. • “Ambulance” role where high levels of poverty/ inequality + weak welfare state + small srs. • Affordability function: • Associated with countries with less poverty/ inequality • But poorest in these systems often actively excluded

13. What does this imply for Scotland? • Do we look at the “problem” from the wrong end of the telescope? • Profile of social tenants a product of high levels of poverty (+ demography) • + a strong housing policy •  solution is not to abandon srs

14. Relevance to Firm Foundations • For social mix: • Providers are a secondary issue except • where alternative landlords used to disperse poor. • Mid-market rent: implies trade-off, but justified if benefits to poor through neighbourhood externalities?

15. Evidence Gaps • We do not know the economic value of housing to its occupants; nor how this is distributed. • We do not know the economic value of subsidies of housing and its distribution. • Need property values in all tenures in SHCS.