It’s difficult to sustain a social housing program, but it’s even harder to build one from scratch. Housing Europe, a coalition of social, public, and cooperative housing providers, is trying to do both. Sorcha Edwards, who serves as Secretary General of Housing Europe, joins us to share their efforts to expand the footprint of non-profit and limited-profit housing across the continent — maintaining established programs like those in Austria and Finland, and growing them in places like Spain, where only about 1% of housing units are rented social housing. We also discuss the International Social Housing Festival, happening this year in Barcelona on June 7-9, and the lessons and inspiration that can be drawn from practitioners around the globe.
It’s difficult to sustain a social housing program, but it’s even harder to build one from scratch. Housing Europe, a coalition of social, public, and cooperative housing providers, is trying to do both. Sorcha Edwards, who serves as Secretary General of Housing Europe, joins us to share their efforts to expand the footprint of non-profit and limited-profit housing across the continent — maintaining established programs like those in Austria and Finland, and growing them in places like Spain, where only about 1% of housing units are rented social housing. We also discuss the International Social Housing Festival, happening this year in Barcelona on June 7-9, and the lessons and inspiration that can be drawn from practitioners around the globe.
Shane Phillips 0:04
Hello, this is the UCLA housing Voice podcast, and I'm your host, Shane Phillips. This is a special episode with Sorcha Edwards, Secretary General of housing Europe. Since I do a bit more explanation than usual in the interview section of the episode and my voice is off from a cold. I'll skip right ahead to that. But first, as always, the Housing Voice podcast is a production of the UCLA Lewis Center for Regional Policy Studies with production support from Claudia Bustamante, Jason Sutedja, Divine Mutoni, and Phoebe Bruce. You can email me at Shanephillips@ucla.edu with any questions or comments, and be sure to tell your friends about the show if you're a fan. Now let's get to our conversation with Sorcha Edwards.
Sorcha Edwards is Secretary General of Housing Europe, and she's joining us today to talk about her organization's work across the continent, and especially its efforts to help build up social, public and cooperative housing programs in European countries that don't already have mature systems like those found in places like Austria and Finland. Sorcha, we are very excited to have you on the show, all the way from Brussels, welcome to the Housing Voice podcast.
Sorcha Edwards 1:19
Thank you very much. I'm really happy to be here too.
And Paavo is our co-host with the most European-sounding name, welcome!
Paavo Monkkonen 1:28
Thanks, Shane. It's great to be here. Sorcha, thank you so much for joining us, I'm looking forward to this conversation.
Sorcha Edwards 1:33
Yeah, me too, and nice to meet you both.
Shane Phillips 1:36
We start each episode with a short urban tour from our guests usually have their hometown or wherever they live now. Sorcha, what city did you pick, and what do you want to show us from there?
Sorcha Edwards 1:46
So I'm originally from Dublin in Ireland but I've been living in Brussels, the capital of Europe, for over 15 years. I decided to pick Brussels for a quick tour. When I am thinking about this, I was thinking of a recent joke from Trevor Noah, I recently saw him in a stand up here in Brussels. And he said it was the first city he's been to where the moment he asked people what he should visit, he was told to go to another city, "You like it here? You should go to Bruges, oh, you should check out Ghent or you should go to Paris". And then when he asked people what do you do like when you want to have a good time in here in Brussels, what do you guys do? "Yeah, we get the train to Paris". But yeah but actually it's a more understated capital than a lot of the ones we would conventionally think about when we think about attractive cities but it there's a lot going on here too. And I think if I were to pick a couple of places that really should be visited if you're here, I would think of Matonge so it's a district right near our offices, near the Housing Europe offices, so just to situate yourself, we're just two streets from the European Parliament so where the members of European Parliament sit; they have two seats, one in France and one in Belgium, and their seat is just behind us here, a couple of streets. But just in the other direction, a few streets from here, you have Matange, which it has a bit of a dark past because it's linked with the colonization of Congo by King Leopold II of Belgium however now it's a really vibrant neighborhood, and full of cafes and bars, and now as spring is finally here, we start to see people out on the street and a lot of food stories with locals, you know, yuca (and) typical vegetables that are used in Congo. So it's really unmissable if you come to Brussels.
Shane Phillips 3:47
This is like a particularly useful tour because it sounds like if we were to go to Brussels and ask someone for some guidance, we would not receive anything useful so thank you for that. So this is a special episode and an exception to our usual format, where we interview a housing researcher about a specific study or book that they published. And we're doing this for several reasons. First, and most importantly, is that in June, I will be attending the International Social Housing Festival in Barcelona, which I am very, very excited for, and we wanted to do a few episodes before the event that relate to social housing. Second, is that we don't often get the opportunity to interview the Secretary General of anything so we really could not pass up on this opportunity. And the last reason is that our previous episodes on social housing have focused really on lessons from places with well-established social and public housing programs, and one of the takeaways from those interviews was that while sustaining a large stock of social housing is certainly a challenge, building a program from scratch is much harder. Most of our listeners live in countries with very limited social or public housing stocks so we think it's important to hear from folks who are trying to not just maintain or improve existing programs, but really also build them from the ground up. I don't think there are many people who have thought about that challenge more than the Secretary-General here so we are eager to hear from her about what she's learned, the work housing Europe is doing and how the Social Housing Festival and other efforts fit into those plans. So Housing Europe was established in 1988, and it is really quite massive in scale. It's a network of 46 national and regional federations which include about 43,000, public, social, and cooperative housing providers in 25 countries who together manage around 25 million homes. Sorcha, what is Housing Europe's mission, and why was it created?
Sorcha Edwards 5:44
Yeah, I think you've raised one point that I would like actually to comment about because you talk about emerging systems and established systems, and how difficult it is, how challenging it is to build up a system. And just to add to that, how easy it is to undermine and destroy an existing system with the wrong legislation. Because we have plenty of examples, unfortunately, you make a wrong, might not be considered wrong by the policymakers in power but you make a change in the financing, you introduce the right to buy, you change the taxation, you change the allocation criteria, and it might take a decade or so but you can very quickly also undermine an existing system.
Shane Phillips 6:30
Yeah, multiple decades worth of work building that up.
Sorcha Edwards 6:33
Yeah exactly, and then it can be undermined quite quickly as well. So I think this is also part of our role, as you say our role is to support the establishment of system, but it's also very much to act as a guardian of the existing system, promote the existing systems as well, actually, the nitty gritty work of being the guardian, as I said, is actually what we do on a day to day basis, and it's really advocacy. So it's checking, what are the different legislation or funding mechanisms that are being proposed here from European level? What would their impact be on the existing systems for also policymakers who want to build up a system and where there's a constant relay of information between the organizations on the ground if those organizations don't exist then between the ministries and between the European institutions here. So when I say European institutions, I mean, European Commission, the functionaries or the civil servants who are running the EU, I mean, the European Parliament, as I said, which is just here behind us so they are public representatives or also the European Council, which is when the member states come and meet to negotiate positions on new legislation.
Shane Phillips 7:46
That is useful context. So really most of your work is at that sort of super national level, it's not so much with individual countries but more so with the Commission... the EU-wide organizations?
Sorcha Edwards 8:02
Yeah, but actually, it's funny that you say that, Shane, because this is why the organization was established 35 years ago. So there was a push to have an internal market at the European level, and there was a clear political recognition that an internal market to work, you'd also need affordable housing and social housing would be an important part of that. So we were established to bring the voice of those organizations into the policymaking circles here in the EU but increasingly, as the whole dynamics of housing changed, and obviously, we're facing such different realities now to what we were facing 35 years ago, when I'm sure many of us remember, our parents were even with one person working were easily able to afford them home ownership, we're no longer in that situation. We're facing a lot of different challenges. We're more and more working actually with member states we call them soar with at a national level, because many cities or countries just don't know which way to turn now. So they realize that their housing systems are not fit for purpose, they're not catering for current and definitely future needs so increasingly, we also take on this role of supporting the sharing practice on how to set up a housing system, even just explaining what is housing system, because particularly in Central Eastern Europe with their move away from Soviet Union, we go back to the breakdown of the Soviet Union, basically, the message they got was the market will take care of it - not only in housing, obviously, but across the board. So there was a step away from public intervention in housing, and now many of those countries are saying, "Well, actually, we sold off the public housing stock we had, now there's a massive issue about maintenance, but also new household can't find anywhere to live in our cities because a lot of the flats are being rented out on a short term lending or investors have coming in, and bought out the choices/ properties. So they're also saying, "okay, where do we start; where do we start on setting up a new housing system, where do we start on tackling this lack of affordable housing?" So we've not truly fallen into that role of not only working on, as you say, the sort of pan-macro level working with these sort of far away legislation but more and more, we're on the system side. A big part of our work is also on pushing innovation, because even the top system, so you've mentioned, Austria and Denmark, but even the top systems are not ready for the challenges we face in terms of climate change - so higher temperatures, risk of flooding but also the human dimension so migration; they're not ready for the migration that is coming now because of instability in the other countries, but also climate change-driven migration but they're also not ready for aging population, and trends like more and more single-person households. Our infrastructure was established, most of it was built at a very different time, none of the systems are really ready for the challenges we face and for it to deliver a built environment, particularly homes, that are fit for purpose when we look at climate issues, demographic issues, so we work on a number of projects that are really highlighting who is pushing the frontiers in terms of circular construction, who is pushing the frontiers and trying to ensure people live in a dignified way into their old age in their home, who is pushing the frontiers in terms of optimal use of the existing built environment - right sizing of homes, for instance, so we're constantly looking at that innovation aspect as well.
Shane Phillips 11:40
So as you said, Housing Europe has been around for 35 years. Now, before we get into more detail on the modern day work that you're doing, are there any past accomplishments that on behalf of the organization you're especially proud that Housing Europe was involved in?
Sorcha Edwards 11:54
I suppose what's interesting is the fact that then the EU is increasingly recognizing the role that housing can play in reaching bigger societal goals, we've been granted a project; we're running an initiative for the European Commission, with the Affordable Housing Initiative, which is really a reference point for a fair, green transition,. There has been a sort of a recognition that actually we can't have a green transition if it's not fair, if we don't ensure affordability - that has been recognized at the highest level within the European Commission. They have realized that actually, we are making that happen, so this sector is making that happen. They are renovating homes while maintaining affordability, they are introducing renewable energy, bringing down people's energy costs. So they are transforming districts around the territory, which will be fit for purpose, (and) climate-proof, and they are doing that on a limited profit basis in the public interest. And finally, we are on the radar of the EU, and they've asked us to run this affordable housing initiative so that this sector can actually show how to do it - how this can actually be done, how we can marry the goals of environmental sustainability with social sustainability. So I think this is a huge achievement, at the moment, it's just a two-year project running on a million euros so it's very small start but it's a real accomplishment.
Shane Phillips 13:22
Yeah, it's interesting, just hearing about the acknowledgement of the European Commission at the Pan European level, because we're experiencing the same thing here in the US as well, where this has been a local issue for many decades, even state governments haven't really been all that involved in it. They've taken a very strong kind of leadership role over the past several years, at least in many states, and increasingly, the federal government now is starting to get involved in seeing that, like, we can't just let this be something that every individual city or even every individual state tries to manage on its own. So how about more current efforts, what are some of the major efforts that your organization is engaged in?
Sorcha Edwards 14:06
I think what takes up a lot of our time is indeed this advocacy piece. So really ensuring that any sort of legislation that comes out of from European level is going to support the sector so this takes up a lot of time. It's one of the main sort of issues that keeps us busy. I think the festival that we'll probably talk a little bit more about later on, this is also I think, really showing hope for the future because it is something that started off quite small in Amsterdam, really against all expectations, (and) has now been repeated in four cities and has taken on really a much bigger dimension.
Shane Phillips 14:48
I feel like part of your success is calling it a festival instead of a conference. I think that might be drawing a little more attention.
Sorcha Edwards 14:54
Yeah, I think maybe you could be right. And I think, we tried to say it's like a festival but it's also a movement or even a protest but it's a protest sort of complaining about what's not working, it's really focused on showing what is possible.
Shane Phillips 15:10
And then what about your role there as Secretary General, is it as glamorous as it sounds? What did you do before joining Housing Europe as well?
Sorcha Edwards 15:19
So I've actually been with the organization for over 15 years, I started here maybe three or four years after I finished my Masters in European studies in Leuven - it's one of the oldest universities in Europe, briefly working on the management of aid programs to the former Soviet Union, actually, where the EU was supporting reform and reinforcement of infrastructure in that region. Then I was working, actually informing Irish policymakers and Irish students about the European Union, so arranging and organizing ample programs, so training programs for politicians who wants to understand how the EU was impacting Ireland, and students who were also studying European European policy. So then I came at quite an early stage after my studies to housing Europe, CECODHAS at the time, and working first on communications, we were only two people at the time, and then going into working on EU funded projects so really focused on the climate transition. And then yes, promoted to this role not that long ago and busy with being the Secretary-General.
Shane Phillips 16:30
So getting into the work and the kind of housing that Housing Europe is focused on, the three housing types that you focus on are social housing, public housing, and cooperative housing, how do you define or make distinctions between those three? I think co-op housing is a particularly unfamiliar concept here in the US where we don't really have coops outside of New York City, and I'm not sure that those have a whole lot in common with European coops.
Sorcha Edwards 16:55
Yeah, I think it's really important to raise that term actually. And this whole issue around how we describe the type of housing, it's actually becoming more and more controversial because we're using the English language here. So up until 2014, we translated all of our activities into German and French. Now, we primarily use English, and we see also within the European institutions, quite an extensive use of the English language. However, if you actually chat with people from Denmark, from Germany, from countries with a strong housing system, they're happy to talk about social housing. But actually, when you dig down and look at their legislation, they don't use the term. And very often they're using a term like general housing, housing for the public, maybe it's difficult to translate literally - housing for the common good. And actually, I think the use of the term 'social housing' because it's, let's say English language clearly, and because England over the last decades coming from a country with previously very strong support for social public housing, those policies have been undermined and defunded to a large extent, and also stigmatized as a result of that. So there's a period where you had a big sell-off residual isolation and the favoring of the of private sector. And actually, when we use the term social housing, we also we're transporting that baggage with it in some cases, to countries where actually they don't have the same history or the same perception. But yeah, there's a debate, should we stop using the term or should we reinforce it, should we say "Should we bring social back into housing? Should we be proud to be social again' but there's no doubt about that It's a tricky term. Co-op, yes, you rightly point out there are different interpretations, but actually, we've recently done a study, even within the EU, they're radically different and what we see what we call co-op housing in Spain is very different to what we actually call it in Switzerland, or in Germany, or in Sweden. So you have different types of cooperatives. You have a building cooperative where it's only a cooperative during the building process, people save up for their home in a cooperative building savings account, once they own that home, there is no longer any link to the cooperative. You have rental rights of use cooperatives, such as those in Switzerland and Germany. The Swedish model of housing is based on a cooperative which continues to manage the building however, the individual units can be sold on the market. So you have radically different understandings but what is actually very interesting now is you have new coops starting up, in for example Spain, that are adopting the Swiss or German model so the right of use rental cooperatives, and actually that is extremely unusual because we are so used to talking about each country having their own housing practices, own housing traditions, very difficult to change historical paths, and what we are seeing now is really encouraging and maybe the festival has something to do with that. We see this cross-border or exchange of best practices not just staying in PowerPoint or staying in the conference rooms, but actually being turned into real projects. It's really inspiring, and the co-op, I think, okay, it means different things to different people but it is proving to be a good vehicle for groups to try to address their own housing problems. So groups can come together to form a cooperative, and we are seeing now as I said, in Spain, new legislation in place to support the establishment of different types of cooperatives to the one they're used to. And it's not to say one type is better than another. I mean, this is not what housing Europe is about. It's not really about dictating exactly how each housing system should be, should be run but we definitely vouch for it for the fact that you looked like a forest where you needed diverse types of trees to flourish. And in housing, you also need critical masses of different types, (and) different tenures of housing for it to be a healthy, you want to say the word market but in healthy....
Shane Phillips 20:55
ecosystem...
Sorcha Edwards 20:56
housing ecosystem!
Paavo Monkkonen 20:57
Yeah, there you go. That's so interesting. I was wondering if we can dwell, as an academic, I have to dwell in the definitional thicket a little bit more. In Europe, in general, social housing is conceived of as rental, as I understand, but in a lot of the rest of the world, people talk about social housing that's either subsidized by the government and then owned by individuals or even built by the government and then owned by individuals. I wonder if there are social housing systems that you would consider social housing or Housing Europe would consider social housing that are ownership based?
Sorcha Edwards 21:27
Yeah, I think again, it's why the term is so tricky, some people often say we should talk about social housing systems - so systems that promote inclusion and affordability, as opposed to social housing as a label on a particular home. But definitely, we see access to affordable ownership always being a part of the mix in almost all of the countries where we have members. While often we have the same organizations promoting affordable access to home ownership, the same organization is also delivering social rental housing. And we also see actually a really nice import, speaking of export-import of ideas, so the community land trust model, and I'm sure you'll hear more about that when we go to the the international social housing festival. So, it has been adopted quite successfully here in Brussels. Indeed, as you know, the Community Land Trust doesn't actually dictate the tenure but in the model so far in Brussels, they have opted for affordable home ownership, which has to stay affordable in perpetuity, as you know. So the house cannot be sold at market rates, there's certain conditions are tied to that. So here in Brussels we see the CLT model is also growing in popularity in France with quite a few cities, including Lille, take note, (and) also adopting this approach- so homeownership but taking out the speculative factor by delinking the value of the land from the property. So yes, I think affordable homeownership is a part (of the housing ecosystem) in many countries but yes, ideally, there should be some some strings attached like we see with them with the CLT model, we also saw and we've actually study on that, the scale of social housing. So there has been not only in England, but examples of different schemes whereby people can purchase their own homes, to varying degrees in different systems, generally speaking, it has been detrimental. So it really ends up being a leak of public money from the system leaving cities and governments with nowhere to house people or less homes to house people in need. But as I say, as an organization, we wouldn't say that access to homeownership shouldn't form a part of a healthy social housing policy, it's just about the balance and the outcomes.
Paavo Monkkonen 23:44
Yeah, I wonder what what you think about the idea. I mean, so one thing I emphasize in my class on housing policy is how much government policy supports owner-occupied housing in the United States through different kinds of indirect subsidies. But we don't think about the single-family home as social housing, but probably we should, right? I mean, it's not social in the aspirational sense but in the subsidized by the government sense. I wonder whether you do any work, I mean I know to varying degrees, European countries are supporting owner occupancy and ownership housing, do you do any work on trying to remove the bias towards homeownership?
Sorcha Edwards 24:20
So there we would team up the International Union of Tenants to work indeed for the so-called tenure-neutral policy, and to highlight indeed, the amount of public expenditure that is actually going to support homeownership, which, as you say, is very under-publicized. I think what's more critical is the amount of public money which is going to pay private landlords. I just saw a study in England again, it's over 1.2 billion annually that's been paid to private landlords to supply social housing that is not meeting decent standards. So this is more I think one of the issues where we weren't growing awareness, it's just not good value for for taxpayers money.
Shane Phillips 25:05
They're not like reinvesting that money into building more social housing somewhere else.
Sorcha Edwards 25:09
Exactly. Again, housing systems program, crucial part of any most healthy housing system., but when things get completely out of balance, and this is when we need some correction.
Shane Phillips 25:19
This is a good transition actually. I'm curious to hear what your organization's relationship is to the market rate housing or the for-profit side of the industry, particularly on development. I think I can kind of guess where the relationship is on the landlord side a little easier but do you find opportunities for partnership? Or is it kind of more live and let live, you do your thing, I do mine, or can it be adversarial in some ways,
Sorcha Edwards 25:47
Indeed, many of the organizations we work with, so cooperatives. they would even consider themselves private players. So they might not be profit driven players, but they considee themselves private. Also, you've got housing associations in the Netherlands in the UK that also are under private law, we try not to make such a strong distinction around that. But in terms of purely commercial entities, I think one of our former chairs made the statement, for those who are building the cities with us, we can work together, the issue is entities that are merely focused on very short term profit extraction, where the goal is to have long-term affordable housing and are being undermined - that's where there's an issue. However, we see excellent collaboration where you have quotas. So for every new development, for instance, in Denmark and France, the UK and Ireland, we have a certain percentage, which should be social housing. And depending on how those schemes are managed, they can prove to be very successful. So you do see some good collaborations in that sense. Then, in terms of adversarial there have been some issues but going back a little bit in the history actually, the Swedish case that Paavo referred to, you have an interest from commercial entities to access public subsidies to save us from the affordable housing challenge. And that could potentially be adversarial because if commercial entities are receiving subsidies, but they're not asked to stick to the same conditions, as the other providers, what we have is really not a level playing field. You do have issues around that when it comes to state aid competition law, where I think it's important for policymakers to have a clearer picture of what the interests are,
Paavo Monkkonen 27:34
Does the EU legislation still prevent social housing providers that are open to higher income households are open kind of in a more universal manner to all of society from benefiting from state subsidies? I understand that in the Netherlands, this was a big problem where there was an anti-competition claim by the private housing developers to limit the ability of social housing associations to be open to all income levels.
Sorcha Edwards 27:59
So this is an ongoing conversation. I think the current Commissioner Vestager has clearly recognized the importance of social mix and neighborhoods. We see more political support for our mission, there is still a requirement or social housing in the European text is linked to disadvantaged groups. So there's room for interpretation by national lawmakers however, there's also the space for national lawmakers who perhaps are not so keen on developing a broader program to use that potentially as a reason not to.
Shane Phillips 28:39
So Housing Europe is the organizer of the International Social Housing Festival, the first of which, as you mentioned, was in Amsterdam in 2017. What was the genesis of that or what inspired you or your organization to create ISFH, and to get a little bit more into details here, what are you trying to accomplish or what has been accomplished with these convenings?
Sorcha Edwards 29:02
Yeah, I think we said earlier, it's very different to the classic conference or seminar. It's a celebration. It's a festival. It's celebrating what works. So it's an opportunity to step away from maybe our standard modus operandi is, is really stressing - what are the challenges on the ground, what difficulties, what new financing tools are needed? And the festival is an opportunity to say, "wow, this is happening, this project has been built, this new model is is really working". So it's really a change in the approach so instead of that defensive advocacy, which obviously is 100% needed, it's turning the tables a little bit and saying, "look, this is actually working and we should celebrate this" but the origins actually came from Amsterdam, and from some international students doing a Master's, they're linked to the Het Schip Social Housing Museum and individual, together with a group of students at Pepperdine actually still involved now, still guiding us in the production of the next edition, and those students, they came from all over the world, and they were just so impressed by the Dutch system. And it was so foreign to many of them, they were coming from Asia, from South America, from the US, and they couldn't understand why there wasn't just a party in the street every day about this system, because they just found it, it was so different and positive compared to their experience. So it actually came from there when I say so it's really a grassroots beginning, then there was no concrete plan to follow that up. And there were representatives from Lyon there, and they thought, "Well, we also have really something to show". In Lyon, they have amazing regeneration of districts where they've managed to maintain mixed communities, different types of housing, different income levels, we really want to show it but at the same time, we have growing homelessness, we have house prices that are really going through rising rapidly so we would like to also, you know, bring this political momentum. And then Helsinki was similar, they they really wanted to show what they done to bring down homelessness, but at the same time show over 100-year year system that continues to deliver affordable housing, first for such a long period, and now we're looking to Barcelona making huge efforts to ensure that local families, students can actually stay living in their city and are not pushed out.
Shane Phillips 31:27
Yeah, it sounds like every city at some level is sort of interested in at the same time, kind of showcasing what they think they're doing right and what they're proud of, but also bringing people from around, you know, around the continent, (and) around the world in to give feedback and ideas for what else they could do to address the problems that they're seeing. I think that's a good transition to talking about Barcelona a little bit here, and why it's being held in Barcelona in 2023. I've been in contact with some folks working in and around the Barcelona city government over the last year or two, in part through my book. And I know, they're very interested there and learning from other parts of the world, in part because Spain has a very limited social and public housing sector that they want to be involved in building up. Could you say a little bit about maybe both sides of that what Barcelona is, and the folks in Barcelona are excited to share about what they're doing, and also some of the priorities you've heard from them about what they're hoping to to learn from others?
Sorcha Edwards 32:28
Yes, I think the challenges that Barcelona face are shared with many cities, particularly cities in the south of Europe that have very low proportions, as you say, as you rightly say, 22% of social housing. So you have a very small buffer, actually, to protect citizens against international investment. So this has produced dynamics, which are really pushing communities out of their city. Obviously, Barcelona is a very attractive tourist destination, attractive also for international investment not only tourism but in all sectors. What is happening is that you have a Disneylandification of many capital cities where you don't see children, you don't see families anymore; school Class numbers are reducing, and actually that can be traced down to the price of properties. And then it causes you to ask the question, who are the cities changing for; they're not changing for the local communities, for the lifeblood of the cities. Barcelona has been extremely inspiring. In the four or five years we've been working together with the team working, who are supporting other callout, I've never seen a team being so active just scanning okay, what is going on in other countries and other cities, what are the tools we can use - they reviewed all the possible levers, everything from reinforcing public supply, (and) bringing in new limited profit entities modeled on those which are already active in Austria in the UK, so other types of housing associations foreign to the typical Spanish historical path. They're also enabling their local energy by putting legislation in place to foster new Community land Trusts, new types of right-of-use cooperatives. They're also, and of course, this is controversial because they're really recognizing the need to intervene in the market, and this is not always, you know, popular. You're always going to have adversaries to that because some people are maybe not going to make as much profit as they might have done normally. So they're really intervening in the market and where a property is for sale in a certain area of the city, this proportion has to be offered for sale back to the city first, they're also buying up empty properties for use by the city.
Shane Phillips 34:55
Yeah, I've heard that if you have a unit that's been vacant for too too long, they'll sort of find you at first, or somehow try to penalize you, but if it stays vacant, they will take ownership of it eventually.
Sorcha Edwards 35:06
We're seeing more and more action be taken also in Portugal and all this type of challenge, it's too much of a contradiction when you have a housing crisis, and you have a lot of empty housing sitting there so yes, it's a common issue. In many areas with different policy measures being taken; Barcelona is one of those. And of course, they're trying to figure out a way to bring in politically acceptable rent regulation as well, which is also very tough.
Shane Phillips 35:31
So Spain devotes very few public resources to housing at least on the rental side, and that has left the country with a very limited social and public housing stock. According to your 2021 State of Housing in the EU report, only about 290,000 homes in Spain are rental social housing, and that's just over 1%. I did some research ahead of the festival and learn that Spain's homeownership rate is over 80%, which is well above every other country in Central and Western Europe, as well as the US and Canada, which mostly have homeownership rates between 50 and 70% - the exception of Germany, Austria and Denmark, which are actually in the 40s. I wrote a short blog post for the festival website, which we'll put in the show notes, which is really just arguing that this emphasis on homeownership has some pretty serious negative consequences, and that we saw that in things like the housing price bubble that Spain experienced in the lead up to the global financial crisis, since at least the Franco dictatorship promoting homeownership seems to have been really the center of Spanish housing policy or a really core part of it, at least. And I'm sure you agree here that there's a need for balance with more rental housing, really, of all kinds, but they are so far off. Again, I think the homeownership rate right now is around 80 to 84%, in that range, how do they get from where they're at today to a more balanced housing market, just with more rentals generally, but with a really sizable significant social and public housing sector in particular? What is the game plan?
Sorcha Edwards 37:05
This is the million dollar question. I think there are two key pillars of fair housing system, really one of them is around land governance - this is encouraging, incentivizing, enforcing housing land policies that do incentivize the delivery of social and affordable housing. This has to be a key pillar for any country that really wants to build up their stock. As far as possible, also policy consensus, cross-party policy consensus, and a clear plan. This is something really interesting that I saw recently in Spain, you have plots, so empty plots around the city, and when there's a certain party in government, those plots remain empty for four years, and then the government changes, you start to see plots being developed. Whereas in other countries, you do manage have this cross-party political incentive that actually having affordable housing is also good for society, good for the economy, good for schools, good across the board, using it only as a vehicle for profiteers to extract profit eventually is just unsustainable. Again, for schools, for companies, for society, for cities, for students, this political consensus, and having a long-term plan is really crucial so that then you can have the pillars on this land policy pillar. It's a long-term policy that needs to be in place to really ensure that when it's decided that a piece of land is going to be used, that we consider the option of using it to boost the supply of housing then alternatives, so finance is another obviously one of the pillars, ensuring that you have sources of finance that are patient, you know, that are happy to work over 30 years with, you know, two 3% return on investment. And if you don't have that on the private market, think about funds, bring the sources of finance, property tax, for instance, into those funds, or they do in France, it's a percentage of income tax, and also, people's savings accounts were used to fund the social housing so having those alternative non-cyclical supplies of finance,
Shane Phillips 39:19
I saw Paavo nodding along like he was getting echoes of this central provident fund and that kind of thing.....
Paavo Monkkonen 39:26
Yeah, Livre Art!!! No, well, the French one is really exciting. I think that's something that California as a state could explore, where you have this Tax Free Savings Account that everyone can invest in. Shane, you should be excited about it with your renter equity goals, right? Because then it's like everyone's investing in this savings account, and then you benefit as an individual but the money is used for social housing production. So it seems like a win win. Yeah.
Sorcha Edwards 39:49
Yeah, I think it was Napoleon or someone who came up with it in front so it's been working for a while, or his grandson...
Paavo Monkkonen 39:55
Good ideas can come from bad people. I wonder, what do you think about the postwar German model of these like 30-year covenanted social housing getting built by middle-class individuals or invested in by middle-class individuals. I think is another interesting like democratization of the social housing production kind of model. I wonder whether that's what do you think about that one?
Sorcha Edwards 40:20
And yeah, unfortunately, the 30 years are up, right.
Paavo Monkkonen 40:23
And they stopped doing it, right. I mean, I think if you had continued to do it, it could, it could work. But if you stop, if you stopped the flow of new social housing, then it gets more difficult.
Sorcha Edwards 40:32
Yeah, and a lot of countries are actually because you have this sort of squeezed middle, a lot of countries, we do see looking at bringing in commercial providers to build that social housing, where that will be socializing for a limited amount of time. But yeah, of course, you have, what happens when you get to the end of that time if there hasn't been a replacement, I think, actually, Barcelona again, has actually figured out a model; because the public companies can't really deliver enough to the scale that's needed so they have established use or limited profit entities so they are public private partnerships, in a way. Actually, after 90 years, the housing goes back to the city so it's the other way around.
Shane Phillips 41:14
We're already kind of on this question but I just want to pose it directly and have us expand on it a little bit more, looking at some of the more established social housing programs across Europe or beyond, what do you see as some of the best practices, whether that is on funding and financing side land acquisition and ownership, development, rehabilitation, or otherwise, what are some of the practices that you see out there that you're hoping to expand to more cities or countries?
Sorcha Edwards 41:41
So I think we've already touched on one of them, indeed, and that's the Livre Art model in France, I think it's really inspiring, because it has worked for such a long time. And if we even think of the potential of using people's savings, which are anyway in the bank for the public good, and where the savers themselves also benefit. I think these win-win type of approaches, we're definitely trying to promote.
Shane Phillips 42:08
How much do you know about this program? Are there more details you can share that you think might be of interest to our audience. We haven't really talked about it, except maybe briefly touching on it in our Singapore public housing episode.
Sorcha Edwards 42:19
I've seen some PowerPoint slides on and it's not uncomplicated, (some of the) busiest PowerPoint slides I've ever seen in my life. There are some complexities.
Paavo Monkkonen 42:30
It is a little mysterious, like how big the subsidy needs to be to make that system function, I think there's a question there. But anything that gets everybody invested in the system, I think, is a politically good idea.
Sorcha Edwards 42:42
That's a really good point, and it's also the last time I heard the mayor of Vienna speak, this is exactly it because they use a part of the income tax, and the fact that the Limited Profit Housing, they're also actually a type of cooperative in Vienna even though when you look at actual legal such as the German, everyone is aware that this housing is not only, let's say, for the very, very lowest income, but that they at some point in their life might benefit from it, or their son or daughter might benefit from it. It's actually much more politically acceptable. They don't mind paying their taxes into something that is good quality, and that they might use at some point.
Paavo Monkkonen 43:19
I mean, I think one of the challenges in countries without a strong social safety net and without a good pension system or something to take care of people in their old age, you know, that's where you get investment, and homeownership being really important for security as you age. I wonder what you think about how these kinds of places like United States can create some kind of virtuous cycle of social housing reduction.
Sorcha Edwards 43:41
When you don't have a clear, strong pension system, it's definitely a challenge. And we see even very established systems now as the population is aging, they're also looking at new ways to approach that.
Paavo Monkkonen 43:54
Yeah. I mean, I think it's just a fundamental challenge to building a system without a welfare state that supporting people and even in like you said, even in places where there is a welfare state, once you have some investment and homeownership, people are kind of increasingly rely(ing) on that to build equity.
Shane Phillips 44:11
Maybe just to broaden the question as like, are there places that you have seen that don't have these established public housing or social housing programs that are making really impressive progress ramping things up, or maybe even places that do have existing programs, but have branched out into trying, you know, totally different new things to sort of, again, balance out their market and offer different kinds of housing choices to people.
Sorcha Edwards 44:36
One inspiring project I was lucky enough to visit recently was an intergenerational, public housing provision they had in the city of Alicante in Spain, they had some public housing, which was dedicated only to very elderly people in need of care. They realized that actually, we're actually passing away and the atmosphere was so negative obviously, and they've developed an intergenerational project. They're not very many that I've heard of it in, some in Scandinavia as well in the coops, where you have a certain proportion of the flats in the development, which are reserved for people who are under 35. There are quite a lot of activities organized by the residents themselves to do social activities to maintain the sense of community and very inspiring, and actually now being replicated in the same city, and I think inspiring other examples. So I think we're going to start to see this type of development in other countries because of the levels of isolation and loneliness, particularly among elderly people. But in this respect, it's not particularly innovative in that in the financing on the financing side, because it's finance. So the rents would be extremely low, they will be limited to people who don't have another property who are on the low income, they would be quite affordable, even when you're just receiving a state pension. But they managed to, to deliver that project also, actually, together with so it's linked to a care center. So some of them are parking. So there's some car parking. So some of the revenue generated from renting out of the car park was actually used to co-subsidize. So you're seeing sort of some types of clever ideas, helping to finance the development.
Shane Phillips 46:24
That's been an interest of mine for a while, and part of why I've been thinking about this is sort of more targeted toward middle-income, rental housing, shared equity shared ownership model, in part just because it feels like here in California, we're spending $500,000, a unit on subsidized housing, and you look at like, well, how much are we going to be able to actually build at those prices, and it's not a lot - never going to meet the need even if we get a lot of federal support, we're not going to get the like trillions of dollars it would take. (So) been thinking a lot about what can we do that complements those subsidies in ways that are a little more affordable, a little more balanced in their benefits between like the owners and the renters for housing types that don't require these massive subsidies. Again, not to replace them, but just to do more where it's not just like this small share of the market is the subsidized housing we're building, and then all the rest is pretty much market rate and for profit, and really nothing in between.
Sorcha Edwards 47:25
Yeah, but this is exactly the point. So and it's something called the cost rental model, I don't know if you've come across that....
Shane Phillips 47:31
Is this sort of like the Vienna Limited-profit Housing Association model?
Sorcha Edwards 47:36
indeed, so this does actually answer your question so it's another example of a country parting from their historical path (and in) this case, it's Ireland, and they have been inspired by the sort of the Dutch-Danish approach, and they're developing cost rental model inspired by those. So if cost rental, you don't call it social, or nonprofit, so it doesn't come with any baggage and a stigma so very pragmatic, you are cutting out the profit because you're basically charging the rent based on what it costs to build. You are not aiming at the lowest income, you're aiming at those who are excluded from the housing market, which actually means most people, you know, because prices are so out of reach. So you're aiming up those who are not eligible for the current restrictions of social housing, but you are, you're hopefully building up a self-sustaining system.
Shane Phillips 48:27
So the social housing festival is happening in Barcelona, June 7 to June 9, what else do you want our listeners to know about what's happening there, what you're excited about, who's going to be there, and any way that they can participate assuming that they are not able to attend themselves?
Sorcha Edwards 48:45
Yeah, of course, ideally, really, city of Barcelona will be happy to welcome as many people there in person because they've arranged every afternoon on those days, they've arranged study visits to the different inspiring projects around the city. So I think that's a big (opportunity) if it's at all possible to actually be there in person. But of course, they recognize that there are climate considerations, financial considerations, so not everybody is going to be lucky enough to be there. So quite a few of the sessions will be streamed, and my colleagues and others will also be delivering live blog so you will be able to get really shortly after each of the events, the essence of what was discussed and the key points that were made. There will also be you know, follow-up articles and you will be able to get without being there in person, the online coverage is really going to try and enable as many people as possible to learn from the event. What's really exciting from us is that we already seeing people from over 60 countries, from our side we see also social providers, (and) housing providers have already signed up from Spain obviously, and Ireland, Germany, Italy, Portugal, Netherlands and Norway. Also crucially, International Union of Tenants so for me, I think one of the main challenges we face globally when it comes to housing is tenants' rights and the fact that tenants are becoming a second class citizens. People are valued based on homeownership, and I think there's more to life than homeownership, and so the interest of union of tenants, they're going to be coming from Germany, Sweden, even Argentina. See, we're really happy to hear that we've got from the HUD, so the US Department of Housing and Urban Development, Adrianne Todman, also the Deputy Mayor of Bologna, a counselor from Lisbon, Vice Chancellor of housing from Basque Country, and Secretary of Housing from Bogota. So what's nice is we've got obviously, we're going to have activists, the people who are trying to make a difference on the ground, also got, you know, the ones who are in power, that's really encouraging because it shows that they also want to learn and see that they can learn and be inspired, and maybe bring some of the ideas home. So that's quite exciting that we will be mingling together between activists, banks, policymakers, socializing providers, and politicians,
Shane Phillips 51:15
That all sounds amazing. I am very excited. I also suppose I could tell people to follow my Twitter account, because I'm sure I will have commentary throughout as well as I'm going to be visiting Paris and Amsterdam and Utrecht for the first time and will have pictures and things I imagine from all of those places, too. So Sorcha Edwards, thank you again so much for joining us on the Housing Voice podcast, and I guess I will see you in a couple of months.
Sorcha Edwards 51:41
I'm looking forward to it, and I'm just sorry, we don't have more time to talk. It's been really nice exchanging with you guys.
Shane Phillips 51:51
You can read more about Sorcha and Housing Europe's work on our website; lewis.ucla.edu. Show Notes and a transcript of the interview are there too. The UCLA Lewis Center is on Facebook and Twitter. I'm on Twitter at Shane D Phillips, and Paavo is at Elpaavo. Thanks for listening, we'll see you next time.a