OECD Forum 2019 Session: Housing: Your Investment, My Home

OECD Forum 2019 Session: Housing: Your Investment, My Home

This OECD Forum 2019 background note will be used to prepare speakers on the panel Housing: Your Investment, My Home, taking place at the OECD headquarters from 09:30-10:45 on Tuesday, 21 May. Join the Forum Network to comment and help inform the upcoming debate and, whether you're with us in Paris or watching online, let us know what you think of the session!

Access to good-quality affordable housing is fundamental to people’s well-being, and is essential to reducing poverty and building more equal and inclusive societies. Yet, for many people this is a distant reality. We are in the midst of a global housing crisis, which could leave as many as a third of urban dwellers—1.6 billion people— struggling to secure decent housing by 2025.

Global capital markets are having a transformative impact on our cities, with wealthy investors buying up housing stock, driving up prices and leading to the displacement of resident communities, often on lower incomes. Rising house prices are also imposing new pressures on the middle classes who are being squeezed by a combination of stagnant wages and increasing education and health costs. Younger people are worried about their future prospects and often struggle to get onto the property ladder. According to the United Nations Special Rapporteur for Adequate Housing, Leilani Farha, “Housing has lost its social function and is seen instead as a vehicle for wealth and asset growth, robbed of its connection to community, dignity and the idea of home”. 

Homelessness is also on the rise since the Global Financial Crisis – and not only in poorer countries. We’re seeing worrying levels of homelessness in the richest countries in the world – in North America and Europe – including in countries such as Denmark and the Netherlands with developed social welfare systems. Homelessness exacerbates the difficulties faced by families – health problems, job insecurity and poverty. Some countries are fighting back, however, including Finland which has been successful in nearly eradicating homelessness through its “Housing First” initiative, showing that progress is possible. 

Most countries are making commitments to provide more affordable housing for their citizens, but policy action has not always been as decisive as in the case of Finland. Indeed, in some cases, such as the UK, government action has arguably been mitigated due to the significance of property finance to the economy. Countries such as New Zealand have experimented with policies to ban foreign non-residents from buying property in an attempt to keep prices down. In Vienna in Austria, rent controls have made the city one of the most affordable, including for workers on low wages such as nurses.

With the decline in social housing in many countries, the private rental sector is overtaking governments as the provider of affordable housing to low-income households. This comes with a host of challenges: the private rental market typically offers tenants less value for money, poorer quality housing and weaker protection from eviction. The most vulnerable low-income households fare the worst out of this system. Deprived of options, these households pay the most and put up with the worst. Further work is needed to understand how governments can successfully and effectively support the supply of affordable rental accommodation through the private market. 

A further challenge for governments is the need to invest in sustainable and zero emissions housing in view of the significant contribution of the housing sector to global emissions. 

  • What is the reality on the ground as regards affordable housing? How real is this housing crisis?
  • Has housing lost its social function, seen instead as a vehicle for wealth and asset growth?
    • How has wealth inequality exacerbated this problem?
    • Are countries helpless in the face of foreign investment in property, or is it more a case of them encouraging it?
  • Why are we not seeing progress in more countries on affordable housing and homelessness?
    • Are we lacking evidence on effective policy responses or is it more a lack of political will?
    • What is the future of social housing? What countries can we learn from? How important is it to integrate social housing, including new developments in affluent areas?
    • What are the links between investment in social housing and reduction in homelessness? What does the example of Finland teach us?
    • How can governments support the supply of affordable rental accommodation through the private market?
    • How can an organisation like the OECD help?
  •  Is sustainable, carbon-neutral housing compatible with affordable housing? What are the links between affordability and sustainability?

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