Canada, the United States, and Australia each have a growing affordable housing crisis. We have seen the headlines:
All three wealthy nations use gallons of ink announcing programs to address the problem. The US administration’s 2021 mega infrasrtructure plan includes the most recent grand scheme. The plan allocates US$ 213 billion to affordable housing initiatives. Over a ten year period the monies will be used to:
At first blush, this would appear to be an ambitious plan. Today, ten million American families spend more than 50% of household income on housing. Additionally, federal housing assistance reaches only one in four eligible families. There is a current 6.8 million unit shortage of affordable rental homes for low income earners in the States. Ergo, a program to build and retrofit 2 million units over ten years doesn’t even start to meet existing needs.
The dollar amount of the US program sounds impressive. However, the program cost per person per year is only $65. Contrast this to Vienna, Austria that already boasts 440,000 affordable housing units. In that country, the annual per person cost of affordable housing works out to about $360. This allows for the addition 4,300 affordable housing units each year.
Success of the ten-year plan will rely on the usual smorgasbord of government programs. There will be some direct government funding, tax credits, grants, and project-based rental assistance. Also, it will rely heavily on public-private partnerships with private developers, municipalities, and not-for-profit organizations. It seems that the program is “hoping to achieve significantly different results by repeating the same mistakes.” Is this not a frequently quoted definition of insanity?
There is no intent to pick on the United States. It is just that its recently announced program exemplifies the lack of ambition and imagination behind many developed countries’ plans to deal with the affordable housing crisis. So what has to be done?
Developed nations that have chronic housing problems appear focussed on providing opportunity to rent or purchase a home. Also, ambition constrained by a definition of affordable as 30% of median household income ignores the 50% of the population below the median.
Countries with the greatest success in providing affordable housing for all see housing as a basic human right. Finland embodies this approach with its nation-wide Housing First program, which has radically reduced homelessness in that country. In Denmark, co-operatives own one-third of the homes in Copenhagen and the non-profit sector houses one-fifth of Danes. The Austrian model targets housing costs of between 20% and 25% of individual household income. Is it any wonder these countries top multiple “happiness” and “livability” indexes.
The benefits of good housing for all go beyond happiness. Children have more confidence, perform better in school, and are more involved in community activities. Family health, both physical and mental, improves. Household financial stability develops. All of this benefits community. Employment increases, taxes and local government revenues rise, and households have more money to spend. Crime rates fall, health care costs drop, and reliance on social welfare programs reduces. Good affordable housing programs contribute to their continued development.
Canada, the United States, and Australia are not alone! Many other countries such as Ireland, the United Kingdom, and France, have a growing affordable housing crisis. Step one is a change in attitude and ambition.
Co-working space came to mean the notorious We Work model. When I had been asked to opine on co-working I tried to steer the conversation away from the Adam Neumann / Softbank flimflam growth model. Instead, I suggested that property owners look at usage and users. While I doubted We Work’s ability to survive I […]
Before I fall completely into the trap of opposition politics, I have decided to take a break from never-ending criticism and to start suggesting solutions to the affordable housing conundrum. Do I have a plan? No, more a collection of ideas To start with, I think there are three key issues: Home ownership is not […]
I know! I am going to sound like a grumpy old man. Maybe that is because I am. I have been scratching my head in wonderment at the Taylor Swift phenomena. Is she an Incredible song writer, composer, and performer? I really don’t know! A discussion for another time? But probably not. At my age […]
Don’t build it! At least, Not In My Back Yard ! I acted as an advisor in the sale of a beautifully natural, 14-acre urban waterfront estate. Existing zoning allowed for the development of 30 to 35 single-family homes, which after road dedication would leave very little green space. I did not think that was […]
We were visiting Glasgow (literally that Dear Green Place in Gaelic) to see where my father was born, grew up, and went to University. Fortunately for me, my cousin John from Australia had just visited and had met with historians, Bruce Downie and Norry Wilson. So, we too arranged to meet them in the Govanhill […]
Vienna on top again. This week both Monocle Magazine and The Economist unveiled their quality of life / most liveable city indexes. There are differences in the way each publication sets its index. So it is even more impressive that once again, Vienna tops both lists. I am a bit lazy today so rather than […]