Affordable Housing Crisis: Global Challenges and Policy Interventions in OECD Countries

Across the OECD nations, people are grappling with an increasingly challenging landscape of affordability for housing. Housing prices have seen a notable rise since pre-pandemic levels, albeit with some recent easing during the COVID-19 period. High borrowing costs now make homeownership unattnable for many and exacerbate difficulties for renters too. The overarching challenge is particularly acute for those who struggle financially, including youth, families with children, seniors, and vulnerable individuals experiencing homelessness.

Policy intervention is required to address this persistent crisis, especially in tackling homelessness across OECD countries, while also ensuring the collection of better data on housing issues. Social rental housing plays a pivotal role as an essential component of affordable solutions. Financial mechanisms such as revolving funds can effectively support the expansion of affordable and social housing units.

The context illustrates that real house prices have experienced significant growth over the last decade, with average increases surpassing 40. Prices escalated more drastically during the onset of the pandemic, but subsequent declines since early 2022 show prices remn well above pre-pandemic levels. Cross-country variations are notable; countries like Canada, Chile, Estonia, Iceland, Israel, Luxembourg, New Zealand, and Turkiye have witnessed growth over this period exceeding 75. In contrast, Belgium, France, Korea, and Poland recorded increases under 14, with only Finland, Spn, Greece, and Italy seeing a decline in real house prices.

The burden of housing costs is substantial for low-income households. On average, one out of every three households struggling financially are grappling with overburdened housing costssping more than 40 of their income on rent alone. In specific countries like Colombia, Chile, Costa Rica, Spn, and the United States, this figure exceeds half for these households.

For homeowners with mortgages, nearly one in four low-income households are also considered overburdened by housing costs on average. Rates vary significantly across countries; in Chile, Colombia, Costa Rica, Finland, Greece, Spn, Sweden, and the US, it's been reported that more than 40 of mortgage-holding low-income households struggle with the cost of housing. Conversely, rates as low as below 10 have been noted for France, Lithuania, and the Netherlands.

Investment in public housing has seen a decline over the last two decades across OECD countriesparticularly since its peak in 2009. Total public investment in housing and community amenities, encompassing direct investment areas like development and community development as well as water supply and street lighting, fell almost by half between 2009 and 2016. Investment specifically in housing development plummeted by nearly 90 over the same period. Yet since 2016, public investment in housing has begun to grow slowly despite remning below its peak. Between 2016 and 2021, total public investment increased approximately 40.

We encourage you to explore our comprehensive dataset for a detled understanding of access to affordable and quality housing across countries.

References:

OECD Affordable Housing Database

Access the data here
This article is reproduced from: https://www.oecd.org/en/topics/sub-issues/affordable-housing.html

Please indicate when reprinting from: https://www.ao39.com/Rental_housing_prices/Affordable_Housing_Crisis_Data_Explorer.html