Housing Allowance Research Articles

The effectiveness of selected housing subsidies in the Czech Republic

The goal of this article is to evaluate the effectiveness of the new housing policy in the Czech Republic as an example of a transitional society after the collapse of communism. The first part provides a brief history of the housing policy dating back to 1918. The second part presents the results of empirical tests of effectiveness (or equity) of selected housing subsidies applied during the transition. As in other transitional countries, the considerable decrease in the financial affordability of housing after 1989 demanded an active housing policy. Housing subsidies, whether direct or implicit, were, however, often not well targeted. The economic subsidy from rent regulation, tax relief and housing allowances are especially assessed here.

A Review of “Housing Allowances in Comparative Perspective”

A Review of “Housing Allowances in Comparative Perspective”

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.

The Effects of Housing Allowance Benefit Levels on Recipient Duration: Evidence from the Swedish 1997 Reform

How the duration of housing allowance spells varies with the generosity of the housing allowance system carries important policy implications. In 1997, the Swedish housing allowance system implemented a drastic reform which substantially affected claimants who were couples with children in terms of their financial incentives to utilise housing allowance benefits. However, at the same time, the 1997 reform largely left single-parent claimants unaffected. Exploiting the quasi-experimental feature of this reform, this paper analyses the impacts of benefit shrinkage on couple-with-children recipients' exit hazards using the DD (difference-in-difference) estimation strategy. Careful attention is given to measuring interaction effects appropriately in non-linear models. The findings in this paper suggest that the 1997 reform led to a sharp increase in the leaving speed of the recipients in the `couples with children' category.

Drivers of Rising Housing Allowance Claimant Numbers: Evidence from the Irish Private Rented Sector

Recent years have seen growing concern among policy makers about difficulties in controlling the numbers of claimants and cost of housing allowances, which are now the main state housing support for low-income households in most Western European countries. This issue has raised particular concerns in the Republic of Ireland where the numbers of claimants of rent supplement, the principal state housing support for unemployed private renting households, have climbed steadily since the 1980s despite a marked concurrent reduction in unemployment rates. This paper attempts to explain this conundrum using administrative data on all claimants in 2005 and 2004. It reveals that although the traditional drivers of demand for this benefit—rising unemployment and lone-parent families—have become less significant in recent years, they have been replaced by a new driver, rising immigration. In addition, labour market activation measures have proved counterproductive. They have incentivised part-time, rather than full-time, work and consequent continued dependence on rent supplement.

Ministerial Tax Issues: On Wingo and a Prayer

Special tax provisions apply to individuals who qualify as “ministers.” For example, they are allowed to exclude certain housing allowances from gross income and are exempt from federal tax withholdings. Most ministers are classified as employees, yet courts have also held some of them to be independent contractors. Minister-employees have a dual tax status. They are considered employees for income reporting, fringe benefit, and expense deducting purposes but are treated as self-employed persons for social security purposes. Because of their intricacies and material financial impact, special provisions that apply to ministers demand thorough legal analysis and careful tax planning. This article analyzes several key tax issues that confront ministers and provides a variety of tax planning ideas.

The Uneven Geography of Housing Allowance Claims in Ireland: Administrative, Financial and Social Implications

Abstract This article employs administrative data on claimants of rent supplement—the principal housing allowance for private renting households in the Republic of Ireland—to examine spatial variations in the numbers of claimants, the cost of this benefit and the characteristics of claimant households both within and between different regions. It reveals that these spatial variations illuminate some of the reasons for the unexpectedly high growth in both the numbers of claimants and the cost of rent supplement over the last decade. This geographical analysis casts doubts on several of the key supposed benefits of using housing allowances, rather than capital grant aid for social housing provision, to cater for the accommodation needs of low-income households. It reveals that, due to uneven claimant geography, the costs of the former are just as difficult to control as the latter. Moreover, housing allowances do not necessarily afford claimants greater consumer choice. As a result of funding constraints an...

Socio-Economic Research on Housing in the Czech Republic

The article presents a review of the research activities of the Socio- Economics of Housing research team. The Socio-economics of Housing team is one of the research teams at the Institute of Sociology of the Academy of Sci- ences of the Czech Republic. The main research activities of the team include sociological research concerning attitudes towards housing in the Czech Re- public, international comparisons of housing policies and social housing sys- tems, and econometric simulations of policy reforms, like rent deregulation, the introduction of housing allowance and social housing, housing fi nance, housing market effi ciency, and house price indices.

The Dynamics of Housing Allowance Claims in Sweden: A Discrete-Time Hazard Analysis

This paper analyses the dynamics of the duration of housing allowance claims in Sweden during the period 1991 to 2002. The central concern in this paper is whether the Swedish housing allowance system creates dependence on welfare. Using longitudinal data from Swedish micro database-LINDA, this paper found that there is no evidence of negative duration dependence arising from the duration of housing allowance claims. This finding is consistent across different model specifications and various controls of the heterogeneity issue. Hence we come to the conclusion that a recipient's exit rate from the system does not decrease over the duration claim. This paper also shows that the demographic characteristics, educational background, labour market status and economic contextual conditions play important roles in determining recipients' conditional probability of exiting from the housing allowance system. However, there are substantial variations in the factors' impact across different household types.

Housing Allowances and Economic Efficiency

AbstractHousing allowances aim to make rental housing affordable for the recipients. Whether affordability for tenants is achieved in an economically efficient way is the question that is discussed in this essay. Three aspects of efficiency are focused on: disincentives to work, over‐consumption of housing and horizontal inefficiency. These topics are tackled through a discussion that focuses mainly on the principles, but also on some of the outcomes, of the means‐tested housing allowance systems in six Western countries: Belgium, Germany, the Netherlands, the United Kingdom, the United States and Sweden. Conclusions concern the apparent unimportance of the poverty trap or the unemployment trap specifically for rental housing, the concept of notional rent used to tackle over‐consumption, and the frequent existence of some form of horizontal inefficiency.

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...

The Rental Letter of Housing Minister Dekker: Too Early and Too Complicated

ABSTRACT In the Netherlands 95 per cent of all rents are regulated. The Housing Minister announced in her Rental Letter of November 2004 that this would be reduced to 75 per cent. At the same time she wants the housing associations to contribute €250 million a year to the increasing public expenditure on housing allowances and she wants the social and commercial landlords to invest more in new rented accommodations. This paper describes the content and background of the Rental Letter and analyses its policy proposals. It deals with the debates between the Housing Minister and parliament on rent policy and it indicates the pros and cons of the Rental Letter. We conclude that, as a result of the Rental Letter and some additional policy developments, the Dutch social rented sector (with a current market share of 36 per cent) is now under fire.

The Dynamics of Housing Allowance Claims in Sweden: A Discrete Time-Hazard Analysis

ABSTRACT This paper analyses the dynamics of the duration of housing allowance claims in Sweden during the period 1991 to 2002. The central concern in this paper is whether the Swedish housing allowance system creates dependence on welfare. Using longitudinal data from Swedish micro-database LINDA, this paper found that there is no evidence of negative duration dependence arising from the duration of housing allowance claims. This finding is consistent across different model specifications and various controls of the heterogeneity issue. Hence we come to the conclusion that a recipient's exit rate from the system does not decrease over the duration claim. This paper also shows that the demographic characteristics, educational background, labour market status and economic contextual conditions play important roles in determining recipients' conditional probability of exiting from the housing allowance system. However, there are substantial variations in the factors' impact across different household types.

Housing Benefit: Great Britain in Comparative Perspective

Britain has a relatively unusual housing allowance scheme compared with those in many other countries. It is also one that has experienced many problems and attracted much criticism. the Labour Government is currently introducing a radical reform of the scheme, which aims to tackle its many problems. the purpose of this article is to consider the British scheme and its planned replacement in comparative perspective. It is argued that, although the new scheme will tackle some of the design faults of the current scheme, other difficulties will be left untouched and important problems with the administration of housing benefit will therefore remain. the new scheme will also be unusual by comparison with housing allowances in other countries, but in a different way from the scheme it is due to replace.

Direct Subsidies and Housing Affordability in Australian Private Rental Markets

Many countries have undergone a broad retreat from the use of indirect (supply) subsidies to meet low-income housing-affordability problems, shifting to direct subsidies often linked to means-tested income-maintenance systems. Although the reasons for this change of direction are well documented, the efficacy of direct housing subsidies in terms of tackling affordability remains in question. The authors examine in detail one such system, Australia's Rent Assistance (RA) programme, making use of a microsimulation model of the Australian housing market linked to a model of the social security system. It is found that there is considerable targeting error because many low-income renters are ineligible for direct subsidies. It is also found that RA is relatively ineffective in overcoming affordability problems in high housing cost areas of Australia. Although RA does not of itself contribute much to poverty-trap problems, it may deter unemployed households from moving to areas where job vacancies exist. The authors conclude that future comparative work could usefully analyse the distributional and behavioural impacts of different forms of housing allowances. Moreover, alternative policies could be recalibrated within the microsimulation model in order to examine the first-round impacts of policy design change.

Redistributing Wealth to Families

This study aims to shed light on the main characteristics of the French system for redistributing wealth to families through tax revenues and social transfers. For the purposes of this exercise, the authors used the MYRIADE microsimulation model, which covers most of the redistribution system, though it is limited to monetary flows such as family benefits, housing allowances, minimum social welfare payments, income tax, and tax on furnished accommodation. The authors used a particular methodology to highlight the way this redistribution works; rather than calculate the difference between each family's disposable income and their gross primary income, they opted to isolate the variation in disposable income that could be attributed to the youngest member of each family where there is at least one child under the age of 25. The average increase in disposable income that this child contributes to his or her family amounts to in200 per month.

Workforce Disincentive Effects of Housing Allowances and Public Housing for Low Income Households in Australia

There is emerging interest in whether, and how, different types of rental housing assistance contribute to disincentives to entering paid work or working more hours. Using Australia as an example, the article compares the theoretical effects of housing allowances and public housing in terms of work disincentives. It also reports on empirical research that examined how households perceive such disincentives and the degree to which they affect decision making about paid employment, based on a survey of 400 public and private renters searching for paid work in Sydney and Melbourne. The research found that most households understood how their rental housing assistance would change when moving into work, and that this had little effect on private renters in receipt of housing allowances but did affect a sizeable minority of public renters. Job seekers identified the main difficulties in getting a job as age discrimination by employers, lack of personal skills and self-confidence, and location of housing relative to jobs. This highlights the importance of assessing the locational outcomes for households of different types of rental housing assistance, including housing allowances. 1

The Duration of Housing Allowance Claims and Labour Market Disincentives: The Norwegian Case

Housing allowances in Norway are meant to enable low-income households to increase, or maintain, their housing consumption. In order to identify low-income households and to ensure a desirable vertical equity, the allowances decrease as income rises. The marginal withdrawal of housing allowances as income increases is quite high. Interacting with the tax system this might potentially produce a dependency culture and a depressing effect on the supply of labour.A dependency culture would yield long spells as recipients of housing allowances. This paper demonstrates that this is not the case for single parents and families with children. Around 30 per cent of the receivers from these groups drop out of the system every year. Furthermore the hazards (probability of dropping out) seem to be independent of the length of the claim.

Housing Allowances: Finding a Balance Between Social Justice and Market Incentives

Safeguarding the affordability of, and thereby access to, housing is a key issue in housing policies across Europe. Housing allowance schemes have become a more important tool in pursuit of this aim in many countries during the past few decades. This themed issue reports on developments and dilemmas concerning housing allowance schemes in five countries.