EUKN interview with Dr Darinka Czischke

10 September 2015

In the EUKN interview, Dr Darinka Czischke from Delft University of Technology noted: “Both the social and affordable housing sectors are undergoing comprehensive transition and reform in many countries.” The topic of affordable housing is moving upwards on policy makers’ agendas.


EUKN: Rapid population growth leads to increased need for affordable housing in most cities. How is affordable housing defined and what are the major policy instruments in Europe?

DC: The definition of affordable housing varies locally and nationally. In broad terms, we could say that affordable housing is housing open to a wider range of household incomes, including middle-income groups, compared to statutory social housing. Generally speaking, while access to affordable housing is regulated through eligibility criteria, it is managed more like private rental property. Affordable rents are derived from, but lower than, full market rents. In some countries, affordable housing refers to policies to assist middle- to low-income households to purchase housing at below-market price. In France, for example, this instrument is aimed at assisting low-income households to buy their first home.


EUKN: What are the recent trends in Europe with regard to affordable housing?

DC: Both the social and affordable housing sectors are undergoing comprehensive transition and reform in many countries including, for example, the UK, the Netherlands, Belgium, Germany, Portugal, and Poland. This is likely to continue in many Member States due to, on the one hand, macro-economic constraints (notably those stemming from the global economic and financial crisis), and on the other, regional events such as the recent reform of the social housing regulatory framework in the Netherlands. In view of the general trend across Europe towards the reduction of public sector funding for social housing, funding models require re-thinking. In countries such as England and the Netherlands, for example, affordable housing is becoming an instrument to help middle-income groups rent housing at below-market price, while social housing is becoming a residual tenure for the very low incomes.  In some countries, the concentration of low incomes in social housing is accelerated by mechanisms coercing more affluent households into homeownership or the private rental sector.


EUKN: In recent years, especially after the economic crisis, the state no longer allocates the same amount of resources. How is the private sector included in affordable home building? Have alternative responses emerged in terms of local initiatives and innovations and if so, what?

DC: As a result of the wide-ranging transformations in social housing funding described earlier, in countries like England and the Netherlands we see that a new market segment for the provision of ‘affordable housing’ is opening up to housing providers, both not-for-profit and for-profit. In the Netherlands, for example, the new 2015 Housing Act restricts the activities of social housing corporations in the moderately-priced private rental sector, with the aim to create a more level-playing-field and attract private sector investments. The issue is whether for-profit housing providers are willing to enter this market or not. So far, there is inconclusive evidence that this is the case. Recent private sector investments in this segment have been largely driven by a lack of attractive investment opportunities in the owner-occupied housing sector. Now that the housing market is recovering, there are indications of for-profit sector retrenchment from the rental sector.

Another example is England, where the ‘affordable rental housing’ product launched in 2011 by the coalition government allows housing associations to charge up to 80% market rents. However, despite being labeled ‘affordable’, sharp variations between regional housing markets don’t mean that this is necessarily the case everywhere. In a city like London, for instance, 80% market price is not affordable for the majority of the capital’s inhabitants.

In addition, I would like to highlight a growing trend in many European countries to tackle housing affordability, namely the re-emergence of ‘resident-led housing’ initiatives. Through my ongoing research on collaborative housing models in Europe I have come across a wide variety of alternative models for the provision of mixed-income and mixed-tenure housing. These housing projects are led by groups of residents for whom affordability and the inclusion of households with a wide range of incomes feature amongst their core drivers. While not in large numbers (yet), I believe that the values and strategies of these initiatives represent examples of innovation, notably in the field of non-speculative funding models for affordable housing. There is huge potential for regular providers and policy-makers to learn from these examples.


EUKN: Affordable housing challenges in inner cities range from the homeless who are forced to live on the street, to the relative deprivation of workers who are unable to find accommodation near their place of work. Who are the most important target groups of affordable housing policies?

DC: As I mentioned earlier, affordable housing tends to target middle- to low-middle incomes; in other words, households who earn too much to be eligible for statutory social housing but too little to access home-ownership at market price. In that sense, I don’t think we can consider the homeless or very low-income households amongst the target groups of this type of housing. As you point out, so-called ‘key workers’ (e.g. teachers, nurses, emergency workers such as police or firefighters, etc.) in tight housing market areas are often considered as primary target groups in affordable housing policies. Also first time buyers feature in this category, like in the case of France.


EUKN: How is the academic field involved in the topic of affordable housing? What are the main inputs research can provide to policy makers? Could you give examples with projects you are working on?

DC: There is a growing body of research in this field, in line the increasing policy attention on this topic. I’m currently leading a study on funding models for social and affordable housing for the European Investment Bank (EIB) at the TU Delft, alongside my colleague Gerard van Bortel. As part of this study, we are conducting a systematic mapping of definitions of affordable housing in all 28 EU member states and will look at affordable housing policies and funding models through five in-depth country case studies. We expect to publish our findings report next spring.