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Housing & Inequality

Feb 27, 2019

‘Housing’ refers to all the kinds of accommodation people can live in.

‘Housing’ has an intimate connection to inequality and particularly to inequalities of income and wealth. The amount of income and wealth an individual has access to is a major determinant of the range of housing available to them. But a person’s housing situation can also variously affect their possibilities of acquiring income and wealth.

For example:
A person with a large and secure income can afford to rent attractive accommodation, or to make mortgage repayments on a substantial property. If [by virtue of prior savings, or inherited wealth, for example] they can buy outright, then they will avoid having to pay mortgage interest. Few may be so lucky, but the higher the amount of the purchase price that can be paid for straight away, the smaller the mortgage will be, and, often the lower the interest rate for the money that is borrowed. The wealthier may be able to buy the same property for less overall cost than the less wealthy.The person with a low and insecure income is much less likely to be able to buy a property at all, not least because they will have lacked the ability to save for any deposit. If they are unable to buy, they will have to look for accommodation in the rented sector.  This may offer them less security of tenure than the ‘owner-occupier’ typically enjoys, so they may also be faced with the prospect [and costs] of moving more frequently than they would wish. Unplanned and undesired moves may also negatively impact on their transport costs, ability to retain existing employment, childcare arrangements etc. The renter is also not accumulating wealth through their rental payments. By contrast, mortgage payments [apart from the interest paid] are not ‘lost’, but build up over time until the property entirely belongs to its purchaser. If, as has historically generally been the case, house prices rise over the years, then it is also likely that, when the mortgage is paid off, the property will be more valuable than it was when it was first ‘bought’. House purchase is often a means of accumulating wealth. House owners may also use their property to generate income through offering [all or some of] their accommodation for rent.

A whole raft of factors, including state housing policy, can make things more complicated than the above. This also means that even if patterns of income inequality remain constant, different degrees and kinds of housing equality/inequality are possible. For example, the local or national state can in a range of ways subsidise the housing opportunities of those on low income so that they can obtain better quality accommodation than they could afford on the open market. Rent control legislation is a possibility to set limits to how much landlords can charge their tenants, as is that increasing the renter’s security of tenure.  Low-cost deposits can be offered to new buyers by the state [although at the risk of increasing house prices]. Purchase costs can also be affected by, for example, taxes on purchase transactions and by planning legislation influencing the amount of land available for new builds or regulating the conversion of non-residential properties to new uses. The ‘advantages’ that go with higher income and wealth levels can also be reduced by, for example, taxing the capital gains that accrue from rising house prices, or by instituting progressively higher local [e.g. council] taxes for more expensive properties [income which could then subsidise the social housing stock]. Thus there are lots of issues to be researched and debated about what might constitute the best way of reducing inequalities of housing life chances – even in a situation when income and wealth inequalities remain.

Renting and social housing

Shelter is a major source of information about contemporary housing policy. Following the Grenfell Tower disaster it established a commission to consider how a better future for social housing could be established.  Its final report, Building our Future: a Vision for Social Housing [and a summary of it] can be accessed at https://england.shelter.org.uk/support_us/campaigns/a_vision_for_social_housing
The report notes ‘from the Second World War up to 1980, we were building an average of around 126,000 social homes every year. Last year, there were only 6,463 new social homes.’  Their diagram [see box below] also shows how, from the early 1980s, there has been a major decrease in the proportion of new housing builds in the social sector.


The report suggests we should be planning to build 3.1 million new social homes over the next 20 years and provides some costings for this [and a proposal for land reform to reduce the cost of this type of housing].

Besides advocating building more social housing, the report also makes interesting recommendations for ways in which the legal situation of renters in both the private and social sector should be reformed. It suggests there should be:

  • A new regulator for all renters, to proactively inspect and enforce high standards.
  • The removal of barriers for social renters seeking a solution to their problems.
  • Permanent tenancies for private renters.
  • A new independent tenants’ organisation to represent the views of social renters to government

Do have a look at the full report for much more detailed analysis!

What about Wales?

Data and reports provided by the Welsh Government can be accessed via its portal https://gov.wales/topics/housing-and-regeneration/?lang=en

A significant date? From the 26th January 2019 council house tenants in Wales will lose their ‘right to buy’ [as the consequence of the ‘Abolition of the Right to Buy and Associated Rights (Wales) Act 2018]. https://gov.wales/topics/housing-and-regeneration/legislation/abolition-of-right-to-buy-and-associated-rights/?lang=en Many housing campaigners see the Right to Buy legislation as having had a disastrous impact on the amount of available social housing.

Shelter Cymru is another source of information relating to housing in Wales. See https://sheltercymru.org.uk/

This web-site has a particular focus on homelessness – see its useful list of 9 warning signs that may indicate someone is about to lose their home https://sheltercymru.org.uk/wp-content/uploads/2017/12/9-signs-printing-V-final.pdf However it also presents details of the organisation’s present housing campaigns – e.g. that to end ‘No Fault’ evictions – and of past campaign successes – in particular to get the Welsh Assembly to commit to legislation ending letting fees.
https://sheltercymru.org.uk/localhousingreportswansea/ offers some documentation of Swansea’s housing situation [for example; only 243 social houses built in Swansea ‘last year’, but 5667 households on housing waiting lists in the area and around two and a half thousand empty private homes].

Examples of good practice

Look at Falk, N. and Rudin, J. [2018] Learning from International Examples of Affordable Housing

The Urbed Trust https://england.shelter.org.uk/__data/assets/pdf_file/0008/1641176/International_examples_of_affordable_housing_-_Shelter_URBED_Trust.pdf
Here you can find examples of good practice from Austria, Denmark, France, Spain, Germany and more.  There are many different ways of doing things, but useful potentially transferable lessons are summarized for each of the documented cases.  The studies get one thinking about, for example, the significance of how much land urban authorities own,  the character of planning regulations and the impact of different land and housing tax regimes, the role of public development agencies, and the part tenants can play in managing social housing.

The website of The International Observatory on Social Housing is also worth a browse. https://internationalsocialhousing.org/  Although American biased, you can also find interesting comparative material here.  Read for example about ‘How a public housing authority transformed a neighbourhood in Germany’, ‘How the Dutch lead the way in senior housing innovation’,  and ‘Great advice from Denmark on supporting social housing tenants rights’.

Interested in design?  Then look at the site’s web page ‘5 awesome examples of affordable house architecture in Europe and the USA’.

The website of Housing Europe http://www.housingeurope.eu is another source of comparative material.