The Role of Social Housing:

An International Perspective

Presentation for Firm Analytical Foundations:

Scottish Government 22/4/08

Professor Mark Stephens

Firm Foundations

Firm Foundations paints bleak picture of Scottish social rented sector:

Decline:Predicts continued growth of owner occupation

Social composition changed fromtypical of society in 1981 now disproportionately workless, elderly, sick, singleconcentration 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 prsPhysical and neighbourhood quality/ mix

International Evidence

12 country review:

Size/ trends in srsOwnershipDemandEligibilityAllocationsIncome mixingExcluded householdsHomelessness

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

Size of Social Rented Sector

05

1015

2025

3035

40

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

0

10

20

30

40

50

60

1980

1990

2000

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.

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

Allocations

Matter most when eligibility drawn broadly:

Most systems work with a combination of ‘need’ and chronologyLA nominations a frequent featureBritish legally enforceable right to housing (homelessness) unique

Outcomes (who actually housed) vary greatly:

‘need’: English speaking countries‘affordability’: Europe – but how does this work?

Use of Sub-Sectors for Excluded Households

Sub-sectors:

Lower rents and qualityLess securityAdditional conditions

Examples:

Swedish “secondary” housingFrench “very social” sectorCzech “holobyt” systemHungarian “emergency” unitsPolish “social” housing

International Typology of Role of Social Rented

HousingVery 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)

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/ inequalityBut poorest in these systems often actively excluded

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

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?

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.