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Scarcity of affordable rental housing for young people

Created on 19-10-2023

Community participation Policy and financing
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The housing demand in European cities is growing exponentially and new profiles, such as young people, are facing increasing difficulties in accessing housing. The potential demand for rentals continues to exceed the available supply that is highly unaffordable in central urban areas. Public housing is residual since it mainly answers the needs of the most vulnerable segments of the population and its long waiting lists are incompatible with young peoples’ mobility and changing needs. Therefore we argue that  a renewed social housing  concept could allow to redevelop existing real estate assets for an innovative housing solution, such as cohousing, that could profit both young people and the existing neighbourhoods. New partnerships are needed at the local level to promote a supply of social housing that meets the specific needs of young people, along with engaging in an evaluation of the integration of the housing project in the surrounding neighbourhood.

System knowledge

Actors

National government

This actor represents the central governing body and authority responsible for overseeing and managing the affairs of a nation, including policymaking, legislation, and implementation within a certain geographic area.

Local government

This denotes the administrative authority responsible for governing and managing local affairs within a specific geographic area, such as a city, town, or district, through local policies, regulations, and services.

Local communities

Local authorities

Local authorities, also known as local governments or municipal governments, are administrative bodies responsible for governing and providing services to specific geographic areas, such as cities, towns, or counties. They manage local public affairs, infrastructure, and policies, and are accountable to the residents within their jurisdiction.

Method

Participatory action research

Participatory Action Research (PAR) is a research approach in which researchers collaborate with participants to collectively investigate and address real-world issues, emphasizing active involvement, social change, and empowerment.

Ethnography

Ethnography is a qualitative research method that involves the in-depth study and description of a specific social group or culture, typically through participant observation, interviews, and fieldwork, to gain a deep understanding of their practices, beliefs, and behaviors.

Tools

Workshops

Workshops are structured and interactive sessions or gatherings in which participants engage in hands-on learning, problem-solving, and skill development related to a specific topic or activity. Workshops are typically conducted in a group setting and often involve practical exercises, discussions, and collaborative activities to achieve specific learning objectives.

Interview

Target knowledge

Topic

Community engagement

Social sustainability

Social housing

It refers to housing units that are owned, operated, or subsidized by the government or non-profit organizations with the primary goal of providing affordable and secure accommodation to individuals and families with limited financial means. Social housing programs aim to address housing affordability and housing insecurity issues, especially for low-income or vulnerable populations.

Dimension

Social

This dimension relates to aspects influencing or impacting people, communities, and societal structures.

Governance

This involves networks, systems and processes that steer decision-making, service delivery and policy implementation.

Level

Building

The structure, project or development that is directly impacted by the various building regulations.

Country

The political structure governs a specific geographical area and accommodates a specific population group.

Municipal

This level refers to the local administrative or governmental unit, typically a city or town, responsible for local governance, services, and decision-making within a defined geographic area.

Neighborhood

Transformational knowledge

Policy

Alternative form of housing provision

Related case studies

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Related vocabulary

Affordability

Housing Policy

Area: Policy and financing

Housing is usually deemed unaffordable when it consumes more than a set percentage of a household's monthly income. The Eurostat[1] and the OECD[2]  follow this threshold approach and define households overburdened with housing costs as those spending more than 40% of their disposable income on housing. However, this indicator fails to capture financial hardship, particularly among lower-income households. In fact, lower-income households may be spending less than 40% of their income on housing and yet failing to meet adequate consumption levels for other goods. As a response, the residual income approach ascertains housing (un)affordability by defining a minimum level of consumption for a set of goods according to particular household types. The residual income approach builds on consumption data to define the minimum level of income necessary for a household to survive after housing costs. The main shortcoming of this approach is that relies on subjective measures of what constitutes the necessary minimal expenses for a household. These two definitions of affordability navigate two tensions 1) between housing and other types of consumption and 2) between the individual conceptions and what is affordable and what government considers to be affordable (Haffner & Hulse, 2021). More recently, scholars have emphasized the multi-faceted nature of affordability to include commuting and transport costs together with energy costs (Haffner & Boumeester, 2015). Other approaches focus on supply-side measures, for instance on the share of the housing stock that a household can afford (Chung et al., 2018). Evolutions in the measurement of affordability bear witness to the complexity of housing systems. Affordability is not only dependant on housing consumption but also housing supply, particularly in inelastic markets where providers have considerable power. At the same time, displacement pressures and rising energy costs in an older and inefficient stock add pressure on households to access affordable housing. References Chung C., Evangelou N., Geyer J., Quint R., Keith I., Coates D., Daula T., Frumkin S., Leventis A. v, Doerner W. M., Roderer D., & Barba M. (2018). A New Home Affordability Estimate: What Share of Housing Stock Can Families Afford?. FHFA Staff Working Papers 18-04, Federal Housing Finance Agency. Haffner M., & Boumeester, H. (2015). Housing affordability in the Netherlands: the impact of rent and energy costs. Journal of Housing and the Built Environment, 30(2), 293–312. https://doi.org/10.1007/s10901-014-9409-2 Haffner M., & Hulse K. (2021). A fresh look at contemporary perspectives on urban housing affordability. International Journal of Urban Sciences, 25(S1), 59–79. https://doi.org/10.1080/12265934.2019.1687320   [1] https://ec.europa.eu/eurostat/web/products-datasets/-/tessi165   [2] https://www.oecd-ilibrary.org/sites/624ee022-en/index.html?itemId=/content/component/624ee022-en#section-d1e6271  

Created on 15-07-2021

Author: A.Fernandez (ESR12), M.Haffner (Supervisor)

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Area: Design, planning and building

Definition: Housing policy This definition aims to present a wide and general overview of different types of public policies that have an impact on housing demand and supply through varying economic and financial channels. Housing markets are influenced through fiscal, macroeconomic, prudential, and structural policies (Hilbers et al., 2008). Fiscal policies have a stronger impact on income and costs through taxation and subsidies. One of the main fiscal policies with regard to housing is the mortgage interest deduction which reduces user costs and can produce increases in prices (Poterba, 1984).   Macroeconomic policy regulates the money supply through interest rates. Housing has usually been perceived as a conveyor belt for macroeconomic policy as the expansion of the money supply through low-interest rates or quantitative easing has the potential to increase demand during recessions counteracting the procyclical behaviour of financial markets (Muellbauer, 1992).   Prudential policies determine the adequate level of risk attached to lending through Loan-to-Value (LTV) and Debt-to-Income (DTI) ratios. The Great Financial Crisis is usually seen as a failure of prudential policy that has resulted in the tightening of loan requirements  (Whitehead & Williams, 2017) and drawn renewed attention to housing policy from central banks, policymakers, and economists (Piazzesi et al., 2016).   Finally, structural policies regulate housing supply, this includes planning regulations and environmental standards. For example, research from the US has shown that zoning laws can have a relevant impact on housing affordability by constraining supply (Glaeser & Gyourko, 2002).   These policies usually work in conjunction with each other: lax prudential policies and favourable homeownership taxation together with low-interest rates and tight planning controls can lead to higher prices. Conversely, constrained lending, brick-and-mortar subsidies, and higher interests rates are known to mitigate rising house prices. References Glaeser, E. L., & Gyourko, J. (2002). Working Paper 8835: The Impact of Zoning on Housing Affordability. NBER. http://www.nber.org/papers/w8835. Hilbers, P., Hoffmaister, A. W., Banerji, A., & Shi, H. (2008). IMF Working Paper. House Price Developments in Europe: A Comparison. IMF. Muellbauer, J. (1992). The European Housing Market The role of institutions and macroeconomic policy. European Economic Review, 36. Piazzesi, M., Schneider, M., Arefeva, A., Hoffmann, E., Kermani, A., Lenel, M., Myers, S., Peter, A., Taylor, J., & Uhlig, H. (2016). Housing and Macroeconomics. NBER. Poterba, J. M. (1984). Tax Subsidies to Owner-Occupied Housing: An Asset-Market Approach. Source: The Quarterly Journal of Economics, 99(4), 729–752. https://about.jstor.org/terms Whitehead, C., & Williams, P. (2017). Changes in the regulation and control of mortgage markets and access to owner-occupation among younger households. OECD. https://doi.org/10.1787/e16ab00e-en

Created on 17-03-2022

Author: A.Fernandez (ESR12), M.Haffner (Supervisor)

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