Affordable and adequate housing - a common goal in the face of diverse contexts

From Madrid through Amsterdam to Berlin, finding and affording a decent home is perceived as increasingly difficult in European cities. Despite a broad consensus on the importance of affordable and high-quality housing, policymakers often struggle to deliver good housing conditions to a broad population.

Unfortunately, researchers also tend to give conflicting advice on what to do. There is no universal solution to the affordability crisis, as housing markets and their regulatory contexts vary considerably, even within Europe. To give examples, Poland and Spain heavily rely on homeownership and as a result are often closely interwoven with financial markets (see Figure 1) to ensure housing provision. Meanwhile, Austria and Germany are known for their large rental shares and amounts of subsidised housing.

In the pursuit of adequate and affordable housing, policymakers are navigating a complex terrain shaped by economic models, welfare systems and diverse housing regimes. A traditional assumption, influenced by experiences in western Europe and North America, suggests that, as economies develop, the middle class strengthens, diminishing the need for social housing. However, the emergence of the "precariat" in the 1980s challenged this notion, highlighting the need for a nuanced understanding of housing markets and the context in which they are embedded.

Poland and Spain heavily rely on homeownership and as a result are often closely interwoven with financial markets to ensure housing provision. Meanwhile, Austria and Germany are known for their large rental shares and amounts of subsidised housing.

Blankenberge, Belgium

Meanwhile, post-socialist countries, undergoing transitions to market-based economies, witnessed a contrasting housing policy paradigm. A liberal approach advocated comprehensive reforms to free the housing market from state control, epitomised by the World Bank's "enabling markets to work" model. In contrast, the "housing for all" approach gained momentum after the 2008 crisis, attributing the housing crisis to market failures and advocating for tighter regulations. The debate between the two housing policy paradigms is intrinsically tied to the stability of the middle class. A stable middle class, fortified by strong trade unions or political support, aligns well with market-oriented solutions. Conversely, a precarious middle class demands meticulous market regulations and substantial government subsidies to ensure housing stability and affordability. Therefore, housing policymakers are faced with different challenges in different welfare systems.

Familistic and liberal approaches leaned heavily towards homeownership, with familial networks playing pivotal roles in housing provision in the former and market mechanisms dominating in the latter.

Welfare systems -historically conceived to redress social imbalances in domains such as education, employment and health - initially neglected the crucial facet of housing. While these systems traditionally sought to ameliorate disparities across key life realms, housing policies were often treated as peripheral concerns. A paradigm shift occurred with the rise of alternative theories, notably exemplified by Kemeny's influential dual and unitary rental market model (Kemeny, 1995). Kemeny's conceptualisation brought tenure form to the forefront as a pivotal variable in understanding housing dynamics within diverse welfare contexts. The dualist rental systems, characterised by the coexistence of a targeted social rented housing segment and an unregulated private sector, is contrasted with the unitary systems, where both social and private rental housing are encouraged to compete for tenants.

To return to the example countries presented above, Austria would be a housing system showing many characteristics of the unitary rental market model; Poland would be an example displaying many characteristics of the dualist system. As a result this differentiation tends to allow for the identification of the manifold influences on housing prices and access to different tenures.

The theoretical landscape evolved further with nuanced typologies that aimed to categorise housing tenure systems based on their alignment with distinct welfare regimes. The lens of social democracy, corporatism, familism, liberalism and transitional models offered a comprehensive framework to comprehend the diversity of housing structures within the broader welfare context. Each model carried its unique imprint, shaping the tenure distributions and influencing housing provision across different social classes. The paradigms ranged from social democratic systems, where the state assumed responsibility for equitable redistribution across all tenures, to corporatist models that favoured a dominant private rental sector.

Familistic and liberal approaches leaned heavily towards homeownership, with familial networks playing pivotal roles in housing provision in the former and market mechanisms dominating in the latter. The transitional model, characteristic of post-socialist transitions, witnessed a rapid shift from state-owned rented housing to a surge in homeownership, reflecting the broader economic shifts in eastern European countries, such as Poland. However, clearly distinguishing the model in each country is not always straightforward. Austria is, for example, a country that falls under the corporatism model, yet also has characteristics from the other four welfare regimes.

Herein lies the crux of developing housing policies. The evolution of housing theories within welfare systems underlines the intricate relationship between social policies and housing dynamics. The recognition of tenure form as a defining variable and the nuanced typologies framing housing within broader welfare contexts have significantly enriched our understanding of the complex interplay between societal structures, economic models and housing outcomes.

This evolution paves the way for more targeted and effective housing policies that acknowledge the multifaceted nature of housing challenges within the broader landscape of social welfare. As a result, a comprehensive approach, considering the nuances of diverse housing solutions, is essential for crafting effective and inclusive housing policies across Europe.

Over the next 24 months, the ESPON House4All (access to affordable and quality housing for all people) project aims to provide an overview of European housing systems and markets, and strategies to tackle the affordability challenge.