Willem, what was your personal motivation to deal with affordable and social housing?
Willem: I have worked on social policy for many a year, and while social policy analysis across the OECD find housing a very important issue, responsibility for housing policy development mostly lies outside social policy ministries – ranging from Ministries of Economy to Environment Ministries to dedicated Housing Ministries. I think it important to bring the two perspectives together, and I hope to have a made a small contribution to that.
Why does the OECD provide data on housing? What does the OECD expect from this?
We develop cross-national datasets with several objectives in mind.
First, we aim to improve the comparability of countries’ housing outcomes and policy efforts. For instance, last year we released a policy brief and related indicators on homelessness. What’s key to understanding the data is that homelessness is defined and measured very differently from one country to another – which has clear implications for comparing outcomes across countries. Australia records a much higher rate of homelessness than Japan, for instance, but this is largely because Australia has a much broader definition of who is homeless. We encounter similar challenges in measuring eviction rates across countries – evictions procedures and national evictions registries are not necessarily counting the same thing. In order to compare outcomes, we have to ensure that we are comparing “apples to apples.”
Second, our job is to help policy makers consider experiences in other countries and – where possible – learn from these experiences to improve national policies. For example, in our work with Latvia, we drew on the experiences of Austria, Denmark and the Slovak Republic in developing revolving funds to finance affordable housing.
Could you please say a few words on the sources of the data and on the previous update of the database?
There are different information sources that underlie the indicators in the OECD Affordable Housing Database (AHD). The most important are country responses to the OECD Questionnaire on Affordable and Social Housing (QuASH) and information in household budget and expenditure surveys (such as EU-SILC or national sources for OECD countries that do not belong to the European Union).
Other OECD database also feed into the Affordable Housing Database, such as the OECD Social Expenditure Database, the Economic Outlook database, the National Accounts and the Classification of the Functions of Government (COFOG). In all, the OECD Affordable Housing Database brings together a range of relevant data on affordable housing for nearly 50 countries.
Besides the database, what other offers does the OECD provide to the states for improving their housing policies?
We have used the information in the OECD Affordable Housing Database to develop a range of analysis to help governments improve their housing policies:
- Cross-country policy briefs on Homelessness, Social Housing and Affordable Housing Policies; in May this year we will release a brief on Housing and Disability.
- Country-specific analyses of housing affordability Latvia; this year we will begin a new project with Lithuania).
- Other cross-cutting housing work, such as our report on Housing and Inclusive Growth, which aimed to identify the various groups who faced particular barriers to accessing good quality, affordable housing.
- This is all part of broader, OECD-wide “horizontal” project on housing that involves colleagues around the OECD, including the Economics Department, the Centre of Tax Policy and Administration, the Environment Directorate, and the Centre for Entrepreneurship. The range of OECD’s housing work is compiled in the new Housing Gateway.
Why do the countries fail to provide their citizens with decent and affordable housing? What are the most considerable obstacles?
All countries face affordable and decent housing issues. But country experiences are very different.
- In Eastern European countries, homeownership is widespread due to the privatisation of much of the housing stock after the dissolution of the Soviet-Union. However, many have found maintenance costs to be expensive and as a result quality issues have emerged.
- In general, OECD countries tend to rely on market solutions to address housing challenges (both with respect to homeownership and rental housing). However, the price of rental housing has increased rapidly since the mid-2000s in all but two OECD countries (the exceptions are Japan and Greece), and in many countries, affordability of private rentals has become a big challenge. Only countries like Austria, Denmark and the Netherlands have a large social/subsidized housing sector, but there too, affordability issues have come to the fore.
- One big factor that has contributed to the affordable housing shortage in many OECD countries is that on average, public investment in housing development has been cut in half since 2001. In short, many governments are spending a lot less to build houses than they used to.
Which groups of the population are especially affected by the housing shortage in the OECD countries?
The most extreme form of housing exclusion is homelessness. While middle-aged single men continue to be overrepresented among the homeless in most countries, we see increasing numbers of homeless women, youth, seniors, families with children, and migrants. In addition, several other groups increasingly face challenges in accessing good quality, affordable housing: low-income households (especially renters), young people, seniors and families with children. For instance:
o Around one-third of low-income renters spend over 40% of their disposable income on housing costs, and are thus considered “overburdened” by housing.
o On average across the OECD, the majority of young people aged 20-29 still live with their parents. The share reaches around 75% of young people in Italy, the Slovak Republic and Greece.
Would you please tell me the most important recommendations from your point of view when it comes to affordable housing?
First, in the current context of COVID-19, it remains important to house the homeless, but it is also crucial to assure that despite income losses, people do not lose a roof over their head. For example, eviction bans, and mortgage holidays measures have an important role to play as the pandemic continues. Rent stabilization measures can also be important tools to enhance affordability, but there is a risk that in the long-term they dampen private rental supply.
Furthermore, over the past two decades and in particular, since the Financial crisis of 2008/9, direct public investment in housing has fallen across the OECD on average. That trend has to be reversed and renewed public investment in affordable and social housing will be key to an inclusive economic recovery.
Another area for consideration is to better target public housing support to reach households in greatest need. This is especially relevant in the context of scarce public resources. For instance, in some countries, this could include potentially phasing out tax advantages that favour homeownership at higher income levels. Eliminating (or capping) mortgage interest rate deductibility or curtailing capital gains relief on owner-occupied housing can help make housing taxation more progressive.
Have a look: OECD Housing Gateway