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. Care of the OECD policy brief, Social housing: A key part of past and future housing policy, here’s a list of some of those challenges:

  • Due to high construction and land costs in some prosperous urban areas, rents for more recent social housing are often closer to private-market rates than the rents in older developments. This translates into long waiting lists for some of the older social housing estates.

  • Social housing is less flexible than housing allowances (e.g., vouchers) and the social housing stock cannot be quickly adjusted to react to changes in housing affordability or demographics. Housing allowances, on the other hand, can be more rapidly targeted, expanded or removed.

  • Low rents can induce “lock-in” effects, which incentivizes tenants to stay in their social housing units even though better job opportunities exist elsewhere. On a broader scale, lock-in effects may explain the positive association between social housing tenure and length of unemployment. On the other hand, housing allowances can be more effective in reducing barriers to geographic and social mobility and have been found to increase the likelihood that households will move out of overcrowded housing.

  • Lower-income tenants typically pay less rent and have a greater risk of insolvency. Social housing developments can’t afford too many lower-income tenants and so many put aside some units for tenants who can pay more. As operational costs increase over time, social housing administrators may charge higher rents for more units, effectively shifting their tenant mix upward on the socioeconomic scale. As a result, fewer units are available for the most needy.

  • Segregation, defined as the geographic allocation along the socioeconomic, ethnic or racial characteristics of households, has increased in cities and regions across Europe and North America, especially in areas with social housing. Middle-class residents sometimes move out of neighborhoods near large social housing estates, creating a zone of concentrated poverty and limited access to essential goods and services. While some level of segregation may be beneficial (for instance, in terms of social networks and a sense of community), it becomes problematic when it leads to reduced educational and socioeconomic opportunity.

  • Social housing typically runs on a tight budget. Administrators may defer maintenance to control costs and keep rents low. As a result, social housing properties often become rundown and plagued by problems such as being damp and moldy. For instance, 25% of state-owned and managed indigenous housing units in Australia failed to meet minimum standards in 2016.

  • Dense social housing developments are associated with higher levels of crime and social disorder in some areas, especially high-rise complexes in the US.

Next: How to make social housing work.

References:

McDonald, J. F. (2011). "Public Housing Construction and the Cities: 1937–1967." Urban Studies Research 2011: 985264. https://doi.org/10.1155/2011/985264

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.