Understanding Housing Development in New European Member States – a Housing Regime Approach

Introduction:

Comparative studies have shown that housing systems can only be analyzed in the context of the larger economic, political, and welfare systems. It can be a challenge to differentiate the effects of these systems, as inequalities and risks result from the economic system and are in turn modified by the country’s welfare regime. Welfare interventions in income distribution, even those which are not housing-specific, have a large effect on the housing system, particularly with regards to affordability. The specific institutional mechanism by which housing is embedded in the welfare system must therefore always be taken into account. The idea that it is only possible to understand a housing system in the context of the economic and welfare system is not a new requirement in the literature.

Three basic approaches to housing systems:

We differentiate three basic approaches used in the literature to conceptualize housing systems: the housing provision approach, which focuses on the social and economic aspects of the housing sector; the tenure structure approach, which emphasizes the legal framework and ownership structures of housing; and the institutionalist approach, which focuses on path dependency in the development of housing systems:

1. The first approach emphasized that the structural analysis of housing models is an analytical framework rather than a complete theory of housing and focused on the role of housing provision within a capitalist economy (particularly factors such as the land market, construction, housing finance, etc.).
2. The most frequently cited researcher of the second approach is Kemeny, who connected the ruling political ideologies and power structures to the social/political/legal arrangements of tenure. As a result, tenure structure is often considered the most important determinant of housing systems.
3. Lundqvist is an example of the institutionalist approach, which describes the historical development of housing systems (path dependence) in the context of the interactions between various stakeholders. There are, of course, many variants of this approach depending on the factors emphasized by different scholars.

Housing policy –an institutional analysis of changes in the housing sector matrix:

The dynamics of the housing system– how it changes over time – can be analyzed using the housing sector matrix. The behavior of the system’s actors and the relationships between them is determined by the given regulatory environment and system of subsidies and taxes, as well as by the factors described in the housing sector matrix. Housing policy intervenes in this system by changing the legal and regulatory framework and the subsidy and tax regime, but it necessarily builds on existing structures, as the behavior of the various actors is embedded in the socio-economic system of previous periods. Housing regimes change gradually, which highlights the significance of path dependency and the institutional analysis of the housing system.

Housing regime changes in post-socialist housing systems:

This new approach to housing regimes makes it possible to re-interpret the East-European Housing Model. The main characteristics of the EEHM were single-party political control over the housing sector, the subordinate role of market mechanisms, a lack of market competition among housing agencies (bureaucratic coordination), and broad control over the allocation of housing services (huge, non-transparent subsidies). We can use the housing sector matrix to illustrate the basic structure of the model. One of the clear advantages of this approach is that the relatively low share of the public rental sector before 1990 is consistent with the dominance of state control, especially in urban areas. Market processes in the public sector were a well-known ‘crack’ in the system. Moreover, self-help or self-build was a typical form of housing provision in rural areas, which was dominated by reciprocal transfers among members of the family and their local network.

Conclusion:

The countries in the region have many similarities in the context of the global economy. After the change of regime, they all emerged as multi-party democracies; they had a relatively well educated and inexpensive workforce. Nearly all have faced negative demographic development. Social and spatial inequalities have been growing, as have social tensions. Despite vast improvements since the early 1990s, the role of the informal economy remains more important than in the old EU member states, which limits the possibilities of the national welfare systems because tax revenues are thus reduced and it is difficult to provide targeted support.

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