Affordable housing = rocket science?
Affordable... in England..? The average house price in England was 6.4 times local salaries in 2002, and 8.8 in 2014. For London: ~ 20 times the local salaries. In Oxford, Brighton and Cambridge the average private rent took around 50% of local pay. Rents in London took an average 55% of the local pay. Source: Office for National Statistics.
Affordable in Sweden? The cost of buying a home went up by 14%, across Sweden (Oct. 2014 - Oct. 2015) News of the hike in prices came just a week after the country s National Institute of Economic Research warned that the housing market could soon end up crashing.
Affordable in Copenhagen..? Property prices in Copenhagen rose by 40-60% in 3 years June 2012-Oct. 2015 (Bloomberg Oct. -15) Denmark s biggest mortgage bank, Nykredit, says there s a real risk Copenhagen is heading into a property bubble.
800,000 Vietnamese people fled the country in the two decades after the end of the Vietnam War.
Temporary homes better shelter by IKEA and UNHCR
A mission impossible really? Germany: 1960s; an average of 570,000 homes were being built annually 714,000, in 1973! UK: 1.5 Mi homes were completed 1945-55 Sweden: 1 Mi homes 1965 1975 The NL: From 2.1 Mi homes in 1947 to 4.8 Mi homes in 1980 (130 %) 1980-2000: 2 Mi new homes were added to the housing stock.
Affordable housing vs speculation and the market The financial crises started, in 2008, with the sub-prime market in the US, and then spread to Europe, where banks were, and are still, very willing to lend out money. The rest is history or is it really..? What, if any, did we learn from this crises?
What did we learn? That banks, financial sector, do not have a social responsibility, that governments do not control the financial sector - enough, That the financial fates of banks and its governments are too closely linked: Insolvency of one threatens insolvency of the other. that the financial sector can destabilise our entire societies.
What did we learn? That true affordable housing is generally not achieved by the market, but by governments and local authorities - by the public sector. That countries with a good balance between rental- and ownership housing (DE, AT, CH) did not, or do not, experience major housing bubbles > more stabile housing markets.
What do we need? Prevent the banks from getting too big - Too big To Fail - TBTF (so that governments and taxpayers should not have to pay up when these banks can not be shut down, can not go bankrupt TBTF) That public money - tax payer s money - should stay in the public sector. Right-to-Buy (of public/social housing) is not the solution.
What do we need? More tenure neutral housing policies between homeownership and renting and, more government support towards affordable rental housing. like after WWII - construction of (affordable) housing, not only created homes, but also jobs and political stability.
Development of housing tenure, in % of total stock, 1946 2011 + trend for 2014 90 80 70 60 50 40 30 20 10 0 52.6 26.1 16.5 80 What do we need: Rules that controls the rents, also in the private rental sector that makes rents affordable and foreseeable. 8.1 70,8 65 18,8 25 8,9 1946 1961 1971 1981 1991 2002 2006 2011 2014 7,5 IRELAND ownership private rental social rental Source: National Economic & Social Council IE, 2014
Affordable housing = rocket science? No, it s all about politics!
Affordable housing where there is political courage and will, there is always a way! Thank you! /Magnus Hammar info@iut.nu