Single households and housing costs Free choice or market constraints M. Leussink J. Smeets

Single households and housing costs Content Introduction Housing costs Overconsumption or constraints on housing market Solutions Discussion

Single households and housing costs pag2 Introduction (1) Housing costs of households are diverse. Especially the housing costs of single households are often high. In the future the housing costs will increase and the ‘housing costs to income ratio’ will increase even further.

Single households and housing costs Introduction (2) 1)Taxes for housing associations are rising, forcing them to increase rents. -extra points in Housing Appreciation System (WWS) for districts with shortages -an extra rent increase (inflation+1,5%) for households with an income less than €33.614/year -an extra rent increase (inflation+2,0%) for households with an income € /year -an extra rent increase (inflation+4,0%) for incomes >€43.000/year 2) Other housing related costs, like energy costs, are increasing  Affordability is at issue!

Single households and housing costs Introduction (3) Forecasted development of single households in region Eindhoven shows that this group increases rapidly. Forecasted development of households [Province Noord-Brabant, The Netherlands]

Single households and housing costs Introduction (4) This presentation is mainly based on two surveys and literature study: A survey among tenants and owners about their housing costs in the region of Eindhoven providing insight in the affordability of housing. [Leussink & Smeets, 2012] A three-yearly housing survey among inhabitants of South East Brabant. [SRE, 2011]

Single households and housing costs Introduction (5) Major objective: affordable housing (rental or owner-occupied) for single person households Providing insight into affordability Suggestions to control or reduce housing costs in the short and long term Respondents: Social rental sector (rent < €652,52/month) :N=910 Owner-occupied sector (purchase price < € ) :N=580

Single households and housing costs pag2 Housing costs (1) The housing costs of households are not only determined by rent or mortgage but also by dwelling-related costs.

Single households and housing costs Housing costs (2) Single person households in: - Social rental sector: 48% (N=442) - Owner occupied sector: 31% (N=183) social rental sector owner occupied sector HouseholdsN%N% single <30 years354%356% single years13014%8314% single years18620%5810% single >74 years9110%71% couple <30 years324%427% couple years354%539% couple years15617%10017% couple >74 years687%132% family10311%16228% single-parent family748%275% total910100%580100% [Leussink & Smeets, 2012]

Single households and housing costs Housing costs (3a) Specified housing costs by type of households in social rental sector 39% 30% 35%

Single households and housing costs Housing costs (3b) Specified housing costs by type of households in owner occupied sector 34% 26% 29%

Single households and housing costs Housing costs (4a) Specified housing costs of single households in social rental sector 32% 40% 38%

Single households and housing costs Housing costs (4b) Specified housing costs of single households in owner occupied sector 37%36% 31% 20%

Single households and housing costs Housing costs (5a) Housing costs to income ratio in social rental sector and owner occupied sector compared

Single households and housing costs Housing costs (5b) Housing costs to income ratio in social rental sector and owner occupied sector compared

Single households and housing costs Are housing costs of singles high…. …as a consequence of the overconsumption of dwelling services or …as a consequence of the constraints on the housing market ?

Single households and housing costs Overconsumption of dwelling services? Assumption I: A lot of single person households are living in single family dwellings. Social rental sector Owner occupied sector

Single households and housing costs Overconsumption of dwelling services? Assumption I: A lot of single person households are living in single family dwellings. TRUE Assumption II: Housing costs of single person households in single family dwellings are higher than the housing costs of single person households in multi family dwellings.

Single households and housing costs Overconsumption of dwelling services? Housing costs of single person households in social rental sector are similar for different dwelling types. Housing costs of single person households in owner occupied sector are less for single family dwellings and similar for multi family dwellings with and without an elevator. The costs in the owner occupied sector are – for all types of dwellings - higher than in the social rental sector.

Single households and housing costs Overconsumption of dwelling services? Housing costs to income ratio varies in social rental sector from 36% to 40%. Housing costs to income ratio varies in owner occupied sector from 30% to 39%. Housing costs to income ratio is relatively high, both in social rental as in owner occupied sector. Single person households in an owner occupied single family dwelling have the lowest ratio (probably they got a mortgage because of their relatively high income).

Single households and housing costs Overconsumption of dwelling services? Assumption I: A lot of single person households are living in single family dwellings. TRUE Assumption II: Housing costs of single person households in single family dwellings are higher than the housing costs of single person households in multi family dwellings. NOT TRUE  Single person households are overconsuming TRUE and NOT TRUE

Single households and housing costs Constraints on the housing market? Income < € / year  only possibilities in social rental sector  upcoming possibilities in social owner occupied sector Income € € / year  no possibilities in social rental sector  limited possibilities in private rental sector * income too low * affordable supply (€ ) too small  limited possibilities in owner occupied sector * mortgage regulations are strict Income > € / year  no possibilities in social rental sector  possibilities in private rental sector  possibilities in owner occupied sector * mortgage regulations are strict

Single households and housing costs Possible solutions Long term: Affordable new dwellings Smaller new dwellings Transformation of housing stock Short term: Better allocation of dwellings Social owner-occupied dwellings Housesharing Cohousing

Single households and housing costs Possible solution 1: Affordable new dwellings  Rent < €561,98 / Purchase price <€  Optimal energy performance (Energylabel A) BAM Woningbouw

Single households and housing costs Pag.33 Possible solution 2: Smaller new dwellings  Reduction of space per person (mini lofts, studio apartments) _eng.html ?id= ame=prijsvraag17&id=2782

Single households and housing costs Possible solution 3: Transformation of housing stock 2 dwellings3 dwellings

Single households and housing costs Possible solution 4: Better allocation of dwellings  Better fit between price of the dwelling and income of the household Income related rent Allocation based on income

Single households and housing costs Possible solution 5: Social owner occupied dwellings  Buying a dwelling under conditions. For example: getting a discount on the market value of a dwelling with an obligation/possibility to sell back to original seller.

Single households and housing costs Possible solution 6: House sharing  A model of household in which a group of usually unrelated people reside together; housemates, flatmates Share housing often occurs in the age group – during a life stage between leaving home and having children

Single households and housing costs Pag.33 Possible solution 7: Co-housing  Private dwellings with common facilities like a kitchen, dining room, laundry, child care facilities, offices, internet access, guest rooms and recreational features Research among starters: These households are only willing to share a laundry. (as long as it isn’t necessary)

Single households and housing costs Discussion - Are there other possible solutions?

Single households and housing costs Thank you for your attention!