The Latvian government established the Housing Affordability Fund in mid-2022, a long-term self-sustaining financing model to channel investment into affordable housing. The fund is now being scaled up to ensure lasting impact on the Latvian housing market. This report identifies options for institutional arrangements, funding and financing opportunities, and operational tools to achieve this aim. It draws on the rich and diverse experiences of four peer countries in establishing and operating revolving fund schemes for affordable housing (Austria, Denmark, the Netherlands and Slovenia), and also reflects findings from engagement with a range of stakeholders in the Latvian housing sector.
Many Lithuanian households struggle to afford good-quality housing. The housing stock is dominated by owner-occupied, multi-apartment buildings that are energy inefficient and face persistent quality gaps. While average household spending on housing is relatively low, house prices have been rising, and many households cannot afford to move to higher quality homes that better suit their needs. Lithuanian policy makers have stepped up support for housing in recent years, but more actions are needed. This report presents the main features of the Lithuanian housing market, highlights housing challenges that have been amplified by the current economic and geopolitical crises, and assesses current policies to address housing affordability and quality gaps. It proposes a series of recommendations to strengthen the supply of and access to affordable housing, and to support Lithuania’s commitment to make housing policy a priority.
Cities across the world have been battling a housing crisis in recent decades, with many residents increasingly struggling to find affordable homes, and broader issues arising around tackling homelessness, improving housing quality, and harnessing the role of housing in climate change mitigation. This housing crisis has been exacerbated by the cost-of-living crisis that saw inflation reach record highs in 2022. City mayors can take critical action through their powers over housing, land use, and infrastructure. This paper highlights the systemic issues underlying the housing crisis in cities, and offers inspiring examples of how cities in OECD countries and beyond have been addressing these challenges. It aims to inform the 6th Meeting of OECD Champion Mayors for Inclusive Growth and drive positive change towards more affordable cities and homes for all.
Expanding on the findings of Brick by Brick: Better Housing Policies, this second volume delves into key trends shaping housing policies in the post-COVID-19 era. The first chapter provides an overview and discusses the need to monitor the pandemic's impacts on housing affordability, address the energy crisis through low-carbon housing initiatives, maintain financial resilience amid fluctuating housing cycles, and facilitate the reshaping of housing markets in response to remote work and environmental concerns. The second chapter focuses on the decarbonisation of the housing sector. It recommends a mix of carbon pricing, energy-efficiency certification and regulation, and subsidies to meet net-zero targets while accounting for housing market specificities. The chapter also calls for deploying complementary policies to limit adverse impacts on low-income households. The third chapter examines housing finance, focusing on the tension between supporting mortgage borrowing and promoting financial resilience. It also discusses the rise of non-bank real estate finance and the potential for mortgage finance to support housing decarbonisation. The fourth chapter explores how the new work-life balance, enabled by the rise of remote work, is reshaping housing demand and proposes a set of tailored urban policies to address this shift. Overall, the report provides a comprehensive blueprint for housing policies in the post-pandemic world.
The COVID-19 pandemic has led to a significant shift in the way people work, with an increasing number of individuals opting to work from home. Fewer commutes allow people to live further away from the city centre, where jobs typically concentrate. Against this background, this paper tests the hypothesis of a shift in housing demand away from the city centre towards the suburbs using a novel granular house price data set covering 16 OECD countries. The results indicate a flattening of the house price gradients in most large urban areas with profound consequences for housing policies and the city of the future.
OECD Regions and Cities at a Glance presents indicators on individual regions and cities since the turn of the new millennium. It provides a comprehensive picture of past successes and likely challenges that regions and cities in OECD members and partner countries will face in their efforts to build stronger, more sustainable and more resilient economies. By relying on a combination of traditional and more innovative data sources, OECD Regions and Cities at a Glance describes the evolving nature of spatial disparities within countries from a multidimensional perspective. New topics covered by this edition include the economic impact of recent shocks, such as the pandemic and the energy crisis, housing affordability, climate change and digitalisation.
Entre extinction des feux et subventions, tous les moyens sont bons pour tenter de faire face à la crise énergétique. Mais pendant ce temps, nos bâtiments continuent de gaspiller allègrement l’énergie (et notre argent). Découvrez pourquoi et comment les villes peuvent contribuer à y remédier, avec Soo-Jin Kim, de la Division des villes, des politiques urbaines et du développement de l'OCDE.
The historic mass outflow of people fleeing the unprovoked Russian war of aggression against Ukraine has placed significant pressures on the reception capacities of OECD and EU countries. Ukrainian refugees face a variety of settlement-related challenges. Perhaps the most pressing of these challenges is access to housing. OECD countries have rallied private citizens, NGOs, the private sector and government services to provide housing, but regardless of the short-term solutions identified, the transition to more durable accommodation is a looming challenge. This brief presents an overview of specific policy decisions taken by these countries regarding the short-term housing of refugees from Ukraine and challenges identified to date. It seeks to identify relevant considerations for those countries that are beginning to adapt their thinking regarding Ukrainians’ prospects for longer-term stays.
Housing Taxation in OECD Countries provides a comparative assessment of housing tax policies in OECD countries and identifies options for reform. The study starts with an overview of recent housing market trends and challenges and an analysis of the distribution of housing assets. It then examines the different types of taxes that are levied on housing in OECD countries, assessing their efficiency, equity and revenue effects. It also evaluates the role of specific tax policy instruments in addressing current housing challenges. Based on the assessment, the study outlines a number of reform options that governments could consider to enhance the design and functioning of their housing tax policies.
Against a background of labour market and broader challenges linked to COVID-19, the enduring rise of real house prices over the past decades has made it increasingly difficult for young households to buy their first home in many OECD countries. This report identifies a number of key challenges facing young people in the housing market, and proposes a series of selected policy issues for further research.
Boris Cournède from the OECD Economics Department and Marissa Plouin from the OECD Directorate for Employment, Labour and Social Affairs explore the challenges faced by young people, who increasingly struggle to find quality, affordable homes.
The paper introduces a novel, granular house-price dataset sourced from a network of public and private data providers. It offers the first results of investigations into changes in the urban geography of housing markets following the COVID-19 pandemic. The rapid rise of working from home practices is likely to incentivise many people to seek more space and accept living further away from city centres as commuting requirements are reduced. The paper's results indicate that housing demand might have indeed shifted away from the centres to the peripheries of many large urban areas. These early results also show that such a shift has been neither universal nor uniform. It is typically stronger in cities where pre-COVID-19 house price disparities were larger and where moving to the periphery provides significantly better access to green space while still allowing easy access to high-speed internet and/or where COVID-19 restrictions were more stringent. The paper concludes by discussing implications for policy, including the benefits of flexible settings that allow supply to adjust smoothly to new demand patterns and outlining avenues for future work planned to improve and capitalise on the new dataset.
This paper measures the effective taxation of housing investments in 40 OECD member and partner countries. The paper derives both Marginal Effective Tax Rates (METRs) and Average Effective Tax Rates (AETRs), which incorporate the stream of income and taxes over the life of the housing investment. The methodology is applied to owner-occupied and rented residential property for investments that are financed with debt or equity. The paper finds that the level and components of housing taxation depend greatly on the investment scenario. Effective tax rates vary substantially depending on the holding period, rate of return, tenure (owner-occupied or rented), financing scenario, and the inflation rate. Effective tax rates do not vary much with the taxpayer’s income and wealth or with the rate of return. The paper finds there is scope to reduce the tax differential between different investment scenarios and strengthen progressivity and horizontal equity.
The landscapes of housing loan markets vary considerably across OECD countries, reflecting differences in preferences and policy settings. This paper first draws a topography of disparities in mortgage structure, documenting considerable variation across OECD countries in key features such as in use of fixed vs variable interest rates and typical maturities. The paper then discusses policies that can influence these outcomes. It highlights the scope for encouraging inclusive access to housing through tax-and-spending programmes that are neutral between renting and owning rather than through often very costly tax advantages for mortgage borrowing. The paper finally proposes a novel indicator to measure the balance between the rights of borrowers and lenders. Mortgage markets are deepest in countries where the index shows that creditor and borrower rights are balanced rather than severely tilted to one side.
This report reviews key trends in real estate finance since the Global Financial Crisis (GFC) and the more recent COVID-19 pandemic. It offers an integrated assessment of the shift from structured products to leveraged institutions and collective investment vehicles and puts forward policy considerations to help mitigate procyclicality and excessive risk taking in real estate markets by some entities in the non-bank financial sector.
Following a period when homelessness rose in many countries, the onset of the COVID-19 pandemic prompted governments across the OECD area to provide unprecedented public support – including to the homeless. How can countries build on this momentum and ensure more durable outcomes? The experience of Finland over the past several decades – during which the country has nearly eradicated homelessness – provides a glimpse of what can be possible with a sustained national strategy and enduring political will.
While indices tracing the evolutions of regional house prices are increasingly available, this is less the case for similar data on house price levels. And where data on house price levels exist, they are not necessarily consistent with the patterns observed from house price indices. Yet, consistent regional statistics on house price levels are fundamental to assess housing affordability, potential barriers to labour mobility across regions, and for the design of housing policies. This article puts forward a method to compile regional house price levels that are consistent with the evolutions given by quality-adjusted house price indices, representative of the underlying stock of dwellings, and based on the information on house price levels that is available at all dates rather than in a single reference year. This method could be scaled up to different countries. The results obtained with Spanish data show that the decline in house prices following the global financial crisis of 2008-09 initially reduced the dispersion in house prices across Spanish regions, but this dispersion has increased again afterwards, and since 2016, it exceeds the one recorded in 2008. A comparison of price-per-m² to regional-income ratios shows that the relative housing affordability in the region of Madrid deteriorated compared to all other Spanish regions in the last decade. Monitoring whether shifts in housing demand following the COVID-19 pandemic will reverse this trend will be key.
This paper discusses housing challenges facing people with disabilities in OECD and EU countries, and policy supports to make housing more affordable, accessible and adapted to their needs. It focuses on the adult population with disabilities living outside institutions, drawing on data from the European Union Survey of Income and Living Conditions (EU-SILC), household surveys, national population census and disability surveys, and country responses to the 2021 OECD Questionnaire on Affordable and Social Housing. The paper summarises housing outcomes; discusses policy supports to ensure that people with disabilities can be safely, affordably and independently housed; and outlines actions for policy makers.
Dr. Rüdiger Ahrend and Dr. Jaebeum Cho from the OECD Centre for Entrepreneurship, SMEs, Regions and Cities argue that real-life housing politics is more complicated than playing Simcity and call for better coordination of land-use and zoning policies across levels of government with the view to better aligning housing demand and supply.