Q: You worked as a housing expert in the EU Urban Agenda – Housing Partnership. In the final document, the “Action Plan”, the term ‘affordable housing’ is defined in the so-called housing continuum. Could you please describe the housing continuum.
Housing systems in the European Union are rich and diverse, and the EU Urban Agenda Housing Partnership reflected that wealth. However, diversity also means that the terms such as ‘affordable housing’ can be interpreted in many different ways. The concept of ‘affordable housing’ was central to the EU Urban Agenda Partnership on Housing. The Partnership aimed “ensuring an adequate supply of good quality affordable housing across the European Member States’’.
However, I noticed early on that the Partners had very different interpretations of the term ‘affordable housing’. For some, ‘affordable housing’ was just a synonym for their traditional ‘social housing’; for others, it meant rental housing cheaper than the market but more expensive than social housing. For a number of partners, the term ‘affordable housing’ evoked complex discussions about the potential measurements of affordability and what that may mean and for whom. This complexity and diversity needed to be addressed to provide a robust action plan and unite the partners behind their common goal.
As an advisor for the European Commission and the Housing Partnership, it was essential to find and devise a solution that would accommodate that diversity and richness rather than hinder it. In other words, I was looking for a theoretical framework that could embrace all Partners’ interpretations of the term ‘affordable and ensure unity without uniformity and diversity without fragmentation. Another important point to me as a scientist and a practitioner was to make sure that whatever framework is adopted, the wealth of real-life affordable housing solutions behind various interpretations have their rightful place.
So, I started by interviewing the partners about their interpretations of the term ‘affordable housing’ and analysed their responses. This analysis led me to adopt the ‘housing continuum’ as a unifying concept that I later modified to serve the interpretations of the EU Urban Agenda Housing Partnership members.
The Housing continuum presents a range of housing options from emergency housing to various types of affordable housing (i.e. subsidised or otherwise state-supported housing) and market housing.
The advantage of the housing continuum is that it could be populated with various housing tenures, from the emergency shelters on one extreme to homeownership on the other. This also means that different affordable housing solutions and interpretations put forward by the Partnership members (as well as in the EU member states more broadly) could find their rightful place. This is important not only as a conceptual solution but also to encourage the continued provision of varied housing options and solutions to respond to the diverse housing needs.
Q: How would you define affordable housing?
Clearly, there are many ways to define ‘affordable housing’. What is much less often discussed is how and when the term emerged and what it meant originally.
Twenty years ago, there was no debate about what ‘affordable housing’ meant simply because the term was not used. Social housing was built to provide cheaper housing to those who were not able to afford the market price. The discussion about affordable housing started in the USA with the neoliberal policies advocating against investment in public housing and following disinvestment in social housing in line with Thatcher’s housing-related policies in the United Kingdom. Therefore, in its original meaning in the native English speaking countries – the UK and USA, affordable housing meant broadly rental housing that received less funding from the state than social or public housing. It referred to rental housing tenure that was cheaper than market housing but more expensive to rent than the public or social accommodation in the same market.
The discussion about the meaning of the term ‘affordable housing’ in Europe picked up in recent years and became more prominent after the Global Financial Crisis of 2008. The Global Financial Crisis led to the diversification of the housing need and a need for diverse, affordable housing solutions.
In terms of a definition per se, I support and stand by the conclusions we collectively arrived at in the EU Urban Agenda Housing Partnership.
Q: What are the main reasons for Europe’s housing crisis you identified in your research?
That is a question that requires quite complex and potentially lengthy repose. I will try to provide some key general points for your readers here. My research into the housing crisis began right after the Global Financial Crisis of 2008. That crisis presented a turning point in housing in Europe, even though the problem did not start on our continent. Since the Global Financial Crisis, housing need has not only increased; it has also diversified. In other words, we have noticed housing distress climbing up the income leader from no-and-low-income groups to medium income and, in some cases, middle-class households.
Critically, since 2010, the housing prices in Europe have been growing faster than incomes. Depending on the exact definition used, ‘housing’ is usually the most significant item of household expenditure in Europe and one that is steadily increasing. Today, around ten per cent of the EU population suffers from housing cost overburden, while homelessness and social housing waiting lists are growing.
In cities with high housing demand, prices are rising too steeply, and consumers and businesses are buying at a rate that exceeds an economy’s underlying ability to produce housing goods. To illustrate, in some European cities and city quarters, the housing prices are increasing more than 30% annually, which is hard for any first-time buyer or growing family to plan for or surmount with their income.
Clearly, housing need differs between countries and within them. The presence of low and high housing demand areas (so-called ‘heated markets’) highlights the complexity of housing need and the diverse nature of such a need within cities and within individual countries’ housing markets.
Nonetheless, it should be highlighted that the lack of housing affordability is a critical matter. It has been recognised that inequalities in education, health, employment, and earnings combine, resulting in significant differences in lifetime earnings across different population groups. However, what has not been sufficiently acknowledged is that high housing costs exacerbate these differences and may permanently impede social mobility. Moreover, they translate these differences into the built environment, resulting in spatial segregation. These issues are critical to consider and address today as we face the COVID-19 crisis, anticipate economic recession and housing distress as the result of it.
Q: There are people who are convinced that the market will solve the housing problem without government intervention. Is there any empirical basis for this thesis?
No. There is no empirical basis for this thesis. If there were, there would not be structural housing shortages. It is essential to clarify what is routinely meant by ‘the market’ in the context of housing. While interpretations may vary, in everyday jargon, ‘the housing market’ most often refers to the commercial housing providers or developers that build new housing for commercial sale.
However, not much is known about these actors nor their behavior in academia, policy or practice. The commercial housing providers or developers provide housing but do not have in any way a statutory obligation to solve or know about housing problems or shortages. As any commercial product provider, they deliver goods that they sell (if there is anyone to buy). Even though we speak about ‘a market’ assuming some sort of coordinated behavior among these actors, this is only a theory among many. In practice, commercial property providers and developers compete against one another and act independently.
In order to ensure any publicly identified challenge or problem is tackled, there is a need for the intervention of the state, as is the case in the heath or food sectors. In other words, the state (at the appropriate tier of government) must take a role of, at least, a guide and enabler to ensure that the right market and non-market actors are mobilized and enabled to address the issues that are recognized as ‘problems’ by different tiers of government and society.
Q: What should be changed in policy making in the EU in order to create more affordable, energy-efficient housing for all?
First and foremost, at the EU level, it is important to reiterate that housing matters, not only as a part of other policies but as a distinct policy field with social, economic, and territorial significance. Having an EU body that is uniquely responsible for housing is a vital need. This is a fundamental change that needs to happen to comprehensively and effectively facilitate numerous efforts required in housing, some of which were noted in the EU Urban Agenda Action Plan or the recent report on Access to Decent and Affordable Housing for All adopted by the European Parliament. An increasing number of European policies and funding streams affect the housing sector even though this is not the mandate set forth for the European Union in the Maastricht Treaty. These need better coordination as well as clear aims and objectives, not just for individual policies but also for the mix of policies to ensure their system-level coherence.
Addressing the question of our common European housing is more important than ever today in the face of the COVID-19 crisis. The COVID-19 pandemic is leading to severe socio-economic disruption and hardship, despite an exceptional policy response. An unprecedented fiscal stimulus and other measures at both national and EU levels helped cushion the crisis’s impact. However, the COVID-19 pandemic has triggered one of the worst job crises since the Great Depression. While social welfare acts as a temporary stop-gap, many Europeans, especial