The credit crunch and subsidized low-income housing: the UK and US experience compared

Abstract

This paper examines how the mortgage crisis and subsequent recession have affected subsidized rental housing in the United Kingdom and the United States. These two nations approach the housing needs of low-income households in very different ways and to very different degrees. In the UK, non-profit housing associations are pivotal to the production and management of affordable rental housing; in the US, the affordable housing system revolves mostly around a single program, the Low-Income Housing Tax Credit. Yet the crisis destabilized key parts of both countries’ subsidy systems and raised important questions about their sustainability in the future. The UK responded sooner and arguably more effectively than the US to the crisis. However, over the longer term, the prospects for affordable housing development are likely to be more difficult in the UK than in the US.