Housing Policy In The United States

An Introduction

Paul Balchin, Maureen Rhoden, Alex F. Schwartz

• Publisher: Routledge
• Year: 2020
• Print ISBN: 9780415252133
• eBook ISBN: 9781000143621
• Topic: History
• Subtopic: North American History
• Index: History

Housing Policy in the United States is an essential guidebook to, and textbook for, housing policy, it is written for students, practitioners, government officials, real estate developers, and policy analysts. It discusses the most important issues in the field, introduces key concepts and institutions, and examines the most important programs. Written as an introductory text, it explains all concepts, trends, and programs without jargon, and includes empirical data concerning program evaluations, government documents, and studies carried out by the author and other scholars.

The first chapters present the context surrounding US housing policy, including basic trends and problems, the housing finance system, and the role of the federal tax system in subsidizing homeowner and rental housing. The middle chapters focus on individual subsidy programs. The closing chapters discuss issues and programs that do not necessarily involve subsidies, including homeownership, mixed-income housing, and governmental efforts to improve access to housing by reducing discriminatory barriers in the housing and mortgage markets. The concluding chapter also offers reflections on future directions of US. housing policy.

1 Introduction

At the General Election of 7 June 2001 the Labour Party secured a second consecutive term in office by winning 413 seats and gaining a majority of 167 over all other parties. However, in housing - as in other areas of policy such as education and health — Labour had gone to the electorate still grappling with a situation not entirely of its own making, but one that it had largely inherited in 1997 from the former Conservative administration. Under the Thatcher and Major governments, Conservative housing policy - between 1979 and 1997 - had dramatically reduced the amount of public expenditure on housing; brought about a marked reduction in capital investment and housebuilding in the public sector; replaced local authorities by housing associations as the major providers of new social housing and - through privatisation and the transfer of housing stock - substantially decreased the supply of local authority dwellings; raised rents ahead of average earnings in both the social and the private rented sectors; imposed an increased burden on mortgagors; left owner-occupiers with a considerably increased risk of repossession and presided over a marked increase in homelessness (Table 1.1). How Labour, under Tony Blair's leadership, subsequently addressed these and other housing issues between 1997 and 2001 undoubtedly had some impact on its electoral performance in 2001, even though greater attention was given at the hustings to other areas of policy.

To achieve an understanding of current housing policy, it is necessary to analyse and comprehend policy historically. This book therefore refers back (where appropriate) to the 1950s and 1960s or earlier, but most of the emphasis is placed on the 1970s to mid-1990s, when the debate on the respective roles of the housing sectors was particularly heated and on the years since 1997, when, in contrast, a new consensus on housing

Table 1.1 Key housing indicators, United Kingdom, 1980 and 1996

	1980	1996	Percentage change
Public expenditure: housing^a (£bn at 1998/99 prices)	13.1	4.9	-62.6
Local authority capital investment: new build and acquisitions^a^,^b (£m at 1997/98 prices)	2,275	67	-97.1
Housing starts: public sector	44,433	1,656	-96.3
housing association	14,911	30,304	+ 103.2
Local authority housing: % total housing stock	30.4	18.0	-40.8
Average rents^b (£ per week): local authority	7.70	40.00	+419.5
housing association	12.52	48.26	+285.5
private	10.85	50.61	+366.5
Mortgage payments (£ per week)	19.50	54.87	+181.4
Average male earnings (£ per week)	111.4	302.8	+171.8
Mortgage repossessions	3,480	42,560	+1,323
Local authority homeless acceptances^c	76,342	148,339	+94.3

Source: Wilcox (2000)

Notes:

^a 1980/81-1996/97

^b England

^c Great Britain

emerged. To provide an appropriate background to this analysis, the following introductory review:

• examines housing need, and how it has changed since the early 1980s;
• explores the relationship between welfare regimes and housing policy;
• reviews the development of housing policy since 1945;
• discusses how the housing policies of Labour and the Conservatives have converged - rather than diverged - in recent years; and
• takes note of devolutionary processes in the formulation of housing policy in Scotland, Wales and Northern Ireland.

Housing need

In very crude terms, housing need in Great Britain is largely satisfied. Housing policy since the 1950s has ensured that there has been a substantial growth in owner-occupation and council housing and a decline in private rented accommodation, while the condition of most of the housing stock has greatly improved. By the early 1970s a crude surplus of dwellings over households was achieved (for the first time

Table 1.2 Number of dwellings and households, Great Britain, 1981-98 (millions)

	1981	1991	1998	Percentage change, 1981-98
Dwellings	21.08	23.14	24.38	+15.7
Households	20.17	22.39	23.90	+18.5
Surplus	0.91	0.75	0.48	-47.3

Sources: ONS (2000a); Wilcox (2000)

since 1938) and by 1981 reached 910,000, only to decrease subsequently to 480,000 in 1998 (Table 1.2).

The crude surplus in 1998 (albeit lower than in the 1980s) did not, however, indicate the true relationship between supply and need. Of the 24.4 million dwellings in 1998, there were well over a million unfit dwellings or homes lacking basic amenities, dwellings undergoing extensive conversion or improvement, and second homes, while there were about half a million concealed households (such as couples sharing with their parents or in-laws) among the 23.9 million recorded households. There were also great spatial variations in supply and demand, most notably a surplus of cheap housing in much of the North and Midlands, and a shortage of affordable housing in London and elsewhere in the South. Although many dwellings need to be temporarily empty to facilitate household mobility, migration means that dwellings of the right kind or price are not always where they are needed. An ageing population also produces a mismatch between housing occupied and the size and type of dwellings required.

Across the United Kingdom, however, the tenure mix (see Table 1.3) varies from country to country. Table 1.4 shows that - as an outcome of different market conditions and public policy - Northern Ireland and Wales have the highest level of home-ownership in the Union, Scotland has the greatest proportion of dwellings rented from local authorities and housing associations, and England has a disproportionate share of private rented dwellings.

Housing welfare regimes

Although, in the long term, market forces and government intervention are instrumental in determining the specific size of each of the housing

Table 1.3 Housing tenure, Great Britain, 1950-98

	Owner-occupied (%)	Local authority (%)	Housing association (%)	Private rented (%)
1950	29.0	18.0	—	53.0
1961	42.3	25.8	—	31.9
1971	50.6	30.6	—	18.9
1981	56.6	30.3	2.2	10.9
1991	66.3	21.1	3.1	9.6
1998	67,6	16.9	5.0	10.6

Source: DoE, Annual Report, 1993; DETR, Housing and Construction Statistics (various)

Table 1.4 Housing tenure in the United Kingdom, 1999

	Owner-occupied (%)	Local authority (%)	Housing association (%)	Private rented (%)
England	68.2	15.6	5.1	11.1
Wales	71.6	15.6	4.1	8.6
Scotland	62.4	25.1	5.7	6.8
Northern Ireland	71.9	21.0	2.6	4.4
United Kingdom	67.6	16.3	5.7	10.8

Source: ONS (2000a)

tenures, the socio-political system that is in operation provides the arena, in the shorter term, in which the relationships between the market and policy develop. Esping-Andersen (1990) suggested that in advanced capitalist countries there were three distinct welfare regimes: social democratic, corporatist and liberal (or neo-liberal). The first group, the social democratic states, are concerned with reforming welfare provision on the basis of universalism and social ownership extended to all classes (Barlow and Duncan, 1994). Within this group (which is currently confined to Scandinavia), countries aim to provide a 'one-nation' system of welfare based on equality of high standards of welfare for all, as opposed to a system based on the satisfaction of minimum basic needs. To an extent, the United Kingdom adopted a social democratic regime in 1945 and maintained it, intermittently, until the mid-1970s. The second group, the corporatist states (such as France, Germany and Austria) attempt to reinforce the rights attached to different classes and professions, and to this end are willing to replace the market as a provider of welfare. However, this differentiated form of welfare provision has not been a feature of welfare provision in the United Kingdom. The third group, the neo-liberal welfare states, provide little more than a means-tested 'safety net' of limited benefits for low-income, working-class state dependants, and include such countries as the United States, Canada, Australia, New Zealand, Ireland and - increasingly since the late 1970s - the United Kingdom...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Contents
• List of figures
• List of tables
• List of boxes
• Preface
• List of abbreviations
• Chapter 1 Introduction
• Part I Supply of new and renovated housing
• Part II Housing markets and housing tenure
• Part III Single issues in housing policy
• References
• Index