Social Housing in Different Countries: How it Works and Current Challenges  Ricky Prota February 27, 2024

Social Housing in Different Countries: How it Works and Current Challenges 

Social housing plays a crucial role in providing affordable homes for individuals and families worldwide. However, the approach to social housing varies significantly from one country to another, and each region faces its own challenges.  

The UK is certainly not alone in its housing crisis (the country is now seeing record rates of homelessness); other countries are facing similar struggles.  

In this article, we’ll explore the social housing systems in three distinct regions: the United States, Canada, and the European Union (common practises across the EU, since each member state has its own approach). 

Social Housing in the United States 

How Does it Work? 

The United States takes a somewhat different approach to social housing compared to the UK. There is no unified national social housing system, but various federal, state, and local programmes, as well as programmes by non-profit organisations. 

Public Housing 

Public housing is the US equivalent of council housing in the UK. It’s the result of the United States Housing Act of 1937, which lead to the construction of 1.4 million units.   

Public housing is funded by the federal government and administered by The Department of Housing and Urban Development (HUD), which has various regional and local offices. HUD serves low-income families and individuals (with rent typically based on household income). 

HUD administers the provision of capital and operating funds to so-called Public Housing Agencies (PHAs) that work directly with residents.  

The Housing Choice Voucher Program 

Also known as Section 8, the Housing Choice Voucher Program is a federal initiative that provides rental assistance to eligible low-income individuals and families, as well as the elderly and individuals with disabilities. 

PHAs determine the degree of support each applicant needs and pay that proportion of the rent directly to landlords. (Applicants have to pay at least 30% of their monthly income towards rent and utilities.) 

Non-Profit Organisations 

Similar to the UK’s housing associations, various non-profit organisations play a significant role in providing affordable housing in the US. They often collaborate with local governments and rely on a mix of public and private funding to develop and manage affordable housing projects. There are also a range of nonprofits providing related services such as providing maintenance and community support services. Many of these organisations operate on a state or regional level.  

Current Challenges  

The US is also amidst a housing crisis, with record unaffordability and near-record shortages in 2022. To be precise, 49% of all renters were considered cost-burdened, while 26.4% spent more than half their income on housing. In addition, the demand for affordable housing exceeds supply.  

HUD has established several programmes to increase the supply of affordable housing, as well as the Housing Trust Fund to support households on very low incomes (rent has increased by 24% in the US over the past three years). The fund was established in 2015 and funding is allocated in varying amounts by state.  

Another long-standing challenge in US social housing is a lack of maintenance, leaving many tenants having to put up with unhealthy living conditions. When public housing first came about, the quality of construction was higher but with time, funding from Congress reduced, standards dropped, and many households await long-overdue repairs.  

In 2012, Congress and HUD launched the Rental Assistance Demonstration Program (RAD), geared towards redeveloping public housing with the assistance of private developers and investors. More than $40 billion in repairs are needed.  

Social Housing in Canada 

How Does It Work?  

In Canada, public housing, more commonly known as community housing, operates in a similar way to the U.S., with programmes managed at the municipal or provincial level. Likewise, the tenant pays a certain percentage of their income towards rent, and this is known as rent-geared-to-income (RGI). Subsidisation may be provided at a federal, provincial, or municipal level.  

Some community housing providers provide so-called supportive housing. In collaboration with other community organisations, providers support individuals with addictions, disabilities, or mental health needs, as well as women fleeing violence, among other groups.  

There are also non-profit organisations that operate social housing units. In some cases, these organisations manage government assets, while others manage their own. Finally, Canada offers cooperative housing, where residents are members of a co-op association. They don’t own their units but have a say in the management of the building and its policies. Rent in co-ops can be subsidised for those who qualify, making it affordable for low to moderate-income members. 

Current Challenges 

Canada’s current housing crisis is worse than that of the US. Record population increases and skyrocketing prices (for renting and buying) are key contributing factors. Social housing construction is not adequately funded and has not kept up with demand; in addition, many tenants also face sub-standard living conditions.  

In fact, 1.5 million households in the country were in core housing need in 2021 i.e., living in housing that’s ‘unsuitable, inadequate or unaffordable’ and unable to afford other housing options in their community.   

Trudeau recently announced plans to implement a post-World War Two strategy in order to speed up development. This involves using pre-approved designs so that units can be constructed quickly, at a lower cost. He also intends to convert more public buildings into housing.   

Social Housing in the European Union 

While practices vary widely across member states, some common themes and principles emerge across the EU: 

  • Mixed models: Many EU member states have adopted mixed models for social housing, combining public and non-profit organisations’ efforts.  
  • Income-based rent: Across the EU, social housing often involves income-based rent, ensuring that households pay an affordable portion of their income toward housing costs. 
  • Quality and standards: EU member states generally emphasise quality standards for social housing, focusing on energy efficiency, safety, and accessibility. 
  • Tenant protections: Tenant rights and protections are often robust in EU social housing systems, offering security of tenure and safeguards against eviction. 
  • Limited availability: Like in the UK and US, many EU countries face challenges related to the availability of affordable housing units, leading to long waiting lists in some regions. 

A 2023 report from the European Foundation for the Improvement of Living and Working Conditions reveals several key findings, including the following:  

  • Around 75% of EU Member States have schemes in place to offer housing (often shared) to homeless people (in some cases, only if they engage with services). However, not many of these programmes are able to house more than 1% of the respective country’s homeless population.  
  • Both states with the most and least social housing have waiting lists. In some countries, entitlement is only checked once, while in others, it is checked periodically. Checks are carried out after individuals find housing and if their income increases, they will either have to pay a higher amount towards the rent or leave social housing.  
  • In all Member States, individuals in the lower 50% of the income distribution are more satisfied with their local area than with their home itself. One of the most common problems is poor energy efficiency; however, significant funding is provided to improve the energy efficiency of homes in order to protect tenants from future price increases.  
  • The proportion of households that receive rent subsidies are highest in France (21%), the Netherlands (18%), and Finland (14). In Belgium, Cyprus, Estonia, Lithuania and Romania, the rates are below 2%.   

(It’s interesting to note that, despite challenges throughout Europe, a new analysis has actually shown that homes in England are in the worst condition of all European countries, with 15% below the required quality standards. In addition, 11.3 million people in the country spend more than 40% of their income on housing, which is more than in any other European country.)  

Conclusion 

Social housing is a vital component of housing policy worldwide, aiming to provide affordable and stable housing for individuals and families in need. The approaches to social housing differ somewhat between the countries we’ve discussed, but each region faces similar challenges regarding availability, affordability, and maintenance.  

With the current regulatory and economic challenges, the last thing developers need is inefficient processes slowing them down. At SDS, we provide a range of software solutions for social housing development, streamlining processes in land valuation, viability, and project management. We also provide consultancy services. For more information or to book a demo, contact us today.