Policy Instruments that Support Housing Supply: Social Housing

Abstract

Housing markets in the advanced economies tend to undersupply housing affordable by lower-income households. The provision of social housing has been one major way in which governments have intervened in order to redress this expression of market failure. Housing policy interventions may be broadly divided into demand-side policies that direct subsidies to lower-income and multiply disadvantaged households and supply-side subsidies that provide incentives for housing providers to supply housing to target groups at below-market rents. Governments in most countries intervene in a range of ways, notably through fiscal instruments, regulation, and land supply. Over the past 20–30 years many countries have moved to emphasise demand-side policies more and to rely on provision by regulated nonprofit housing associations rather than local or state governments. Private investors have increasingly been attracted to social housing provision.