Housing Policies in Welfare States

On April 7th Peter Boelhouwer gave a public lecture at the HSE on ‘Housing systems in Western Europe: Theory and Practice’. The lecture took place as a supplementary event to the 11th International Conference on the Problems of Economic and Social Development.

Peter Boelhouwer is Scientific Director at the OTB Research Institute for the Built Environment, Delft University of Technology, Netherlands. The discussion was moderated by Alexander Puzanov, Head of Department of Urban Economy and Municipal Governance, HSE Faculty of Public Administration.

Peter Boelhouwer started his lecture with a review of housing policy theory. He listed the reasons for government intervention in housing: the right to decent housing is one of the basic human rights (according to country laws as well as the Universal Declaration of Human Rights) and the government is responsible for providing its citizens with affordable and acceptable housing. To describe the housing policies of different countries Prof. Boelhouwer used the concept of the ‘welfare state' developed by a Danish researcher Gosta Espring-Andersen. According to this theory, modern developed states - ‘welfare states' - may be divided into three major types: liberal, conservative and social-democratic. Peter Boelhouwer developed a scheme characterizing the housing policies of the three types of states. He also suggested a new classification of welfare states based on their housing policies. The key characteristics of state housing policies included in this scheme are ‘decommodification' (decreasing of dependence on market powers), stratification (differences in the quality of housing of different population strata), balance of state, family and market influences, government regulation and subsidization as well as pricing policies and price regulation. Peter Boelhouwer's new scheme involves four types of states: liberal, ‘modern corporatist', ‘conservative-corporatist' and ‘labour-red corporatist'. The level of decommodification in the housing sector is highest in labour-red states and lowest in the liberal ones. The influence of central government is stronger in labour-red countries, while in conservative-corporatist states, family values have a major influence and in liberal - market and in modern corporatist states the market works in conjunction with the government.

Following these theoretical investigations, Peter Boelhouwer proceeded to talk about European housing in practice. He unveiled the results of research in housing conducted by his Institute and involving 6 regions of Europe: England, Flanders (The Dutch-speaking part of Belgium), France, Germany, Ireland and Netherlands. The research compares these countries' policies in housing construction, social and private rent, tax concessions etc. It is interesting that housing policies seem to be closely connected with a country's cultural traditions: for example, in Germany about 40% of the the population live in their own house or apartment, while in Belgium this number is about 70%. This phenomenon can be explained through a Dutch proverb about the Belgians which says that they are ‘born with a brick in their stomach': it is traditionally important for them to build their own house, and a person cannot be considered successful if he doesn't have his own house or apartment.

Then Prof. Boelhouwer shared with the audience the results of one more piece of research conducted by his colleagues. In this research, official documents pertaining to housing policies were analyzed from The Netherlands, Belgium, Germany, France, Great Britain, Sweden, Denmark, Austria, Spain, Slovakia and Slovenia. Each country sets goals and tasks according to its key demands and problems; for example, The Netherlands, Belgium and Germany are trying promote home ownership while Spain, on the contrary, supports increases in rented accommodation.

During his speech Peter Boelhouwer raised a question which was of great interest for the audience - the problem of the crisis, its consequences and measures for overcoming it. Housing sectors in Spain and Ireland were hardest hit by the crisis, while Austria and Germany have suffered less. According to the Dutch researcher, it is due to the specifics of the markets in those countries: in the first two, the markets were more dynamic, which caused unlimited speculation and the real-estate market bubble eventually burst. In the latter two government regulation is stronger, markets are more static, and Peter Boelhouwer sees this as the reason for their ‘crisis-proofness'. At the same time it does not mean that a dynamic market is bad and a static one is good. A dynamic market gives more opportunities, and in normal circumstances probably better meets the demands of its citizens. But in extreme circumstances a conservative model turns out to be more sustainable.

After the lecture Peter Boelhouwer answered some questions from the audience. Some of the questions were about a comparison of the Russian housing sector with the European: the participants were interested in certain similarities and differences.

One more relevant question was about mortgages and its ‘crisis-proofness'. Prof. Boelhouwer gave some examples of how mortgage deals may be secured with a system of guarantees and insurances which exist, for example, in France and Netherlands. In the end he made a bold statement:  if such a system had existed in the US mortgage system, the crisis probably wouldn't have happened at all.

Presentation for Peter Boelhouwer's lecture on ‘Housing systems in Western Europe: Theory and Practice’

 

Maria Pustovoyt

Photos by Nikita Benzoruk