OECD Housing resources

Explore recent OECD housing-related reports, working papers and policy briefs.

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Housing amid Covid-19: Policy responses and challenges

Housing policies for sustainable and inclusive cities

Housing policies for sustainable and inclusive cities

The rising cost of the middle-class lifestyle

The rising cost of the middle-class lifestyle

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18/01/2021
Housing affordability can be broadly defined as the ability of households to buy or rent adequate housing, without impairing their ability to meet basic living costs. Yet the reality is more complex, both in terms of the metrics used to measure housing affordability, as well as the policies introduced to make housing more affordable. As discussed in this brief, some measures provide an indication of housing affordability among the median household, while others are better suited to assess the challenges facing specific groups, such as low income households, youth or seniors.
21/10/2020
This paper delivers new evidence on the individual and policy drivers of residential mobility, covering a wide range of housing-related policies and conditions but also other relevant policy areas. The analysis uses household-level micro datasets allowing for an investigation of the drivers of the decision to move for a large number of OECD countries; as well for identifying differential policy effects across socio-economic groups, underscoring the distributional effect of policies. The evidence strongly supports the view that housing conditions and structural policies influence people’s decisions and possibilities to move. A more responsive housing supply is associated with higher residential mobility, suggesting that reforming land-use and planning policies may facilitate moving by reducing house price differences across locations. Social cash and in-kind spending on housing are positively correlated with residential mobility. Higher housing transaction costs, including from transfer taxes, are associated with lower residential mobility, especially among younger households, which are more likely to be first time-buyers. Stricter rental regulations are associated with lower residential mobility, particularly for renters, low-educated and low-income households. Beyond housing policies, more generous cash income support to low-wage jobseekers and minimum income schemes embedded in social transfers are positively associated with residential mobility; while excessive job protection on regular contracts is negatively associated with mobility, particularly for youth, low-income and low-educated individuals.
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15/10/2020
Social housing is an important dimension of social welfare policy and affordable housing provision, but there are significant differences across countries in the definition, size, scope, target population and type of provider of social housing. The relative size of the social housing sector has been shrinking in recent years in all but six countries for which data are available. At the same time, many countries have undertaken major building-revitalisation projects to improve the quality of social dwellings and the surrounding neighbourhoods. The COVID-19 pandemic has brought to the fore the enduring housing affordability and quality gaps facing many households.
08/10/2020
By combining fresh estimates of housing supply and prices with recent long-term projections for their fundamental drivers such as population, income and interest rates, this paper produces scenarios for residential investment and real house prices up to 2050. For half of the covered countries, projected increases in house prices are large enough to outpace real incomes, thereby further eroding housing affordability. The paper illustrates and quantifies how housing policies can make a difference. Removing mortgage interest relief eases price pressures and can contribute to more affordable housing. Likewise, streamlining land-use governance and easing rental control can help unlock housing supply, make housing markets more efficient and, ultimately, housing more affordable.
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10/09/2020
Housing is key to inclusive growth. It is the biggest spending item of household budgets, the main driver of wealth accumulation and biggest source of debt for most households. Housing and the neighbourhood in which people live also have important implications for individual health, employment and educational outcomes – effects that can begin in childhood and can last a lifetime. Nevertheless, the housing market may also present a barrier to inclusive growth for some groups, such as low-income households, children, youth, seniors and the homeless.The COVID-19 pandemic has highlighted even more abruptly just how important housing issues are to people, and prompted governments to introduce a range of emergency housing supports. However, the pandemic has also underscored the need for governments to develop more structural responses to address persistent housing challenges.This report assesses the key underlying pre-COVID-19 housing policy issues and proposes a series of recommendations to support more inclusive housing outcomes. These include measures to address some of the structural barriers to inclusive growth in the housing market, as well as measures to address the specific housing challenges facing vulnerable groups.
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03/08/2020
This blog reviews new OECD evidence of the impact of the COVID-19 crisis on construction and discusses policy trade-offs between the objectives of preserving short-term housing affordability for tenants and mortgage-holders, facilitating mobility and ensuring sufficient, environmentally sustainable supply. The full study is available on the OECD “Tackling the coronavirus” online hub: Housing Amid Covid-19: Policy Responses and Challenges.
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22/07/2020
The COVID-19 pandemic has severely disrupted construction, made it difficult for many households to pay for shelter, and seriously hurt the housing sector. Governments have responded with a wide array of measures to protect tenants and mortgage-holders, as well as support builders and lenders. This note mobilises web-search data to shed new light on the impact of the crisis on the construction sector. It then takes stock of measures taken by governments and argues that some of the relief could, if not duly phased out as planned, create unintended inefficiencies and notably make housing supply less responsive to changes in demand and the evolving needs of society. The note concludes by building on recent empirical findings that stress the importance of gradually transitioning from immediate rescue measures to policy settings that can support the recovery and the development of efficient, inclusive and sustainable housing markets.
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19/06/2020
The rate of homeownership is close to the OECD average in Luxembourg. However, strong house price increases, mainly driven by population growth and limited housing supply, led to a deterioration in affordability of housing, in particular for the young and added to the wealth gap between homeowners and renters.
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17/06/2020
Housing affordability and quality are pressing challenges in Latvia. While Latvian households spend, on average, less on housing than their OECD peers, many are stuck in poor quality housing. Residential investment has stagnated since 2008, and the housing stock – much of which was built during the Soviet era – has been insufficiently maintained. In the face of these challenges, public support for housing is limited, with a large share of households who are too rich to be eligible for benefits and social housing, yet too poor to qualify for a commercial mortgage. Meanwhile, an underdeveloped rental market further limits affordable housing alternatives. This study builds on the extensive work conducted by the OECD on housing and economic development to help Latvia address some of these challenges.
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16/06/2020
The report presents an in-depth analysis of various policies that aim to reduce the greenhouse gas emissions of urban transport. Decarbonising transport lies at the core of efforts to mitigate climate change and has close links to urban sustainability and housing affordability. The report identifies the drivers of rising emissions in the urban transport sector and offers pathways to reduce them through a combination of transport and land use policies. The analysis yields a holistic welfare evaluation of these policies, assessing them according to their environmental effectiveness, their economic efficiency and their impact on fiscal balance and housing affordability. The report concludes that significant reductions in emissions from urban transport can be achieved through a careful alignment of transport policies designed to promote the use of public transit and electric vehicles, and land use policies, which foster a more compact urban form. The study is based on the case of Auckland, New Zealand but the lessons drawn are relevant for institutions and governments working on issues relating to urban sustainability, transport, housing and climate change mitigation.
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25/05/2020
Based on a survey, this paper presents new data on the decentralisation of the housing system and co-ordination mechanisms across levels of government, focusing on the provision of social housing. Decision-making in social housing tends to be more devolved to sub-national actors, as compared to other key public services. Policy decision making tends to be more centralised, while sub-national governments and housing providers have more control over decisions regarding the inputs, outputs and monitoring of social housing. Governments globally have implemented a mix of housing policy interventions. Demand side interventions include tax allowances and subsidies to facilitate the purchase of a home or the provision of social housing in the rental market to those in need. Interventions to influence the supply of housing are generally aimed at housing developers or sub-national governments, to stimulate housing construction. There are a number of policy tools readily available to sub-national governments to improve housing outcomes, including the implementation and reform of taxes on immovable property and the relaxation of restrictive land use regulations.
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15/04/2020
In a context marked by rapid urbanisation, growing housing demand and the worsening impacts of climate change, national governments play a vital role in delivering environmentally sustainable cities with adequate and affordable housing. This paper reviews national housing policy instruments from around the world, analysing their impacts on compact urban development and housing affordability. First, the paper proposes a framework to better understand the housing market in cities by outlining drivers of housing supply and demand as well as the constitution of the housing market and its segments: homeowners and renters, single- and multi-family homes, market and below-market price segments. Next, the paper analyses a range of policy options available to national governments, which are summarised and evaluated according to their impacts on compactness and affordability. Last, the paper provides short-, medium- and long-term policy recommendations to align national housing policies with the goal of delivering more sustainable and inclusive cities. The paper is one of the first attempts to consider the intersection of physical urban form and housing affordability from a national policy perspective.
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09/03/2020
How’s Life? charts whether life is getting better for people in 37 OECD countries and 4 partner countries. This fifth edition presents the latest evidence from an updated set of over 80 indicators, covering current well-being outcomes, inequalities, and resources for future well-being. Since 2010, people’s well-being has improved in many respects, but progress has been slow or deteriorated in others, including how people connect with each other and their government. Large gaps by gender, age and education persist across most well-being outcomes. Generally, OECD countries that do better on average also feature greater equality between population groups and fewer people living in deprivation. Many OECD countries with poorer well-being in 2010 have since experienced the greatest gains. However, advances in current well-being have not always been matched by improvements in the resources that sustain well-being over time, with warning signs emerging across natural, human, economic and social capital. Beyond an overall analysis of well-being trends since 2010, this report explores in detail the 15 dimensions of the OECD Better Life Initiative, including health, subjective well-being, social connections, natural capital, and more, and looks at each country’s performance in dedicated country profiles.
03/02/2020
Housing prices have been growing strongly in Luxembourg, stoked by population growth, a high rate of household formation and limited use of land available for construction. Increases in price-to-income ratio mainly reflect high valuations of residential real estate, which rise faster than incomes, leading to increasing financial risks related to household indebtedness. Housing affordability has been deteriorating in particular for low-income households who do not profit from highly subsidised social housing. A mix of policies addressing supply-side restrictions, such as land hoarding and resistance to densification, together with policies to increase housing tenure neutrality and better targeted fiscal support will be needed to make the housing market more efficient and inclusive. Measures increasing the opportunity costs of unused land in urbanised areas and unoccupied dwellings could be combined with further reform of land-use planning, including measures involving municipalities in selectively increasing residential density in areas well-connected to the transport network. Housing tenure neutrality could be supported by removing or at least reducing mortgage interest deductibility and other fiscal instruments supporting homeownership and by developing the recurrent taxation of immovable property into a more important fiscal resource based on up-to-date real estate valuations. The supply of social rental housing should be stepped up and access to it made conditional on recurrent means testing ensuring better targeting to those most in need. Private rental sector could be expanded by relaxing the rules on renting parts of housing units and conversion of existing dwellings into rental housing.
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24/12/2019
Housing is a key part of well-being and contributes to spatial and social mobility. In India, the housing market is characterised by excess demand for affordable dwellings, a small rental market and an oversupply of high-end housing, especially in urban areas. The housing shortage among low-income groups is large, despite increases in the stock of quality housing in recent years, as house prices are high relative to incomes and access to credit is often difficult. Prices are high because of structural rigidities in the market, stemming from stringent zoning and land regulations, restrictive floor indices and high transaction costs, in the context of high population density. Ongoing urbanisation, and particularly rural-urban migration, will intensify demand for affordable housing, especially at the low end of the market. Improving the functioning of the market calls for clarifying property rights and easing rent control and zoning rules. Lowering transaction taxes, especially stamp duties, would support mobility. Simplifying land use regulations and enhancing contract enforcement would also boost housing supply. The Real Estate (Regulation and Development) Act of 2016, which aims at bringing transparency, protecting the interests of homebuyers and boosting investment in the real estate sector, helped improve the market situation. By improving the collateral security, the law can also facilitate access to housing finance. The Housing for All programme that aims to provide a home for every Indian by 2022 is a good way forward in reducing the shortage. As with many past government programs, it promotes ownership. More is needed to develop rental housing and to address the needs of vulnerable groups. The 2019 Model Tenancy Act is a step in the right direction.
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20/12/2019
The trend rise of house prices in many OECD countries suggests weakness in the adjustment of supply to demand. This paper estimates long-term elasticities of housing supply to prices in OECD countries before exploring their drivers with a focus on policies. It finds a significant association between weaker supply responsiveness and a proxy measure for more restrictive land-use regulation. Besides, tighter rent controls are linked with lower supply elasticities. In turn, weak supply responsiveness implies that house prices rise more following stronger demand. The sensitivity of house prices to household income is also higher in countries that provide larger amounts of tax relief for homeowners.
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20/12/2019
Making housing more affordable ranks high on the policy agenda across the world. One way to achieve affordable housing is to ensure sufficiently elastic supply of the housing stock in response to demand shocks. This paper aims at disentangling policy from non-policy drivers in explaining cross-regional differences in housing supply elasticities. It uses GIS data to account for the presence of natural and man-made obstacles to residential construction in functional urban areas across the 12 OECD countries that provide sufficiently long time series for regional house prices. The results suggest that the presence of water, steep land, parks and high-density urban areas all restrict the supply of housing. However, there remain very large differences in supply elasticities across countries, which corroborates the finding from national analysis that policies have a strong influence.
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19/12/2019
This paper produces new evidence and stylised facts on housing, wealth accumulation and wealth distribution, relying on an in-depth analysis of micro-based data on household wealth across OECD countries. The analysis addresses several questions: i) How is homeownership and housing tenure distributed across the population along various socio-economic characteristics such as income, wealth and age? What is the weight of housing in households’ balance sheets and how does this vary across socio-economic groups? ii) What is the incidence of mortgage debt across households and how does this vary across socio-economic groups? What is the impact of mortgage debt on access to homeownership and wealth accumulation, and on debt overburden and financial risks among vulnerable groups? iii) Is housing a vehicle for wealth accumulation? Can it be a barrier to residential mobility? iv) Is there a link between homeownership and wealth inequality? Between inequality in housing wealth and in total wealth? A key policy issue addressed in this paper is whether and how housing-related policies affect wealth distribution. Another important issue is whether housing-related policies raise potential trade-offs between equity, or inequality reduction, and other policy objectives such as employment and productivity growth as well as macroeconomic resilience. Informed by the stylised facts and existing evidence, this paper discusses preliminary policy implications of housing reform to promote inclusiveness and social mobility, to enhance efficiency in the allocation of labour and capital and to strengthen macroeconomic resilience.
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27/11/2019
Homelessness affects less than 1% of the population across the OECD, but nevertheless concerns more than 1.9 million people – and this is likely an underestimate. Homelessness is, nevertheless, difficult to measure and compare across countries. There is no common definition of homelessness, and countries’ data collection efforts differ in their method, scope and frequency. Moreover, people experience homelessness in different ways: the chronically homeless are a small but visible group, who generally require multiple supports, while a large and in some countries growing number of people are temporarily homeless who may also need different types of support. In many countries, homelessness has become increasingly prevalent among women, families with children, youth, migrants and seniors. Some OECD countries have developed national homelessness strategies that call for tailored solutions to address the varied needs of a diverse homeless population. In addition to preventive measures, ‘Housing First’ approaches that provide immediate, permanent housing to the homeless, along with integrated service delivery, may be most effective for the chronically homeless. Emergency support, including rapid rehousing, can help the transitionally homeless.
11/09/2019
New Zealand’s housing supply has not kept pace with rising demand, including from net immigration. Affordability has worsened, particularly for low-income renters. Government action is underway to allow new housing through initiatives such as the Urban Growth Agenda, KiwiBuild and the Housing and Urban Development Authority, but further steps are needed to improve well-being. Clear overarching principles for sustainable urban development and rationalisation of strict regulatory containment policies would allow the planning system to better respond to demand for land. Incentives for local governments to accommodate growth could be increased by giving them access to additional revenue linked to local development. More user charging and targeted rates would also help to fund infrastructure required to service new housing. Government delivery of affordable housing through KiwiBuild should be re-focused towards enabling the supply of land to developers, supporting development of affordable rental housing and further expanding social housing in areas facing shortages.
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