Rising housing prices, stagnating wages, demographic pressures and declining public investment in housing in many countries are increasingly challenging housing affordability in many OECD and non-OECD European Union (EU) countries (OECD, 2020[1]). Between 2005 and 2019, real house prices increased in 31 OECD countries, and rent prices rose in all but two OECD countries (OECD, 2020[1]). Moreover, since the Global Financial Crisis, house prices have risen faster than incomes in 21 of 33 OECD countries for which data are available. These trends have made it harder for households to afford housing. Indeed, while there have been some improvements in recent years, more than a third of low-income renters spend over 40% of their disposable income on housing, on average in the OECD, and are thus considered overburdened by housing costs (OECD). 2020).

The COVID-19 pandemic, along with the shelter-in-place orders implemented to manage the crisis, put a spotlight on these enduring housing affordability and quality gaps, particularly among low-income and vulnerable households (OECD, 2020; OECD, 2020. People living in poor quality housing or unsafe living conditions (such as overcrowding or homelessness) faced elevated health and safety risks, while workers experiencing sudden economic losses struggled to cover their monthly rent, mortgage or utility payments without assistance (OECD, 2020). The pandemic highlighted the urgency to address persistent housing vulnerabilities and homelessness, prompting many governments to introduce a range of emergency housing support measures.

As governments chart the path towards economic recovery, there is renewed momentum for increased investment in social housing in many countries, as in the EU, for example, supported by the European Green Deal. Indeed, social housing remains an important part of the affordable housing solution in many countries and a means to provide decent, affordable housing to those who are unable to access housing through the private market. The “Renovation Wave” announced by the European Commission in early 2020 as part of its European Green Deal has also reinforced a call to action for policy makers and housing providers to improve the quality of the building stock, particularly for social housing. Nevertheless, policy makers will need to ensure that renovations to improve housing quality and energy efficiency do not lead to the displacement of low-income residents.

Source: OECD (2020), “Social housing: A key part of past and future housing policy”