This article is part of the Forum Network series on New Societal Contract
This session explored the roles and responsibilities of governments, financial institutions and property developers to ensure more fairness in housing markets and better homes for all. The main discussion points concerned the economy and availability of housing and the resulting social problems caused or exacerbated by inadequate living conditions.
A decade ago, excessive lending for residential property and insufficient financial sector regulation played an important role in triggering the global financial crisis; today, many households across OECD countries struggle with their monthly housing costs. On average nearly 15% of tenants and 10% of mortgage payers spend over 40% of their disposable income on housing costs. Low-income households are disproportionately overburdened despite many OECD member countries promoting access to affordable housing as a key element of policy.
Housing needs are frequently unmet and, with a significant number of people living in low-quality dwellings, the panel agreed that governments need to reconsider how policies should be designed. Adequate housing for citizens, both old and young, supports growth in long-term living standards and strengthens macroeconomic stability. Bjarne Hastrup, Founder of DaneAge, felt that despite increasing pressure on the elderly to move into smaller, "more suitable" homes, provisions should be made to allow them to stay in their own households. He added, “[Denmark’s] parliament has recently introduced a reform which will push the retirement age to 70 by 2040 and 75 to 2060. This means while the population is growing, the number of pension years is not. There are not enough buildings in Denmark to cover this issue”. However the general consensus was that young people are hit hardest by the current situation, summarised by Jean-Baptiste Eyraud, Spokesperson for Droit au Logement: "Throughout the world, the younger generation is the worst-housed".
Governments use a wide and complex set of instruments to implement their housing policy, including subsidies to homeowners, tax relief for the purchase or ownership of property and the provision of social rental housing. While annual spending often tops multiple points of GDP, not all instruments are coherent with the goal of promoting access to affordable housing for all; indeed, many fail, particularly concerning the needs of low-income households and young people. Bjarne Hastrup suggested that retirement funds could be used to provide the next generation with opportunities to escape the shackles of low income and increasing rent prices. He explained money released from pension pots could be put towards housing and investment in real estate: “Denmark has developed labour market pension funds for everyone but they are inaccessible to the young… pension funds are the people’s money, not the government’s money”. Jean-Baptiste Eyraud also raised the issue of potentially “hostile systems like Airbnb” that encourage increased rental prices.
Stav Shaffir, a member of Israel’s Knesset, gave an example of how community links could be built from the bottom up to leverage public participation in housing policymaking. Five years ago a housing crisis in Israel, which saw the average number of monthly salaries required to buy a home soar to 148, roused 10% of the population to take to the streets in one of the country’s biggest protest movements. After creating a Facebook group that received 500 comments and stories in 24 hours, she began work on a rent regulation bill. Initially opposed by the government, the legislation was passed three years later, in no small part due to the thousands of signatures she received in support of the motion: “It is a result of the public defining what they want, creating political power that allows us to make it work together with professional information”.
Access to good-quality, affordable housing is a fundamental need and can help to achieve a number of social policy objectives, including reducing poverty and enhancing equality of opportunity, social inclusion and mobility. As Content Director for Europe at the Urban Land Institute, Elizabeth Rapoport’s work focuses on how communities can build positive social capital: “Urban development can promote physical and mental well-being, combat isolationism and loneliness and prevent radicalism”. Stav Shaffir echoed this, stating that, “once a strong community has been built, it is easier to tackle other challenges like poverty levels or socioeconomic gaps”.
However there were differing opinions as to whether inclusive communities could help combat these more abstract problems. Jean-Baptiste Eyraud agreed that, “the question of community is important, the ability for people to know one another, speak and live together in their own neighbourhoods” but did not, “believe that urbanism will regulate questions of terrorism”. Sofie Rédelé, Senior Project Developer at Re-Vive, used her experience of working in Molenbeek, Belgium to inform the discussion and gauge the impact urban planning can have on preventing radicalisation. Even before the November 2015 terrorist attack in Paris it was difficult to find investors or allies for a place Donald Trump once called, “a hell hole” and she commented that, “it is more difficult to build communities than houses; it is not just a case of numbers”.
A Wisembly poll seemed to reflect a positive appetite for change: asked, “Do you support a legal and mandatory right to affordable housing?” an overwhelming 94% of voters responded yes. Building on this for the future, Sofie Rédelé urged that cities in need of investment and with low social mobility should, “not be approached as hopeless crises but as opportunities for inclusion”.
- How should government policy evolve to meet citizens’ needs for affordable, high-quality housing?
- Is ownership the answer? Are there innovative new ways of mobilising public and private sector resources to boost rental housing options?
- Do you support a legal and mandatory right to affordable housing?
The Forum Network is an interactive space where concepts are challenged and new ideas are formed to shape better policies for better lives. Comment below to give your thoughts and continue the conversation!
Got a few more minutes?
- Achim Lippold, Foreign Desk Journalist, RFI, France @AchimLippold
- Jean-Baptiste Eyraud, Spokesperson, Droit au Logement, France
- Bjarne Hastrup, Founder, DaneAge
- Elizabeth Rapoport, Content Director, Europe, Urban Land Institute @eliz_rapo
- Sofie Rédelé, Senior Project Developer, Re-Vive
- Stav Shaffir, Member, Knesset, Israel @stavshaffir