False claims against IUT in International Journal of Housing Policy

In an article in International Journal of Housing Policy published on line April 24 2014 professor Quintin Bradley states:

“The policy of tenure neutrality championed by the International Union of Tenants as essential to a right to adequate housing advances a model of general needs or, in other words, universal social rented housing provision unrestricted by income limits or needs-based rationing.”

What means tenure neutrality?

First it is important to understand what tenure neutrality means. It is not about social housing.  It has to do with the way governments support the different tenure forms.

The problems appear when the state subsidizes without any conditions according to the rent or the price. In some countries, as for instance USA, Ireland, Spain and some more, this policy have created price bubbles among owner-occupied dwellings and caused the present financial economic crises. The subsidies to home-owners in some countries are very high and cost the states many many billions. Because these subsidies (mostly in form of tax deductions that benefits wealthy households the most) don´t have any conditions attached to them, they also leads to higher prices in expansive regions. And the effect is even stronger when the rental sector cannot compete with the owner-occupied sector on the same financial conditions. It is more profitable for the constructors to build for homeowners then for renting because they could get higher prices from the households due to the subsidies.

That’s why it is necessary to have tenure neutrality: the situation in which the consumer is financially indifferent between owning and renting a dwelling. Tenure neutrality means that ways of finance and the tax system do not distort consumer choices between renting and owning.

The households must have the possibility to choose what kind of tenure suits them best in their present circumstances. Many people cannot afford owned housing and may not get any mortgage from the bank. And many don´t want to be stuck to a dwelling for a long time depending on the situation on the labour market. Students need temporary dwellings during their studies. The rental sector is vital for the economy because it makes it easy to move. That is why the state should not support owned more than rental housing.

Social housing without income limits?

Second IUT don’t advocate social housing for all unrestricted by income limits. Par definition social housing is always connected by income limits. But that can be done in different ways. And it should be up to every state to define the conditions for social housing without interference from the EU Commission. But we advocate decent and affordable housing for all as a fundamental human need, and a basic human right. Access to affordable housing is one of the fundamental pillars in well-functioning democratic societies.

The market alone cannot solve the housing problems for many e.g.

  • Young households
  • Certain ethnic groups
  • Low income households
  • Disabled households in need of care.

We need social housing and/or housing allowances to needed households and other forms of subsidies and adapted housing to fight market failures. Subsidies to provide affordable housing are necessary but should not be able to be capitalized. The aim of the subsidy should be to lower the costs not to stimulate higher prices. Subsidies on a free market, e.g. mortgage interest deduction, stimulate speculation, contribute to increased prices on homes and construction, push up rents and decrease housing affordability especially in regions with high levels of migration.

A social mixture is desirable and wise. The housing policy should not create ghettos with only the most needy. The social climate in a housing area affects the future possibilities of households and individuals living there. That’s the reason why countries have expanded the entrance to social housing over a very low minimum incomes and let households which have got somewhat higher incomes stay in the area. There are different approaches in different countries to create this social mixture, which the EU Commission should accept.

According to the competition rules it is right to let private landlords manage social housing. For me it would be interesting to let the EU Commission examine whether large subsidies to homeowners and none to the rental sector, as for instance in Sweden, are in compliance with the competition rules.

The false claims of Bradley

Mr. Bradley basically states that:

–  Universal housing systems/policies (as IUT advocates according to him) have actually led to rising rents and conditionality in the social housing sector

–  Universal housing is not actually “universal”, as allocation criteria eventually produce the exclusion of those “most in need” or their relegation to bad quality dwellings

Also, he says that the campaign for “affordable housing for all” is actually in the interest of a specific social class/ income group (the relatively well-off). 

Therefore, he suggests IUT to solve the dilemma between the need for universal housing and the conflict between different income groups. An extract from his conclusions follows:

 “This is a difficult task of confronting the conflicts between social groups and assembling a plurality that does not exclude the least vocal and most vulnerable. Confronting the tensions in the universal would appear to be the first stage in advancing a blueprint for a right to housing that can be truly available to all”.

It is rather questionable how he comes to his conclusions. He takes into account only one country (UK) and one case study (interview with 2 groups of tenants).  And he doesn’t mention the huge subsidies in many countries that goes to the most wealthy.

Also, it is quite odd to say that the campaign for universal access to affordable housing has resulted in higher rents. It would be better just to say that universal housing systems have been undermined by neo-liberal policies.

To my mind, it is not correct to state that “policies intended to make social housing more widely available in England, France and Sweden have raised rents and threatened affordability” (see page 2 of his article). Historically, the UK has a “residual” (or liberal) welfare state system, the “bedroom tax” showing evidence of the “path-dependency” of British housing policies. In France, the Loi Boutin (2009) has actually reduced the income ceiling for access to social housing (and wealthier tenants have to pay a surplus to finance the system). Sweden has only a minimum part of social housing in form of shelters. Public housing has the same conditions as the private rental sector. To help people with small incomes there are housing allowances and also social assistance.  He writes that Sweden has withdrawn State aids to public housing companies a few years ago. The fact is that Sweden has withdrawn State aid (investments grants to small rented dwellings regardless of owner) but kept and increased the subsidies to home-ownership.  Well, to which policies is he referring to? 

If we look at the evolution of welfare state systems in Europe, we can observe (from the 80s) a general trend of liberalisation in Europe, i.e. the State withdrawing from or reducing public support.

I think that the main reason for rising rents and unaffordability do not lay on the political discourse of tenants representatives, as Professor Bradly want us to believe, but on other factors instead. 

Sven Bergenstråhle

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