Housing Allowance Program Research Articles

Generation rent on the housing treadmill: A study on South Korea's housing allowance programmes and recurring precarity

AbstractGiven the ongoing economic crisis and the increase in housing prices, many young adults —known as “generation rent”—use a large portion of their wages for rent and cannot buy a house. In South Korea, generation rent in lower income brackets are particularly vulnerable to overlapping precarities as housing inequality worsens. In response, South Korean local governments have offered housing allowance programmes since 2019, but studies on the impact of housing allowance on young adults are scant. This article examines how and to what extent housing allowance for young adults relieves precarity through a grounded theory approach. Eighteen young adults who benefit from the programme participated in in‐depth interviews. Results show that after living independently, participants experienced multidimensional precarity: housing, financial, professional and social support exclusion. To alleviate their precarity, they applied for a housing allowance programme, thereby experiencing changes. Although their precarity was reduced, it was not entirely allayed because of the programme's short duration, which kept them stuck on the “housing treadmill.”

Effect of Housing Support Programs on Residential Satisfaction and the Housing Cost Burden: Analysis of the Effect of Housing Support Programs in Korea Based on Household Attributes

Korea is implementing housing support programs such as public rental housing and housing allowances to improve the housing welfare of low-income households. In this study, we empirically analyzed the effects of the public rental housing program and the housing allowance program on residential satisfaction and the housing cost burden of policy beneficiaries. In accordance with household attributes, we analyzed how the status of using these programs affected each group’s residential satisfaction and housing cost burden. We used the data from the 2020 Korea Housing Survey conducted by the Ministry of Land, Infrastructure and Transport. We examined the housing support programs’ effects on each of the following household groups: all households, one-person households, households of newlywed couples, young adult households, and households of the elderly. The status of residing in public rental housing positively affected the residential satisfaction among all households, one-person households, and households of the elderly. It reduced the housing cost burden for all household types. The status of receiving the housing allowance negatively affected the residential satisfaction for all households and increased the housing cost burden for young adult households. We present policy implications for future housing support programs based on the findings.

Housing Allowance and the Rent of Low-income Households

This paper analyses the effect of a housing allowance programme on the rent paid by assisted low-income households. The data consist of 12,000 rental households in the free-market and municipal sectors. The effect is estimated using the programme reform of 2002 as an instrument. The reform increased the allowance of the assisted households depending on housing characteristics, but it had little effect on the eligibility. Results suggest that in the private sector, one additional euro of allowance increases the rent of claimants by 60–70 cents. The effect is zero in the municipal sector, as rents are tied to the housing costs.

Housing, energy cost, and the poor: Counteracting effects in Germany's housing allowance program

Adequate housing and affordable warmth are essential human needs, the lack of which may seriously harm people's health. Germany provides an allowance to low-income households, covering the housing as well as the space heating cost, to protect people from the consequences of poor housing conditions and fuel poverty. In order to limit public expenditures, payment recipients are required to choose low-cost dwellings, with the consequence that they probably occupy flats with a poor thermal performance. Recipients might therefore exhibit a lower per-square meter rent but in turn are likely to have a higher energy consumption and energy expenditures. Using a large data set of German households, this paper demonstrates that this financially counteracting effect is of negligible magnitude.

Housing, Energy Cost, and the Poor: Counteracting Effects in Germany's Housing Allowance Program

Adequate housing and affordable warmth are essential human needs, the lack of which may seriously harm people's health. Germany provides an allowance to low-income households, covering the housing as well as the space heating cost, to protect people from the consequences of poor housing conditions and fuel poverty. In order to limit public expenditures, payment recipients are required to choose low-cost dwellings, with the consequence that they probably occupy flats with a poor thermal performance. Recipients are thus likely to have a higher energy consumption and energy expenditures. Using a large data set of German households, this paper demonstrates that this counteracting effect is of negligible magnitude. Yet, from an ecological perspective, the allowance scheme creates distorted incentives and should be reformed.

Housing, Energy Cost and the Poor - Counteracting Effects in Germany’s Housing Allowance Program

Adequate housing and affordable warmth are essential human needs, the lack of which may seriously harm people's health. Germany provides an allowance to low-income households, covering the housing as well as the space heating cost, to protect people from the consequences of poor housing conditions and fuel poverty. In order to limit public expenditures, payment recipients are required to choose low-cost dwellings, with the consequence that they probably occupy flats with a poor thermal performance. Recipients are thus likely to have a higher energy consumption and energy expenditures. Using a large data set of German households, this paper demonstrates that this counteracting effect is of negligible magnitude. Yet, from an ecological perspective, the allowance scheme creates distorted incentives and should be reformed.

Politics and the implementation of public policy: The case of the US military housing allowance program

Are bureaucracies in fact controlled by the president, Congress, or legislation? We analyze a 1998 policy change in the Department of Defense’s (DoD) $6.5 billion annual military housing allowance program. Results show that both the president and Congress were able to influence the bureaucracy, even in the presence of an exceedingly specific law that outlined the manner in which the DoD was to allocate the funds. After policy implementation, allowances were disproportionately higher in locations that (a) supported the president in the 1996 election and (b) were represented by members of the House or Senate Armed Services Committees.

Targeting Housing Allowances in Russia

Abstract This analysis addresses the coverage and targeting performance of Russia's housing allowance programme, a programme characterized by very substantial decentralization in programme administration. Coverage in the five sample cities is generally low. Targeting of benefits in these cities – measured either by the distribution of participants or benefits by income quintile – is very strong, comparing favorably with the record of social assistance programmes in many countries. Importantly, targeting is found to depend significantly on local programme administration. Moreover, local economic conditions are found to be highly correlated with programme generosity and administrative practices: comparatively prosperous cities fund allowance more generously and have administrative practices that encourage participation of low income households in particular. This is occurring even though most funding for allowances now comes from regional governments. A general conclusion is the importance of including loca...

HOUSING POLICY ISSUES IN A RICH COUNTRY WITH HIGH POPULATION GROWTH: THE CASE OF RIYADH, SAUDI ARABIA

Riyadh is a dynamic city characterized by extremely rapid growth over the past quarter of a century. Nevertheless, its housing stock is generally of high quality. This article explores the city's current and future housing issues. It does so in the context of projecting Riyadh's housing needs, both physical units and corresponding investment, over the 20‐year period beginning in 2004. The analysis was carried out using the Housing Needs Assessment Model developed by the Urban Institute and applied in a number of countries. The results show that the great majority of Riyadh's residents will continue to have very favorable housing conditions. Still, several percent of all households (more than 50 000 in the middle of the projection period) will face housing affordability problems. We argue for implementation of a rental housing allowance program to address this issue. Additionally, it is an open question as to whether the Kingdom of Saudi Arabia will be able to continue to provide housing consistent with the aspirations of middle class families. The analysis pays particular attention to the presence of a large number of guest workers and of the practice of employer‐provided housing.

Housing vouchers in the United States, great Britain, and the Netherlands: Current issues and future perspectives

We compare the current U.S. housing voucher program with the British housing benefit and the Dutch housing allowance programs. After presenting the theory behind income‐related housing support, which underpins both the U.S. and European systems, we compare the three programs with respect to their scope (the budgeted versus the entitlement approach), the relationship between housing support and rent levels, the poverty trap, moral hazards, and administrative problems. The United States can learn from Great Britain and the Netherlands that a full entitlement program can best promote equity, but given the present political and economic climate, it is unlikely that Congress will adopt such a program anytime soon. Great Britain and the Netherlands can learn from the United States how to design a more efficient tenant subsidy program, one that provides incentives to find less expensive units and promotes family self‐sufficiency through enhanced job‐seeking behavior.

Participation in a decentralised housing allowance programme in a transition economy

When Russia's housing allowance programme, the country's first means‐tested programme, was introduced in 1994, it was truly innovative. However, there were difficulties from the start, many arising from the division of authority for setting programme parameters among different levels of government and the potential for variation in the treatment of similar households in different cities. In 1996, the programme's original simple basis for benefit determination was seriously impaired by the introduction of different principles for very low‐income households. Moreover, local governments have exhibited a willingness to vary benefits from year‐to‐year, depending on political and budgetary considerations. The analysis presented here documents the impact of these variations on participation rates in a sample of Russian cities. Large inequities are obviously present in the treatment of similar households from city to city. Indeed, it is questionable whether the programme as currently configured is fulfilling the social safety net function envisioned for it in the original legislation.

Administrative Practices in Russia's Housing Allowance Programme

Implementation of housing allowances is an integral part of Russia's programme of systematic rent increases on state and municipal rental units which began in 1994. Because housing allowances constitute the country's first income-tested programme, its performance transcends the housing sector. Rents are being increased in steps to cover full operating costs by the middle of the current decade. Primary administrative responsibility for the programme rests at the local level. Since the rate at which rents increase is determined by each municipality, progress varies. Arguably, the quality of the programme's administration may influence acceptance of both the programme and broader economic and political reforms. Reported here are the results of a first-time assessment of the practices of local housing allowances offices (HAOs) who administer the programme. Field work included on-site reviews at 17 HAOs and analysis of about 1200 files of programme beneficiaries. For administrative practices covering such areas as the presence of written job descriptions, written guidelines for intake workers, generation of reports for higher-level authorities and setting standards for the routine review of files of applicants determined to be eligible for benefits, applicants rejected and time during which processing of approved cases should be completed, HAOs had a fair record. Generally, 2-4 of the studied offices failed the standards set out in the paper. However, frequent instances of incomplete record-keeping about HAO operations limit our conclusions and highlight an area definitely needing improvement. On the other hand, and important for programme credibility, errors in computing subsidies paid to beneficiaries were found to be universally very low. Overall, HAO performance is adequate but highly variable and improvements are clearly needed. The results can be interpreted as being consistent with HAO staff acceptance of housing allowances as a legitimate replacement for the previous broad entitlement to benefits that worked through controlled rents in state housing. The adequate operation of HAOs should work to strengthen popular support of broader economic and political reforms.

Administrative Practices in Russia's Housing Allowance Programme

Administrative Practices in Russia's Housing Allowance Programme

Needs-based Targeting without Knowing Household Incomes: How Would it Work in Russia?

Proxy means tests are often suggested for use in countries where tighter targeting of benefits of social programmes are desired but verification of household incomes is difficult. This paper reports on simulations of the use of two types of proxy means test in determining eligibility for Russia's housing allowance programme and the payments which eligible households would receive. Based on 1995 and 1996 survey data, tests are reported for three cities: Vladimir, Moscow and Gorodetz. The results consistently show that the proxy procedures introduce substantial errors into who is admitted to the programme. Most disturbing is the large share of eligible households who would be denied benefits using the first proxy (predicted income used for eligibility determination)—10-30 per cent. The average benefit loss for the poorest quintile of households falsely denied benefits is equivalent to about 20 per cent of their incomes. Under the alternative procedure based on demographic characteristics, errors are smaller than under the first procedure for pensioners and large families but much greater for lone mothers. But even for the first two groups, undercoverage runs at about 15 per cent. On balance, these results suggest that very great caution should be used in proposing proxy income tests of the type analysed here in the countries of the former Soviet bloc for means-tested programmes in general.

Monitoring Russia's Experience with Housing Allowances

The implementation of housing allowances is an integral part of Russia's programme of systematic rent increases on state and municipal rental units which began in 1994. Because housing allowances constitute the country's first income-tested programme, its performance transcends the housing sector. Rents are being increased in steps to cover full operating costs by the beginning of the next century. The first increases were modest in real terms, and a housing allowance programme was to be operational in each city when rents rose. This paper reports the results of an initial assessment of the programme in two cities. The assessment focuses on the extent to which income-eligible households know about the programme, their participation rates and their experience in becoming recipients. Survey results show quite low but increasing participation rates and knowledge about the programme. While both are in part explainable by the low average benefit levels at this stage in the programme of rent increases, they also clearly call for greater effort by local and national administrations to inform the population.

Social Housing Versus Housing Allowances: Choosing Between Two Forms of Housing Subsidy at the Local Level

Abstract Analysis of the policy choice between social housing and housing allowances has been obscured by the older housing policy debate between proponents of supply subsidies and proponents of demand subsidies. Social housing uses capital grants both to reduce monthly housing costs to below-market rates and to take existing or newly constructed housing out of the market, so that ownership is nonprofit and use is allocated according to need rather than ability to pay. Housing allowances, on the other hand, enable poor tenants to pay market rents for housing. During the past 15 years, even as housing allowances became the dominant mode of Federal assistance, social housing programs grew at the local level. Comparison of model social housing and housing allowance programs by the number of people helped over time, effects on economic integration, and program stability suggests that the choice between these programs depends primarily on alternative expectations for the future. The most active local constitue...

Housing Allowances, Nonprofit Housing, and Cost-Effective Program Choice

This paper analyses whether a housing allowance program or a nonprofit housing program is more cost effective, i.e., requires a smaller government subsidy for identical quality dwelling units and identical rents charged to tenants. In most cases, we show that the programs are equally costly for the government′s housing department. If private-sector real estate is favourably treated under income tax law, however, a housing allowance will be more cost effective for the housing department; likewise, if nonprofit housing is exempt from certain sales taxes, nonprofit housing will be the more cost-effective program. Nevertheless, after recognizing the foregone tax revenues, the two programs will again be equally costly for the government′s housing and treasury departments together. Still, a housing allowance is shown to be more cost effective if the private sector is more efficient in developing, building, or managing housing, and a nonprofit program is shown to be more cost effective if it receives donated inputs or if nonprofit enterprise is an efficient response to imperfect information.

Horizontal equity and the redistributive impact of housing allowance—Programs in Sweden and Norway

Horizontal equity and the redistributive impact of housing allowance—Programs in Sweden and Norway

The Survey of Income and Program Participation as a Source of Migration Data

Panel surveys are a natural source of information on migration and residential mobility. The blossoming of panel surveys during the 1970s which includes several surveys conducted as part of evaluation components of the Income Maintenance Experiments and Experimental Housing Allowance Programs has yet to produce a commensurate expansion of migration research. The US Bureau of the Census has recently initiated the Survey of Income and Program Participation (SIPP) designed to improve US statistics on the distribution of income and wealth and participation in government programs. SIPP panels collect data for 2 1/2-year periods from a minimum of 12000 households making them ideal for geographical mobility research. Utilization of panel surveys for migration research during the 1970s and the potential contribution of SIPP during the 1980s are discussed. (authors)

Sources of inefficiency in subsidized housing programs: A comparison of U.S. and German experience

Many developed countries include some mix of housing programs oriented toward either demand-side (consumer) or supply-side (producer) subsidies. Demand-side programs take the form of rent or housing allowances of various types, some of which are characterized by direct cash payments to program beneficiaries, while supply-side programs focus on either new construction or rehabilitation with a multitude of subsidy elements which cover both capital and operating costs. Debates over the efficacy of demand-side and supply-side subsidy programs are common in countries with a mix of housing subsidy mechanisms. Such debates have emphasized a number of differences in demand-side and supply-side programs. Major arguments in favor of demand-side subsidies are that they allegedly are less costly than supply-side subsidies, permit greater freedom of choice in housing and neighborhoods, are more equitable in that they permit more widespread participation among eligible populations, are more efficient in that they make better use of the existing stock of housing, and are more flexible for program administrators in that they can be easily turned on and off in response to changing needs and priorities. Arguments against such subsidies are that they allegedly result in little or no real housing improvement, fail to stimulate the supply of new housing, and drive up housing prices. In the U.S., many of these alleged advantages and disadvantages have been investigated through a series of social experiments such as the Experimental Housing Allowance Program (EHAP) and rigorous evaluations of major subsidized housing programs.’ More recently international comparisons of program outcomes have been permitted as a result of development