Housing policy in the EU member states

• Author: Zuzanna Kowalik - Piotr Lewandowski - Egidijus Barcevicius - Dovydas Caturianas - Jakub Sokolowski
• Pages: 28-42

IPOL | Policy Department for Economic, Scientific and Quality of Life Policies

PE 65 2.72 9 28

2. HOUSING POLICY IN THE EU MEMBER STATES

2.1. Re cent t rends and mai n models of national a nd local housing policy

A wide var iety of hou sing mark et models exists in Europe. In so me countries, over 90% of the housing

stock belongs to owner-occupiers, whereas in others it is predomina ntly rented. Due to t his variety in

housing m arkets, EU Member States have implemented correspondingly different models and levels

of pu blic po licies to a ddress the shortage of affordable and social housing.

Broadly speaking, two housing system models can be identified in Europe, based on the way in which

countries organise the supply of housing82:

• The dualist rental system relies most ly on private markets/market-oriented policies regarding

the rental and hous ing mark ets. This model is characterised by a free market , and a pro fit-

driven housing/rental market and state-controlled housing/rental sector that are not in

competition with each other. Providers of social housing do not compete with for-pr ofit

housing providers, and simply act as a safety net for low-income households. This type of

system encourages home ownership because non-privat e housing alternatives are very

limited . This mode l is pre valent in Eng lish-speaking countries and in most of the CEE countries

that underwent rapid privatisation of the housing stock in the 1990s; and

• The unitary rental mark et or 'soci al mark et' model (advocated in Germanic and Nordic

countries) is characterised by a larger non-pr ofit /limit ed profit h ous ing

organisation/association sector, which focuses more on r ental tenancy. In this model,

social/non-profit housin g pr oviders compete with private hou sing pro vider s. No n-p ro fit

housing pr oviders are integ rated into the mark et through public subsidies (which may be

phased out as landlords become financially mature)83.

Affordable/s ocial housing schemes can be broadly divided into two types:

• Housi ng supply-si de measures, i.e. s chemes aiming at the development of social/affordable

housing; and

• Housi ng demand-si de measures, i.e. social welfare type payments – hous ing allowa nces

(interventions by public authorities to help households meet the cost of housing).

As shown in the Figure 12 below, the level of public funding for both of thes e types of public

intervention differs significantly from country to country in Europe, depending on the policy priorities

and the historical context of the country. CEE cou ntries, fo r instan ce, saw t he rapid privatisation of a

large sha re of their housing stock, which left the majority of these countries with an impoverished social

housing s ector and t herefore little opportunity to house the m ost vulnerable groups84.

82 Omic, E. (2017), Housing inequality in Eu rope: Tack ling ine qualities in Europe : the role of social inve stment, CEB, available at:

https://coebank.org/media/docu ments/Pa rt_3-In equ ality -Hou sin g.p df .

83 Ibid.

84 Mandič, S., Filipovič Hrast, M. (2015) , Alte rnative s to So cial Housing: A pplicants' View s of Various Policy Options, Urbani Izziv 26, no. 1 (2015):

pp. 69-81, available at: www.jstor.org/stable/24920965.