1. SOCIAL HOUSING IN THE EU CECODHAS HOUSING EUROPE
Housing policies across Europe, current challenges and opportunities
CECODHAS HOUSING EUROPE

2. What is CECODHAS - Housing Europe?
CECODHAS - Housing Europe is the federation of cooperative, public, social housing
… a network of national and regional housing federations of housing organisations.
Together the 43 members in 18 European members States manage 25 million dwellings which represent 12% of the total housing stock in the EU.

3. Social rental housing in the EU27
Largest in NL, followed by AT and DK.
UK, FR, SW and FI also have a large social/public housing sector
On the contrary, no rental social housing in EL, very small share in CEE as well as PT, ES
The size of the social rental housing sector varies significantly across countries. The Netherlands is the country with the highest share of social housing in Europe, accounting for 32% of the total housing stock, followed by Austria (23%) and Denmark (19%). The UK, Sweden, France and Finland also have a relatively large social and public housing sector. On the opposite end of this spectrum, we have countries in Southern Europe such as Greece and Spain with a clear prevalence of owner-occupation and a very small or almost non-existing social rental sector. Also most Central and Eastern European countries have extremely low shares of social rental housing, with the exception of the Czech Republic and Poland.

4. Different social housing models
A ‘typology’ of social housing models can be identified by combining two different aspects: allocation criteria (i.e. who are the beneficiaries of social housing policies) and size of the sector. In terms of approaches to allocation of social housing one can distinguish between universalist and targeted systems, the latter including generalist and residual models.
Universalist systems are virtually open to everyone. Its first goal is to weigh on the market by applying cost rents and offering quality housing with secure tenure to households, irrespective of their social profile.
Opposite to the universalist model, residual social housing caters for a relatively small population - those excluded from the housing market. Beneficiaries are typically defined on the basis of social criteria defining their vulnerability and urgency of needs.
In the generalist category, a wider group is eligible for social housing, defined on the basis of specific income levels. Social housing providers have more leeway in the selection of their tenants. The social stock is generally bigger in the generalist system than in the residual one, and it is intended to produce a downward pressure on market rents.

5. Trends in tenures: 20 years of targeting the most vulnerables
Social housing in selected EU countries ( )
Home-ownership in European OECD countries ( )
Overall, the size of the social housing sector has been shrinking since the 1980s in the majority of countries where the information is available, with few exceptions such as Austria, France and Denmark which have sustained their level of social housing production.
The main causes behind this phenomenon are twofold: there has been a general retreat of the state from housing policies (including financing) leading to a decrease in social housing outputs and increasing targeting social housing for the most vulnerable. In some countries (UK, DE) this process went hand in hand with privatisation of the existing social housing stock on a large scale.
At the same time there has been almost everywhere a significant increase in the rate of home ownership, fuelled by public schemes encouraging homebuyers, and by lending policies (low interest rates) which in some cases have been proved irresponsible and unsustainable by the ‘bursting’ of the housing bubble (Spain, Ireland)

6. Providers of social housing
Different providers usually co-existing
Public (municipalities, publicly owned companies)
often retreating from new construction due to budget constraints
often focusing on the poorest/most vulnerable
Private (mainly not for profit/limited profit organisations, but increasingly also commercial developers)
In most cases ‘registered’ or ‘approved’ providers acting on not for profit basis
In some countries also ways to mobilise (temporarily) dwellings owned by private individuals or commercial developers for social goals
Cooperatives sometimes market actors, sometimes social role (special case Eastern Europe)
Today in most ‘old member states’ of the European Union we find a combination of actors involved, with public provision (usually by municipalities, either directly or through dedicated publicly owned companies) often coexisting with a growing private sector, mainly consisting of specialised non-profit or limited-profit bodies (such as for instance UK’ ‘housing associations ‘and Dutch ‘housing corporations’). In recent years local authorities are in many cases (e.g. UK, Austria) retreating from the production of new social housing and concentrating on the management of the existing stock.
In some cases the public sector has specialized in the provision of what can be defined as ‘very social’ housing. This is the case for instance in Italy where different types of options for housing at controlled price exist but the public sector offers the lowest rents and targets the poorest people, similarly to Spain where ‘socially protected housing’ is provided for sale by a number of actors including the private sector, while a small proportion of social rental housing is provided by the public sector.
A particular case is that of most Central and Eastern European countries where, with the exception of Poland and the Czech Republic, with massive housing privatisation after 1990, municipalities were left with a very small public housing stocks which largely still constitutes the only form of social housing today. Some countries in the region (e.g. Poland, Slovenia) have recently set up legal arrangements allowing for the creation of a non-profit housing sector.
Interestingly, recent years have seen the increasing involvement with social housing provision by non-specialised actors (commercial developers and private landlords, as opposed to specialised ‘approved’ providers) who have been included as possible recipients of public subsidies in exchange for the use of dwellings for social purposes (low rents, tenants from social housing waiting lists), usually for a limited period of time. The typical example of this type of policy is Germany, where this change went hand in hand with the decentralization of housing policies to the local level and the privatization of public housing on a large scale.

7. Financing social housing: the economic model simplified
Market price
DEMAND SIDE
Affordable price
SUPPLY SIDE
Rent
Total cost
Rent/share paid by tenants
Equity/ own capital
It depends on history of affordable housing supplier
Households expenditure
Loan/bond
Better conditions if:
Public guarantee
risk sharing mechanisms
Good financial track records ….
Housing benefits
Land /
Share…
Land at preferential price (or not)
Community land trust,….
Or shared ownership…
Social/protection policies counted as social expenditure
In nearly all EU countries, financing social housing means combining different sources: standard bank loans (mortgages), public grants/loans, own funds of housing organisations and sometimes also tenants’ contributions.
In most countries, historically there has been financial assistance to support the cost of investing in social housing, coming from the national or regional/local level. Upfront, non-repayable grants are less and less used, especially nowadays in the context of the global financial and economic crisis. Making sure loans are available at low interest rates - through loans extended directly by public authorities, through direct subsidisation of the interest rate or through the provision of public guarantees on loans - is the most common way for public authorities to support social housing provision. A further very important factor in supporting the provision of social housing is the availability of land at discounted prices, as well as an enabling fiscal environment for social housing providers.
With decreasing public investment, access to private funding – either through borrowing from banks or directly from the capital markets - is gaining importance in for the sector. Particularly important in this regard is the issue of how social housing is perceived by potential lenders and investors in terms of risk. This is why for instance providers in England and the Netherlands are getting rated from international rating agencies. Furthermore, in different countries are implementing innovative ways of pooling risks for instance by establishing ‘solidarity funds’ at sector level such as in the Netherlands.
Subsidies
Public grants generally decreasing
tax advantages
Public support/expenditures
Public support as guarantee, preferential price…

8. Examples from EU countries
Netherlands: HAs financially independent since Borrowing from capital market, backed by 3 level security structure: Central Fund of Social Housing, Guarantee Fund for social housing, state guarantee as last resort.
France: subsidies from state and local authorities but limited. 2.5% employers grants or loans. Main source Livret A (household saving book)
Austria: public subsidies through grants and subsidised loans; commercial loans raised via special bonds by housing banks.
Ireland: Has traditionally had access to public loans financing up to 100% of project. Since 2010 this is finished, now borrowing from banks with public guarantee
Each different financial model is impacted differently by the crisis; but everywhere it means that private finance should be mobilize (not necessarly via global financial market, can also be local savings)

9. Lessons from the crisis?
Spain: households evicted
France: 1.7 million pending social housing demands
Housing market highly dysfunctional, private debt as important economic imbalance as public debt for economic stability
Financial market instability causes and consequences of housing price bubbles: what regulation that would be supporting social housing providers
Housing expenditures of EU citizens increasing: 8% of Europeans and a third of Europeans at risk of poverty spend more than 40% of their budget on housing expenditure, and 17% Europeans face utility or rent/mortgage arrears
For the moment only consensus on strict public finance’s consolidation without growth policies → threat to the survival of social housing sector when it’s most needed!
England: from 1 million to 1.8 million households on waiting lists
European figures point to increasing shortages of housing supply and affordability problems. Currently 8% of Europeans and a third of Europeans at risk of poverty spend more than 40% of their budget on housing expenditure, and 17% Europeans faced either utility or rent/mortgage arrears or both in 2011.
The need for social rental housing is on the rise, as testified by increasing waiting lists. In France for instance there are 1.7 million pending social housing demands, and yearly construction is 27.5% below the level required to meet housing needs. In Spain, households are being evicted, and it is estimated that 4 million people stopped warming their homes because they could no longer afford it.
In England social housing waiting lists increased constantly from about in 1997, to over 1.8 million households in 2011, while the number of those in need of local authority housing in Ireland has increased by 75% since 2008, from applicants to
Despite increasing demand for affordable rental housing, the social housing sector was not immune to recent cuts in public expenditure. Indeed, after an initial phase when in many countries there was significant investment in social housing both as a ‘social shock absorber’ and a way to foster the construction sector, today the budget dedicated to housing policies is significantly reduced in almost all EU countries.
Ireland: applicants for social housing almost doubled in 3 years

10. EU opportunities: Cohesion policy
Structural Funds; period : 9 billions € potentially eligible for housing energy upgrade, and 4 billions for urban renewal and housing for marginalised community. Beginning of 2012, less then 2 billions had been invested.
Next period: housing fully eligible for ERDF funding!
Energy efficiency: Former objective 2 regions will have to dedicate at least 20% to support shift towards a low-carbon economy, including energy efficiency and use of renewable energy in the housing sector
Social infrastructures: “(a) investing in health and social infrastructure which contribute to national, regional and local development, reducing inequalities in terms of health status, and transition from institutional to community-based services; (b) physical and economic regeneration of deprived urban and rural communities”;
Urban development: 5% of ERDF resources allocated to integrated actions for sustainable urban development delegated to and directly managed by cities.
The current programming period ( ) saw a gradual increase in opportunities for the sector, especially with regards to the use of funding from the European Regional development Fund to invest in energy refurbishment and renewables in the housing sector, as well as (since 2010) to improve the housing conditions of marginalised communities.
Under the current legislative proposals for the new Cohesion Policy , housing is fully eligible - compared to the previous programming period, where housing was eligible only under certain strict circumstances. There are at least 3 areas where investment in housing could be co-financed by the European Regional Development Fund.
With regards to energy efficiency, former objective 2 regions (the most developed EU regions in the EU) will have to dedicate at least 20% of their operational programmes to investment in supporting the shift towards a low-carbon economy in all sectors. In particular, investment should be made to support energy efficiency and use of renewable energy in the housing sector. There is therefore no ceiling any more for investment in energy refurbishment in housing, which means that a region is free to invest as much ERDF as they want on energy refurbishment in housing. One have to note that reference is made of housing sector in general, which means that every kind of housing is eligible to support and not only social housing.
Furthermore, the European commission foresees an expenditure code for housing infrastructures under the area of social infrastructures, distinct from the investment in energy refurbishment of housing. It means that they expect the possibility of regions willing to renovate their housing stock under at least 2 circumstances, namely “investing in health and social infrastructure which contribute to national, regional and local development, reducing inequalities in terms of health status, and transition from institutional to community-based services”, and “physical and economic regeneration of deprived urban and rural communities”.
Last but not least, the regulation stresses that at least 5% of the ERDF resources allocated at national level shall be allocated to integrated actions for sustainable urban development delegated to and directly managed by cities. It means that cities will manage at least 5% of the ERDF national pot directly to support urban development/renewal. Furthermore cities will be allowed to support pilot projects and studies to test innovative solutions linked to sustainable urban development.

11. EU opportunities: EIB & CEB
The European Investment Bank provides loans to Member States to help them build and renovate social housing:
The environmental aspect is particularly emphasized
minimum of 100 million €
also together with the European Commision grants to help set up big renovation programmes (ELENA scheme).
The Council of Europe Development Bank, (not an EU institution and with a smaller investment portfolio) is a strong partner of the social housing sector in Eastern Europe and for social projects in the EU-15.
Beyond the EU programmes and policies, at least two other institutions have a long experience in supporting affordable housing in the EU : the European Investment Bank and the Council of Europe Development Bank.
The European Investment Bank has a long tradition in providing loans to Member States to help them build and renovate social housing. The environmental aspect is particularly emphasized in the loan agreement. Usually the EIB lends important volume (minimum of 100 million €) and therefore seeks partners that can aggregate the needs of housing organisations. The EIB provides also together with the European Commision grants to help set up big renovation programmes (ELENA scheme).
The Council of Europe Development Bank, although not an EU institution and with a smaller investment portfolio than the EIB, is a strong partner of the social housing sector in particular in Eastern Europe and for social projects in the EU-15.

12. …. Thank you for your attention!