Keynote speech by Angel Gurría
OECD, Paris France - Thursday, 15 October 2020
Dear Mr. Madsen, Ms. Edwards, Ladies and Gentlemen,
I would like to thank Housing Europe for their invitation to this timely event.
Affordable and social housing is increasingly recognised as a key policy issue in Europe and, indeed, across the OECD. I am therefore delighted to present today the OECD brief, “Social Housing: A Key Part of Past and Future Housing Policy”, which was made possible with the support of the European Commission.
The importance social housing during COVID-19
The toll of the COVID-19 crisis on the housing sector is not yet fully known. However, falling incomes may make the cost of housing prohibitive for many struggling families. The social housing sector can play a key role in charting a path out of the crisis, and help countries build back better, literally!
Today, social rental housing– often run by committed housing organisations and professionals such as yourselves – accounts for almost 30 million homes in the OECD – around 6% of the total housing stock. However, the sector looks very different from one place to another. For example, in some OECD countries social housing accounts for less than 2% of all housing; while in countries like Austria, Denmark, the Netherlands and Scotlandthis figure is over 20%.
For decades, the social housing sector has provided shelter and housing security for low-income households, and this mission is as important now as ever. In 2018, one in three low-income renters in the OECD spent over 40% of their disposable income on housing costs. Low-income households are also more likely to live in overcrowded conditions. Looking ahead, social housing can help us to achieve a more inclusive and sustainable recovery. Let me briefly explain how:
Social housing for a more inclusive recovery
At the onset of the COVID-19 crisis, many governments acted swiftly to keep people in their homes, introducing emergency housing support, such as eviction bans or rent controls. These help short-term housing affordability for tenants, but could create disincentives to investment over the longer term and could be phased out once conditions allow.
As social housing providers, you were on the frontlines to ensure that tenants could cope financially with the crisis. These measures have helped to avoid the worst immediate impacts of COVID-19 – yet they are not the long-term, structural solution that we need. To build back better, we need renewed investment in the housing stock. This means reversing recent trends.
Over the past two decades – and especially since the Global Financial Crisis – public investment in housing development dropped by more than half on average across the OECD, accounting for less than 0.1% of GDP in 2018. Over the past 10 years, the relative size of the social housing stock has shrunk in all but six OECD countries.
During the same period, house prices have risen faster than incomes in 21 out of 33 OECD countries. The COVID-19 crisis has not created our current housing challenge, but it has amplified gaps in housing quality, affordability and stability.
We can do better! For example, the experiences of Austria and Denmark – whose social housing stocks are among the largest in the OECD – demonstrate that revolving funds, which ensure that social housing rents are re-invested in the sector, can be one pillar of a long-term funding strategy for social housing.
Social housing for a more sustainable future
Investing in social housing also goes hand in hand with a more sustainablefuture. Coming out of the crisis, we have an opportunity and a duty to develop a more environmentally sustainable housing stock. The buildings sector is responsible for nearly 30% of energy-related CO2 emissions in 2019. The opportunities to ‘green’ the sector are therefore massive!
As part of the European Green Deal, the “Renovation Wave” is a call for action to improve housing quality, and particularly the social housing stock. Many governments and social housing providers have already made this a priority. In France, for instance, the renovation of social housing is a key pillar of its National Housing Strategy. And the Slovak Republic’s housing refurbishment programme in recent decades has helped to improve both the technical quality and energy efficiency of the housing stock, while generating significant savings for households.
At the same time, we need to also ensure that renovations don’t become an excuse for “reno-victions” – displacing low-income and vulnerable households.
Ladies and gentlemen,
The OECD is committed to working with governments and stakeholders to develop better housing policies. Our ongoing Horizontal Housing project focuses on placing people’s access to decent, affordable housing at the centre, by providing whole-of-government, actionable policy advice. We stand ready to support your efforts towards a more inclusive and sustainable housing future.