Subsidizing the Supply of Rental Housing

Abstract

Chapter 11 discusses subsidies to the supply of rental housing. The traditional approach has been to subsidise first local authorities and then housing associations to produce additional social housing. Later the emphasis shifted to introducing private finance and recycling past subsidy to provide a range of affordable housing products. Additionally, the planning system was modified to make it possible to require the provision of affordable housing on residential development sites. Allocation principles have also changed, moving away from accommodating lower-income working households to emphasising provision for vulnerable households of all types. Here we examine the impact of changing financing mechanisms on the capacity to add to the housing stock; the types of provision; and the rents that are charged across the country. We also consider the impact of Right to Buy and other approaches to transferring accommodation between tenures. Finally, we look to comparable international experience.