Systems of Housing Supply and Housing Production in Europe

Andrew Golland

• Publisher: Routledge
• Year: 2019
• Topic: Social Sciences
• eBook ISBN:
  9780429795282
• Subtopic: Sociology
• Index: Social Sciences

First published in 1998, this volume is a comparison of three European states: the United Kingdom, the Netherlands and Germany. The book investigates the effect of different policy stances on the volume and tenure of new housing production. Examining a number of contemporary theories, the methodology considers the role of markets, political systems and cultural factors in explaining why housing production outcomes differ.

Comparative housing studies can be criticized for a number of reasons. Sometimes the theoretical framework lacks raison d'être; other times the approach comprises a purely descriptive 'country-by-country' overview. This study differs in the emphasis given to methodological problems ad in the approach to comparing systems, which is on an issue-by-issue basis. The conclusions show that systems of supply in which governments intervene significantly, often regulate production more successfully than those in which production is mainly market driven. The findings will be of interest to practitioners, researchers and post-graduate students of European housing.

1 Introduction

1.1 Housing supply and housing production: aims of the study

This book is a response to contemporary questions about the relationship between different systems of housing supply and the production outcomes which ensue. It is a study of three European countries: the United Kingdom, the Netherlands and Germany, which will be compared and contrasted in terms of housing production policies, land policies and physical planning systems. The book attempts to show how differences in aspects of public policy and levels of private sector provision bring about changes in the volume and tenure of new housing production over time.

Since the early 1970s, there have been significant changes in the way European housing has been supplied. Invariably the focus of research is on the extent to which systems are converging, and hence bringing about similar results or outcomes. At other times, theory suggests that housing systems are so inhibited by institutional structures or restrained by cultural norms that convergence or harmonisation cannot easily be foreseen. These factors are problems not only for policy makers and practitioners, but also for theorists and those concerned with comparative methodology. The book recognises the difficulties involved in comparing countries and attempts to use a framework and a selection of three case studies which highlight the most relevant contemporary aspects of new housing production. The aims of the study are primarily twofold:

To improve understanding of the way in which European systems of housing supply function and hence to explain better production outcomes.

To identify different theoretical and methodological approaches to comparing housing systems and to consider their efficacy in the light of an empirical investigation.

1.2 Contemporary policy issues and historical research approaches: towards a hypothesis

A main purpose in writing this book is to identify a meaningful hypothesis associated with systems of housing supply and test it against housing production outcomes. To find a useful hypothetical standpoint means initially reviewing existing and previous approaches to comparing and analysing housing systems.

Studies of housing systems often begin with very general hypotheses which are applied across a broad number of countries. The research of Burns and Grebler (1977), for example, sought to explain, or link ‘outcomes’, which were primarily levels of investment in housing, with levels of economic development experienced by different countries, both ‘developed’ and ‘developing’. Their hypothesis suggested that levels of investment were linked closely with levels of economic development. This was largely proven, but where the spread of countries considered was so broad that political, institutional and historical factors could be easily underplayed in discussing general differences of outcome. Other advocates of the general or broad hypothesis include Donnison and Ungerson (1982) who developed the thesis that:

housing policies and the housing markets of industrial society are converging - irrespective of party-political, ideological or institutional circumstances (Schmidt, 1989, p.84).

This hypothesis could be explained in terms of the ‘logic of industrialism’ (ibid) and the robustness of the convergence theory was empirically tested on housing outcomes for a number of industrialised countries. An important finding is that housing outcomes are not wholly explained by a convergence in macroeconomic performance; levels of owner-occupation, for example, are not strongly correlated with levels of economic development. There is no ‘logic of industrialisation’ which pre-determines housing outcomes. Schmidt found that the ‘housing policies of industrialised nations have diverged, not converged’; that ‘housing policy and housing market processes must primarily be understood in terms of the organisation of the policy-making and implementing systems’; and that:

this does not mean....that economic and demographic factors lack significance. Rather they provide background factors which set the stage, so to speak, and beyond which institutional and ideological factors seem to play an increasingly important part (Schmidt, 1989, p.98).

Schmidt’s findings are important for this and other contemporary comparative studies in that his rejection of convergence has since caused researchers and policy analysts to demand a closer examination of the individual nature and structure of housing systems. The new direction has been prescribed in no small part by those giving greater emphasis to the political economy and cultural context of European housing systems. In many interesting cases (Barlow and Duncan, 1994; Ambrose and Barlow, 1987), the focus has been on housing supply and housing production. Work in this area provides many important reference points for the determinants of housing production (Ambrose and Barlow, 1987, p.Ill) and the frameworks for comparing housing systems (Barlow and Duncan, 1994, p.40).

Barlow and Duncan’s (ibid) main contribution to comparative methodology can be seen to lie in the emphasis they give to the construction of a robust and meaningful analytical framework. They use the idea of ‘regime type(s) in welfare capitalism’ to compare and contrast housing systems and outcomes. ‘Regime types’ are ‘liberal welfare states’, ‘corporatist welfare states’, ‘social democratic welfare states’ and ‘rudimentary welfare states’. This framework derives from the work of Epsing-Andersen (1990) who examined social policy and labour markets in several European countries. The methodology of Barlow and Duncan involves examining housing provision in the context of Epsing-Andersen’s work. This draws on the assumption that Britain, France and Sweden are respectively, good examples of ‘liberal’ ‘corporatist’ and ‘social-democratic’ countries. The framework then becomes relevant for exploring the significance of different levels of state regulation and intervention in housing systems.

In respect of method, Barlow and Duncan’s (1994) work is worthy of further comment; their emphasis on the selection of ‘extreme’ country cases is important for highlighting the particular consequences of different levels of government intervention: Britain, France and Sweden are the country examples. Their thesis is that there is a need to overcome the assumption that ‘markets’ are ‘good’ whilst ‘governments’ are ‘bad’ (Barlow and Duncan, 1994, p.xi); moreover, the conclusion should consider what matters is the ‘market-state mix’ (Barlow and Duncan, 1994).

This is an interesting conclusion, although one which still demands more attention to explaining how the differences come about. Alternatively, a more mechanistic approach can be adopted. Such is the methodology used in a recent and wide ranging research project of the German Housing Ministry (B.M.Bau, 1993). This is a study of the operation of land markets in housing and commercial property supply. It considers five countries, of which Britain, the Netherlands and Germany are three, (France and Italy being the other two). The study proceeds on the basis of a pro-forma analysis of specific issues; for example ‘procedure for planning permission’, ‘role of development plans, ‘compulsory acquisition’, ‘infrastructure provision’, etc. These aspects are linked in a strong conclusion, which states that:

Simple property-market systems function better than complicated ones...a simple system is demonstrated by the property market systems of the Netherlands and Britain...this is...all the more surprising...since these two countries represent very different property systems. The system in the Netherlands is dominated chiefly by the influence of the public sector, whereas the British system is shaped more significantly than anywhere by market forces (B.M.Bau, 1993, p.xxxii).

Such an analysis undoubtedly appeals for a much more rigorous examination of the apparent paradoxes evidenced in housing systems and their outcomes.

There is additional literature associated with the German Housing Ministry study (B.M.Bau, 1993), although the associated work is not so directly analytical. Related work on housing and land markets is contained in Williams and Wood (1994), (The United Kingdom), Needham et al, (1993) (The Netherlands) and Dieterich et al, (1993) (Germany). They begin from the viewpoint that there should be some common goals or expectations of land supply systems, which include a ‘sufficient supply of property’ (Needham et al, 1993, p.210), in ‘appropriate’ locations and at ‘appropriate’ prices. These seem reasonable expectations, although there are some comparative difficulties with the framework adopted. As Oxley (1995) has highlighted in a review of the works, there is an attempt to draw conclusions ‘having regard to issues of economic efficiency and social equity’ which are ‘notoriously difficult to appraise’. The methodological emphasis is in practice on ‘very detailed, tightly structured descriptions’ (ibid) and the texts are ‘much stronger on information than evaluation’.

The associated Housing Ministry report (B.M.Bau, 1993) has greater utility for comparative analysis. This is above all because its conclusions suggest the idea that there can be systems which are very different but which can still produce similar outcomes. This can occur because, although there may be very differing roles for the state in housing supply, systems nevertheless function in a similar way, and hence bring about similar results.

From this standpoint it has become possible to establish a hypothesis for the study in hand. This posits the idea that:

Systems of housing supply in which the state plays a very different role can produce similar housing production outcomes. This is, to a significant extent, due to the way in which the systems are structured.

The hypothesis, which is regularly re-visited as the book progresses, necessitates a choice of three countries in which the state does play a significantly ‘different role’. The case study framework for the three countries is derived from two underlying factors associated with integrity of method and feasibility of approach. First, that the United Kingdom, the Netherlands and Germany are seen by other researchers (Barlow and Duncan, 1994: B.M.Bau, 1993) as being examples of very different housing systems; in the United Kingdom, the role of the state may be considered minimalist, whilst in the Netherlands, the state at the central and local level has adopted a more interventionist stance. In Germany, the role of the state appears less clearly associated with either of these extreme positions. Second, the study must be capable of being carried out; in this respect, personal contacts and language possibilities meant that this three way comparison was a feasible option.

In formulating a methodology to investigate the hypothesis, it is important to consider the many possible interpretations of the concept of ‘structure’ within housing systems. There are many potential combinations of state-market ‘mixes’ (Barlow and Duncan, 1994) and the relationship between the way in which systems function and production outcomes occur, is sometimes poorly understood. This lack of understanding results from a number of causes although insufficient attention to theoretical and methodological complexities of comparative analysis is a common fault. Whilst the social sciences provide a number of frameworks, which range from Marxist paradigms to neo-classical economic models, these are often seen as vehicles through which all events can or even should, be explained. This study attempts to look much closer at the question of the way in which systems function and are structured. It does not fully accept the conclusion that what matters is the ‘state-market mix’ (Barlow and Duncan, 1994). That conclusion is only important in so far that in some way governments and market agencies matter in determining how much housing is built and of what tenure or type. The nature of the ‘mix’ should be further investigated; what policy makers need to know is the way in which this ‘state-market’ mix functions, and hence to be able to make policy adjustments in line with demographic change or changes in the macroeconomy. Whether they can do this, depends very much on how the structure of housing systems are understood and in turn, how they are modelled.

The focus on the state and market therefore needs to be more fully explored in the context of concepts of structures and systems. This book aims in no small part to elaborate the link between theory, research paradigm and substantive knowledge of systems. The approach questions, for example, the utility of functional perspectives which are evident in authoritative pieces of recent research (B.M.Bau, 1993; Healey, 1991; Healey and Barrett, 1990). In this way it is intended to provide stronger conclusions on the relationship between the nature of systems, the way they are structured and the outcomes which ensue.

1.3 European systems of housing supply and housing production: between state and market

Because in the previous section a case has been made for comparing the United Kingdom, the Netherlands and Germany, it is appropriate in this introductory section, to highlight some of the most important aspects of housing supply and production in these countries.

The scope for government intervention in housing supply

The role for governments in influencing housing production is determined by a number of factors. These can be historical, demographic, economic, social or ideological. Together these factors serve to influence the land, planning and housing policies and processes determining housing production outcomes. In looking at the ‘scope for intervention’, it is important to consider the impact these factors may have.

Historical events, and most importantly in the 20th Century, the 1939-1945 War had a marked impact on the overall need for housing. In Germany, damage to the housing stock was enormous (Power, 1993). Leutner and Jensen (1988) have calculated that in 1950 there were 5.5 to 6 million too few dwellings in Germany. Housing shortages were also significant in the Netherlands in the immediate postwar period (Boelhouwer and Van der Heijden, 1992, p.57).

Housing shortages have always tended to provide a raison d’ être for government intervention. High levels of house building in all three countries throughout the 1950s, 1960s and 1970s have been the response. Demographic factors have also had an important part to play. Particularly significant is the fact that in the Netherlands, there has been a very high rate of household formation. Between 1970 and 1987, the number of households increased by 50% (Boelhouwer and Van der Heijden, 1992, p.24). This may be contrasted with the United Kingdom and Germany where the rate of increase over the same period was only 23% in both countries (Boelhouwer and Van der Heijden, 1992, p.24). Shortages resulting from historical factors, combined with high rates of household formation mean that rates of house building per head are very high in the Netherlands. Figure 1.1 highlights the main historical differences in the volume of house building output.

Source: United Nations Economic Commission for Europe; Annual Bulletin of Housing and Construction Statist...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Figures and tables
• Preface and acknowledgments
• 1 Introduction
• 2 Theory and method in comparative analysis
• 3 Systems of housing supply: between policy and process
• 4 Structure and agencies in housing supply
• 5 Housing production and housing systems: a statistical analysis
• 6 Conclusions
• Bibliography and references