How are urban social and affordable housing practices affected by EU policies? Two case studies.
Introduction:
Even though the European economy has shown signs of recovery after the 2008 global financial crisis (GFC) and the recovery in housing prices is seen by many as positive, in general salaries have not increased as fast and housing needs have only increased since then, affecting no and low-income population and vulnerable groups, as well as middle-income population, although to a lesser extent. In addition, costs related to housing are increasingly becoming the most significant item of household expenditure, with an increased number of people who spend more than 30% of their income on housing and related costs.
However, this has not translated into an increased investment in social and affordable housing and on the contrary, although the diversity of groups affected by the crisis has grown, States have been narrowing down the beneficiaries targeted by their programs.
Research question:
This thesis will focus on how urban social and affordable housing strategies are affected by EU policies. And more particularly, what effect European Union State aid regulation had on provision of social housing based on the case studies of the Netherlands and Sweden. In addition, it will attempt to demonstrate how EU policy has supported a market-oriented approach to housing policy in the EU, in contrast to an approach based on access to housing for those in need.
Methodology and structure of the study:
This study is mostly descriptive, but with the aim to provide explanations to the issues at stake. The qualitative part of the description relied heavily on European Union documents such as decisions, regulations, communications and letters with decisions on State aid cases by the European Commission, resolutions by the European Parliament, opinions by the Committee of the Regions, the Action Plan and other material produced by the Housing Partnership and decisions of the Court of Justice of the European Union, as well as existing literature.
In addition, there is a more limited quantitative part, which relies as applicable on statistics from Eurostat, the Dutch Central Agency for Statistics and Sweden Statistics, amongst other.
Social and affordable housing approaches in Europe:
Before going into the details of the Swedish and Dutch models it is important to understand the international and European regulation regarding the right to housing, as well as the complexities around the definition of social and affordable housing. This will help one understand, amongst others, the challenges of having the European Commission unilaterally defining social housing.
Housing Partnership:
The unprecedented housing needs and the increasing number of European households that face difficulties in accessing adequate, social and affordable housing, which deteriorated considerably in the aftermath of the 2008 GFC, set the ground for the work of the Housing Partnership. The objective set for housing in the Pact of Amsterdam was therefore to have affordable housing of good quality, focusing on “affordable public housing, state aid rules and general housing policy” .
Housing Act and later policy:
The new Housing Law came into force in July 2015, after years of discussion in the parliament. This law included the new allocation rules and remaining commitments that had been made to the European Commission (e.g. separation between social and commercial activities, the latter being allowed only under a strict market test and under market conditions), as well as stricter rules for governance and supervision of the rental sector.
Conclusion:
Overall, one could say that the State aid cases against the Netherlands and Sweden resulted in real changes in policy, but in a way served rather as a lever for policies that centre-right governments had not managed to implement on their own in their periods in power, despite following a liberalization course since the 1980s/1990s. Subsidized loans had already been discontinued in both countries. The Commission did not impose on neither country the exact course that they chose to follow.
However, State aid regulation according to SGEI Decision 2005, which introduced the limitation of social housing as housing for “disadvantaged citizens and socially less advantaged groups”, made it difficult for these countries to keep their universal systems intact
Also Read: Urban Poor Living in Slums: A Case Study of Raipur City in India