A link between municipal spending on housing and other factors explaining housing conditions in a country

Abstract

Housing policy has been for years pronounced as an important field for urban development. However, cities are rather reluctant to join in, explaining their position mainly by financial scarcity and low competence. This however does have social implications on life of the citizens. The aim of this study is to conduct a basic prove of a link between proportion of municipal spending on Housing and other factors explaining Housing conditions in a country. In other words, the goal of this brief study is to analyse what aspects of housing may be linked with the level of municipal spending on Housing and how. To do so, data about 21 countries from OECD Housing Database have been used for basic quantitative analyses (correlation matrices and linear regressions). The outputs suggest that the level of municipal spending on Housing is positively linked with the proportion of national budget designated for Housing and the GDP level of the country. It has also been found that housing costs of people, who have a mortgage, are higher in places, where municipal budget expenditure is on a higher level. Finally, the results indicate, that where proportion of municipal budget spending on Housing is higher, there the construction of new dwellings is slower and the relative expenditure of households on Housing is lower. Although the results may have interesting value for policy makers, they need to be proved by a further analysis. This study is only a brief baseline for further analysis, because of low number of observations and because further factors related to housing may need to be added.