OECD report: Policies to make housing more affordable
Less than half of the OECD population, on average, is satisfied with the affordability of housing in the city or area where they live. Housing prices have increased over the past decades, and households are dedicating a larger share of their budget to housing costs than they used to. Low-income and other vulnerable households have long faced this challenge, while an increasing share of the middle class also face affordability issues.Challenges differ considerably across and within countries. Affordability gaps are particularly pronounced in job-rich urban areas and among low-income households, renters in the private market, and youth. Youth, for instance, are in some countries increasingly living at home with their parents, whilst navigating a challenging labour market.The COVID-19 pandemic has exacerbated longstanding housing challenges, whilst renewing concerns over poor housing quality and heightening housing insecurity for households hard-hit by the crisis. In many OECD countries, governments have introduced emergency support to avoid some of the worst effectsof the crisis, with mortgage forbearance and eviction bans among the most common.Governments employ a range of policy tools to make housing more affordable. Some housing support measures (such as housing allowances and –in most countries –social housing) tend to target low-income and other vulnerable households. Meanwhile, others, particularly those that aim to support prospective or existing homeowners (such as subsidies and tax relief to facilitate home ownership) are more likely to benefit median-income households, and may not always reach households in greatest need.Renewed public and private investment in the affordable and social housing stock is needed, and can be a key lever to an inclusive economic recovery from the COVID-19 crisis. Governments should also consider improving the targeting of public support for housing, but the expected gains of such efforts should be carefully weighed against the potential trade-offs, including increased segregation and reduced social mixing. Policy measures to make the private rental market more affordable should also be a priority in many countries.Governments must continue to navigate the challenging and uncertain road ahead. It will be crucial to address housing vulnerability in the short term, including by extending temporary relief to struggling households, provided that emergency supports are phased out as conditions allow. Yet policy makers must also anticipate potential longer-term changes to the housing market and housing demand, such as increased demand for affordable housing and housing support, as well as possible changes to demand spurred by the widespread generalisation of teleworking.
Please cite as: OECD (2021), “Building for a better tomorrow: Policies to make housing more affordable”, Employment, Labour and Social Affairs Policy Briefs, OECD, Paris, http://oe.cd/affordable-housing-2021.Webpage url: oe.cd/ahd