Urban Social and Affordable Housing
Introduction:
The European Union does not have a Social and Affordable Housing policy; however, it has managed to exert influence over the national housing policies of its Member States, apparently showing bias for market-oriented approaches and residual social housing systems. This research attempts to bring an update as to the current state of discussions concerning housing in the European Union. It will also look into how urban social and affordable housing financing strategies have been affected by EU policies, and particularly, what effect European Union State aid regulation had on the provision of social and affordable housing based on the case studies of the Netherlands and Sweden.
Both countries had universalist social housing models that have been challenged before the European Commission leading to policy changes in the respective countries as of 2011. This research analyzes the consequences of these cases for the Netherlands and Sweden from a policy and housing provision perspective, as well as changes of behavior of public housing providers. It shows the different forces at play, the variety of opinions according to the EU body, and other compatible options of State aid that can to a certain extent be an alternative to SGEI.
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.
Normative background: the right to housing:
The right to adequate housing is recognized in international human rights law as part of the right to an adequate standard of living. It was first mentioned in the Universal Declaration of Human Rights, being later addressed in several other international instruments, such as the International Covenant on Economic.
Social and Cultural Rights (ICESCR):
According to ICESCR, which has also been ratified by all EU Member States, States parties “recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions”.
Social and affordable housing in Europe:
In 2017, a 10.4 % share of the EU-28 population lived in households that spent 40% or more of their disposable income on housing, but considering only low income households, this number increases to 37.9%.
Housing Act and later policy:
The new Housing Law (Woningwet) came into force in July 2015, after years of discussion in the parliament213. 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 (and later SGEI Decision 2011), 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.