Recap: Social housing is rental housing provided at sub-market rates and allocated according to specific rules of eligibility for prospective tenants. Most social housing developments target vulnerable communities, such as refugees, the elderly, disabled persons, and low-income households (OECD, 2020). Social housing used to be called “public housing” in the US, but that term became associated with all sorts of bad things so it’s gotten a name change. No matter what you call it, new social housing is back on the policy to-do list in many countries, especially those with a dearth of affordable housing. Social housing has been around for long time in most of these countries, so the challenges are well-known. These challenges include:
Tenants whose financial status improves may not want to leave social housing, especially if there is a shortage of affordable alternatives in the private rental and owner-occupied sectors.
On the other hand, removing long-time but now better-off tenants from their dwellings can dampen the sense of community and limits the potential for socially mixed communities.
Some social mixing is desirable to avoid the spatial concentration of poverty in social housing developments, but that means fewer units would be available to those most in need.
Limits on tenant income or tenancy duration reduces the security of housing tenure and may weigh heavy on tenants.
Income-dependent rent increases create a disincentive to take up employment and reduce labour mobility overall, especially when rent increases are tied to hard thresholds.
Duration of social housing tenure is associated with unemployment and the length of unemployment, meaning the longer one lives in social housing, the more likely one will be unemployed.
Some social housing developments become segregated ethnic enclaves that resist integration with the wider community. This is more common in European countries.
Social housing estates often become rundown over time, especially when rents don’t cover ongoing operational costs, leading to deferred maintenance and cost-cutting measures.
Dense social housing estates reserved mostly for low-income tenants are associated with increasing neighborhood poverty, as the community’s income base cannot support local businesses, leading to an exodus of jobs and the middle-class.
Many high-rise social housing projects are associated with high levels of social disorder and crime.
Here are a few tips on how to fix the problems associated with social housing:
Create incentives and remove disincentives for affordable housing alternatives in the private rental and owner-occupied sectors. People will resist moving out of social housing without having a decent place to move to.
Insure a social mix of tenants in large social housing estates: from very low-income to middle-class, from native-born citizens to first-generation multi-ethnic immigrants, from university students to the elderly. This increases social trust among disparate groups and improves housing finances.
Overcome the potential employment disincentives created by hard income limits for tenancy. Instead, allow tenants to remain in social housing as they climb the socioeconomic ladder, setting rents proportional to the household’s income at all levels while ensuring rent increases are always much less than any increase in income. As tenants’ rents increase, they will eventually approach market-rate levels, creating an incentive for the better-off tenants to transition out of social housing.
Go small to moderate in size. Smaller social housing estates that are more evenly distributed throughout and across urban areas are less likely to lead to increasing poverty in their neighborhoods.
Provide temporary housing assistance (e.g., vouchers) for tenants who move out of social housing to take up employment elsewhere.
Use a cost-based approach to rents to cover the actual costs of developing, operating and maintaining the stock, and which can send signals to the market as to the real cost of social housing developments. It is understood that higher-paying tenants will subsidize lower-paying tenants to some degree.
In areas that already have plenty of affordable housing, referral to social housing should only be considered for households unable to find suitable housing on their own, even with housing assistance.
Institute a strict system of house rules and make sure that all residents and their guests are regularly reminded of the rules and the consequences for breaking the rules, from warnings to eviction. Make no exceptions.
Use whatever financial and policy tools are available to reduce the cost of constructing new social housing estates. One reason Vienna is able to keep building lots of social housing is that their cost of construction is roughly half the cost paid in Seattle.
Increase street lighting in large social housing estates, especially high-rises, as brighter streets (and outdoor public areas) have been found to reduce crime by nearly 40%.
References and Links
“Can Vienna’s model of social housing provide the inspiration to tackle Europe’s housing crisis?” By Vianey Lorin 22 January 2020 https://www.equaltimes.org/can-vienna-s-model-of-social#.YDMTNkSIa70
W. H. Carter, M. H. Schill, and S. M. Wachter, “Polarisation, public housing and racial minorities in US cities,” Urban Studies, vol. 35, no. 10, pp. 1889–1911, 1998. https://doi.org/10.1080/0042098984204
Crime Lab New York Can Street Lighting Reduce Crime? https://urbanlabs.uchicago.edu/projects/crime-lights-study
“Denmark’s Ghettos and the Dangers of Public Housing” By Samuel Hammond July 12, 2018 https://www.niskanencenter.org/denmark-ghettos-public-housing/
“Housing in Vienna” Annual Report 2016 https://ec.europa.eu/futurium/en/system/files/ged/housing_in_vienna_annual_report_2016.pdf
“Housing Policy Lessons from Vienna, Part 1” By Mike Eliason Apr 15, 2018 https://15kwhm2a.medium.com/housing-policy-lessons-from-vienna-part-1-516bc45e9090
McDonald, J. F. (2011). "Public Housing Construction and the Cities: 1937–1967." Urban Studies Research 2011: 985264. https://doi.org/10.1155/2011/985264 high-rise estates and especially in the U.S.
OECD (2020), “Social housing: A key part of past and future housing policy”, Employment, Labour and Social Affairs Policy Briefs, OECD, Paris, http://oe.cd/social-housing-2020.
Vienna’s Unique Social Housing Program (undated) https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_011314.html
Why Did Pruitt-Igoe Fail? https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_110314.html