ABSTRACT
This chapter surveys international changes in housing provision over the past decade and is stimulated by four major concerns.
Policy makers believe that they are pursuing the right course by reducing housing subsidies and intervention. This is factually inaccurate – subsidies have been redistributed not reduced. It also ignores the strong arguments for state involvement in housing, even in market-led systems.
Insufficient regard is being paid to institutional change and uncertainty in the current era. Interest in institutions is only aroused when they fail to achieve policy objectives.
Compared to the ‘golden age’ era of the 1950s and 1960s, housing markets have become less stable but the implications of greater volatility are unclear. We want to identify here some of the serious consequences for households, housing costs and housing supply; ones which, we feel, justify state action to ameliorate market failure.
It is easy to justify cutbacks in state involvement in housing by blaming the need to reduce public expenditure in order to conform to Maastricht and monetary union criteria. It is similarly easy to explain housing changes in the same way. EU convergence factors are important (Ball and Grilli 1997) but here we will stress longer processes that have been generating structural change in European housing provision. To this end, considerable reference will be made to the USA, with its very different housing market traditions, in order to highlight in a comparative way some underlying themes that are helping to create the housing dilemmas faced by Europe today.
