Bogdanenko A. Review of affordable housing programs in Ukraine, Great Britain and Europe // Electronic scientific publication "Public Administration and National Security". — 2019. — №4. https://doi.org/10.25313/2617-572X-2019-4-5219
Соціальна і гуманітарна політика
UDC 332.83
Bogdanenko Anatoliy
PhD in Public Administration, Doctor of Science in Economics,
Associate Professor of Public Administration
Interregional Academy of Personnel Management
Богданенко Анатолій Іванович
доктор філософії в галузі державного управління, доктор економічних наук,
доцент кафедри публічного адміністрування
Міжрегіональна Академія управління персоналом
Богданенко Анатолий Иванович
доктор философии в отрасли государственного управления, доктор экономических наук,
доцент кафедры публичного администрирования
Межрегиональная Академия управления персоналом
ORCID: 0000-0003-0758-5809
REVIEW OF AFFORDABLE HOUSING PROGRAMS IN UKRAINE, GREAT BRITAIN AND EUROPE
ОГЛЯД ПРОГРАМ ДОСТУПНОГО ЖИТЛА В УКРАЇНІ, ВЕЛИКОБРИТАНІЇ ТА ЄВРОПІ
ОБЗОР ПРОГРАММ ДОСТУПНОГО ЖИЛЬЯ В УКРАИНЕ, ВЕЛИКОБРИТАНИИ И ЕВРОПЕ
Summary. The article deals with the mechanisms of state regulation of affordable housing programs in Ukraine, Great Britain and some European countries. The state of social housing market is analyzed. Steps are taken to improve the mechanisms of state regulation of affordable housing programs in Ukraine, Great Britain and Europe.
The concept of social housing is reviewed as a way of ensuring the citizens of the country with housing, which may be owned and managed by the state, by non-profit organizations, or by a combination of the two, usually with the aim of providing affordable housing.
Affordable housing is determined as a housing which is deemed affordable to those with a median household income as rated by the national government or a local government by a recognized housing affordability index.
It is noted that income is the primary factor - not price and availability, that determines housing affordability. In a market economy the distribution of income is the key determinant of the quantity and quality of housing obtained. Therefore, understanding affordable housing challenges requires understanding trends and disparities in income and wealth. Housing is often the single biggest expenditure of low and middle income families. For low and middle income families, their house is also the greatest source of wealth.
In the article are described the terms and conditions of participation in the actual affordable housing programs in several countries.
It was concluded that the policy makers at global, national, regional, municipal, community associations levels are attempting to respond to the issue of affordable housing, a highly complex crisis of global proportions, with a great number of policy instruments. These responses range from stop-gap financing tools to long-term intergovernmental infrastructural changes. Affordable housing needs can be addressed through public policy instruments that focus on the demand side of the market, programs that help households reach financial benchmarks that make housing affordable. This can include approaches that simply promote economic growth in general - in the hope that a stronger economy, higher employment rates, and higher wages will increase the ability of households to acquire housing at market prices.
Key words: social housing, affordable housing programs, public housing.
Анотація. У статті розглядаються механізми державного регулювання доступних житлових програм в Україні, Великобританії та деяких європейських країнах. Проаналізовано стан ринку соціального житла. Розглянуто кроки щодо вдосконалення механізмів державного регулювання доступних житлових програм в Україні, Великобританії та Європі.
Концепція соціального житла розглядається як спосіб забезпечення громадян країни житлом, яким може володіти та управляти держава, неприбуткові організації або держава та неприбуткові організації разом, як правило, з метою забезпечення доступним житлом.
Доступним житлом визначається житло, яке вважається доступним для тих, у кого середній дохід оцінюється національним урядом або місцевим урядом за визнаним індексом доступності житла.
Відзначено, що основним чинником є дохід, а не ціна та наявність житла, що визначають його доступність. У ринковій економіці розподіл доходів є ключовим фактором, що визначає кількість та якість отриманого житла. Тому розуміння проблем доступного житла вимагає розуміння тенденцій та диспропорцій у доходах та фінансовій спроможності. Житло найчастіше є єдиним найбільшим видатком сімей з низьким та середнім доходом. Для сімей з низьким і середнім доходом їх житло також є найбільшим джерелом доходу.
У статті описуються умови участі у наявних програмах доступного житла в ряді країн.
Дійдено висновку, що політики, які приймають рішення на рівні глобальних, національних, регіональних, муніципальних, громадських асоціацій, намагаються реагувати на проблему доступності житла, надзвичайно складної кризи глобальних масштабів, з великою кількістю політичних інструментів. Ці відповіді варіюються від інструментів безперервного фінансування до довгострокових міжурядових інфраструктурних змін. Потреби доступного житла можуть бути вирішені за допомогою інструментів державної політики, які зосереджуються на попиті на ринку, програмах, які допомагають досягти фінансових показників, які роблять житло доступним. Це може включати підходи, які просто сприяють економічному зростанню в цілому - з надією на те, що зміцнення економіки, підвищення рівня зайнятості та підвищення заробітної плати підвищать здатність населення придбавати житло за ринковими цінами.
Ключові слова: соціальне житло, доступні житлові програми, державне житло.
Аннотация. В статье рассматриваются механизмы государственного регулирования доступных жилищных программ в Украине, Великобритании и некоторых европейских странах. Проанализировано состояние рынка социального жилья. Рассмотрены шаги по совершенствованию механизмов государственного регулирования доступных жилищных программ в Украине, Великобритании и Европе.
Концепция социального жилья рассматривается как способ обеспечения граждан страны жильем, которым может владеть и управлять государство, неприбыльные организации или государство и неприбыльные организации вместе, как правило, с целью обеспечения доступным жильем.
Доступным жильем определяется жилье, которое считается доступным для тех, у кого средний доход оценивается национальным правительством или местным управлением по признанному индексу доступности жилья.
Отмечено, что основным фактором является доход, а не цена и наличие жилья, определяющих его доступность. В рыночной экономике распределение доходов является ключевым фактором, определяющим количество и качество полученного жилья. Поэтому понимание проблем доступного жилья требует понимания тенденций и диспропорций в доходах и финансовой способности. Жилье зачастую является единственным крупнейшим расходом семей с низким и средним доходом. Для семей с низким и средним доходом их жилье также является крупнейшим источником дохода.
В статье описываются условия участия в имеющихся программах доступного жилья в ряде стран.
Сделан вывод, что политики, которые принимают решения на уровне глобальных, национальных, региональных, муниципальных, общественных ассоциаций, пытаются реагировать на проблему доступности жилья, чрезвычайно сложного кризиса глобальных масштабов, с большим количеством политических инструментов. Эти ответы варьируются от инструментов непрерывного финансирования до долгосрочных межправительственных инфраструктурных изменений. Потребности доступного жилья могут быть решены с помощью инструментов государственной политики, которые сосредотачиваются на спросе на рынке, программах, которые помогают достичь финансовых показателей, которые делают жилье доступным. Это может включать подходы, которые просто способствуют экономическому росту в целом - с надеждой на то, что укрепление экономики, повышение уровня занятости и повышения заработной платы повысят способность населения приобретать жилье по рыночным ценам.
Ключевые слова: социальное жилье, доступные жилищные программы, государственное жилье.
Thesis statement. In Ukraine are changed the terms of the "Affordable Housing" program. The Cabinet of Ministers of Ukraine has improved the program of providing affordable housing to the population. The updated program should give citizens the freedom to choose their future housing, simplify and facilitate access to public lending, ensure transparency, and expand the range of participants and credit opportunities through the involvement of state-owned banks.
The "Affordable Housing" and "Youth Lending" state programs are being implemented in the country. These programs must meet the requirements of the time and the needs of those who need to resolve the housing issue.
Analysis of recent research. Many scientists and experts studied the question of affordable housing programs in Ukraine and Europe, in particular Yu. Kyrychuk, S. A. Shcherbinina, D. P. Holovan, T. Ye. Voronkova, O. A. Koshelenko, A. V. Serdiuk, M. Schmelich, M. Christl, R. Seifert, W. Amann and others. However, the study of the affordable housing programs in Ukraine and other countries is still actual and requires more detailed consideration.
The objective of the study. The purpose of this article is to compare the programs of affordable housing for population in Ukraine and some other developed countries and to determine the importance of the state regulation of this issue.
Results. Today, according to the State Fund for Youth Housing Construction (SFfYHC), the "Affordable Housing" program in Ukraine can be used by citizens (families) [1]:
The average monthly aggregate monetary income of these categories of citizens and their family members per one person shall not exceed 5 times the average monthly salary in the corresponding region calculated according to the State Statistics Service.
The amount of state support for the purchase of housing is:
The amount of state support to citizens is calculated taking into account:
Then it is necessary to pick up corresponding documents in SFfYHC.
The final stage is the choice of the apartment from the List of housing objects (defined by the Interdepartmental Commission of the Ministry of Regional Development, Construction and Housing and Communal Services of Ukraine (Minregion) according to the place of registration/residence of the participant of the program.
After that, it is necessary to sign an agreement with the regional department of the SFfYHC.
In his blog in "Segodnya" Internet magazine in May 2018, Vice Prime Minister of Ukraine, Minister for Regional Development, Construction and Housing and Communal Services of Ukraine Gennady Zubko stressed that the issue of affordable housing for Ukraine is more than ever important [2]. Implementation of state programs in this area such as Affordable Housing and Youth Lending is under the authority of the State Fund for Youth Housing Construction. Today, these programs do not meet the requirements of the time and do not meet the needs of those who really need to solve the housing problem. And this, first of all, youth, ATO participants, internally displaced persons.
Unfortunately, all initiatives aimed at changing these programs, which were laid down in the SFfYHC Strategy, have not been implemented by the institution. Minregion forms the state housing policy, but does not manage the SFfYHC. Yet, under the pressure of the Ministry, it succeeded to change the system of loans for Affordable Housing for ATO participants and settlers. Now, instead of the 30%/70% formula for these categories of citizens, the state provides support for paying up to 50% of the cost of housing. The Ministry also removed the requirement for migrants for mandatory withdrawal from the quartile when receiving such preferential credit. Now, to participate in the program, they only need to confirm the status of the internally displaced person.
The Ministry of Regional Development proposes to bring standards of living space to the needs of people. If a person is in extreme need of housing, then she can choose a small and inexpensive, and most importantly - affordable. Thus, it is possible to remove from the list of applicants the secured people who receive compensation from the state on the standard area, buy a large apartment and for a price of 24-25 thousand UAH per square meter.
The proposal of the Ministry of Regional Development is as follows: the standard of the total area of housing that can be lent by the state - up to 21 square meters per family member, and an additional 10.5 meters square per family. Previously, within the framework of the program, it was allowed to buy apartments of more than 100 square meters. Such real estate is unlikely to fall under the category of "affordable housing".
Another initiative that will make housing more affordable is the cost of 1 meter square housing. The price per square meter should not exceed the marginal prices, which are equal to the indirect value, which today is purchased for housing for border guards and military Armed Forces.
Affordable housing can be purchased, both at existing facilities and in already rented buildings. At the same time, the interest rate for using the loan can not exceed the discount rate of the NBU plus 3% per annum.
In order to ensure transparency, the Ministry proposes to involve state banks in the implementation of these programs. The Ministry of Regional Development has a successful experience working with banks under the program "Warm Loans", then why not transfer it to this sphere. Public banks could be front-offices of state lending, ensuring transparency, increasing program participants in the regions, expanding credit facilities through additional mortgage programs and lending small-sized housing.
As for the developer, it should not be chosen by a commission, appointed by the Ministry of Regional Development, as it is in the current program, and citizens themselves. Indeed, genuine accessibility is to enable people to choose their own options among affordable housing, rather than forcing them to buy at a developer's commission.
For example, due to the current approach, in 2017, despite the funds sent to the Donetsk region, there was not purchased a single square meter. And this is in the area where the greatest number of settlers! Instead, funds were transferred to Kyiv, where, in most cases, large and expensive apartments were purchased. It should not be like this.
The Ministry of Regional Development also proposes to lower the average monthly income of the family, which will have the right to state support from 5 to 3 sizes of average monthly salary per person per region according to the region. This will greatly facilitate the access of young families to the program and expand the range of participants [3].
It is important for the state to protect the rights of those citizens who could not buy a single square meter in the Donetsk region, and not lobby the interests of developers to "incorporate" them into the program. Thus, approaches to providing Ukrainians with affordable housing will be dramatically changed, and the number of square meters purchased will provide an effective number of apartments and the effectiveness of state aid.
To compare Ukrainian social housing programs, we give some examples of similar programs from other countries.
If for some 100% of the home mortgage is not available for financial reasons, the British program "Help to Buy": "Shared ownership" allows you to buy a share of the house (from 25% to 75% of the cost of the house) and pay a rental fee on the remaining share . Later you can buy the rest of the share [4].
You can buy a house through "Help to Buy": "Shared ownership" in England if:
With help of "Help to Buy": "Shared ownership" you can buy a newly built or existing home through resale programs from housing associations. You need to take a mortgage to pay your share of the purchase price of a house, or to finance it at the expense of your own savings. Shared ownership properties are always leasehold.
Under the general scheme, there are several options for housing: ownership of a maximum of 75% of the value of real estate. If in this case the owner wants to make any changes (repairs) in the apartment, he will have to agree with the housing association.
Owning 100% of real estate. Such property is less in the market. In the case of ownership of 100% of the property, the owner has the right to sell it.
Priority to other groups will be given to servicemen through state-owned shared ownership schemes. However, local councils with their own housing programs with partial ownership may have some priority groups based on local needs in housing.
For the purchase of a one-room apartment, the priority is given to single people without children.
In case of purchase of two-room apartments, priority is given to married couples or joint applicants.
It is also a priority when the person is renting an apartment and working in the same area.
People with Disabilities: The HOLD Housing Assistance Center can help you to buy any house that is sold on a shared ownership basis if the applicant has a long-term disability.
You can only apply for HOLD if the properties available through other home-ownership schemes do not meet the needs of people with disabilities, for example, if you need ownership on the ground floor.
Older people can get help from another housing scheme called "Older People’s Shared Ownership" if the person is aged 55 or over.
It works in the same way as the general Shared Ownership scheme, but you can only buy up to 75% of your home. Once you own 75% you won’t have to pay rent on the remaining share.
European social housing is a state subsidy for housing construction, especially for social groups that can not meet their housing needs in the free housing market. The condition of settlement is the maximum rent ("rental value"), as stipulated in the German permitted Use of Social Housing Act (WoBindG) or the comparable Land Law of Austria. This target housing is subject to lease.
Depending on the state system, social housing in the economic and social terms is an addition to the development of housing construction or occupies its place.
For many decades, the legal framework in the Federal Republic of Germany was the Second Law, which was designed to create apartments that, by size, equipment and lease or taxation, would be determined and suitable for the general public (quoted from § 1, II, WoBauG) [5]. In addition to the creation of affordable housing after the II. WoBauG it also made possible for the general public to earn revenues from owner-owned real estate.
As in many other countries, social or public housing in Germany is a state transfer. In addition, by the 1990s it was an important element of state economic impact and urban planning with broad public investment. With the restructuring of social programs systems since the mid-1990s, the role and function of social or public housing has changed to rebuild the city and its inhabitants.
On the example of the housing market of Dresden. There is created a social housing that nobody can afford. Lack of housing and rent increase. To stop this, the state of Saxony Dresden has allocated 21.5 million euros for new social housing. At the same time there is a very loud criticism that they are not suitable for the weak social groups.
The city of Dresden has to receive 550 new social households. It was declared by the city for the order of Saxony "Monthly for German Law" (SACHSEN). Housing is funded in the amount of 21.5 million euros in a free state of Saxony, and it should be newly built or repaired. "We are preparing a leased and occupied housing," the city said. After agreeing the developing by the free state, it is now important to develop specific projects with cooperatives, real estate companies and developers. An "uncertain part of the budget" should also be available to the new municipal housing and leasing company [6].
New social housing should be created in addition to apartments planned by new housing and construction companies. In the next few years Dresden will receive 1350 new apartments for socially unprotected people. However, the scope of assistance has not yet been exhausted. The capital of the state may also apply to the free state for the financing of additional apartments in the next and after next year.
Social housing is now fully occupied. Currently, Dresden has about 10,200 social residential buildings - 200 of the housing subsidies of the 1990s and 10,000 leasehold properties owned by Vonovia - Germany's largest housing real estate company. 9,700 apartments of Vonovia are currently leased, thus they are almost completely leased. The remaining 300 empty apartments are only the result of changes of tenants and renovations.
The apartments are reserved for the weak social groups for only 15 years.
An important critique of politicians in Dresden is the low average duration of 15 years. According to Michael Schmelich, a German politician, in 2035 the Social Charter with Vonovia ends, then Dresden risks to lose 10,000 residential buildings. This will be a completely unfulfilled housing market policy. The politician also reminded that increase of the cost of rent in new apartments should be possible only in 15 months.
Standards for social housing are no longer obligatory.
Access to social housing is regulated, among other things, by so-called housing permits. Last year, almost 2,700 residents of Dresden received such residence permits from the city. Three quarters of them are men, most of them are lonely. Three percent of the applicants - 60 years and over.
In addition to residence permits, people can also apply for housing assistance to pay their rent. A little less than 6,500 residents of Dresden also received housing assistance last year. More than 26700 tenants applied for support.
In Austrian cities in the early 20th century (for example, at the expense of housing assistance), but in particular, very intensively in the 1920s and early 1930s, as well as between 1950 and 1970, many social housing objects were built, mainly as municipal housing. They were often built in the form of houses that create one common courtyard, and they had from four to six floors. Newest projects of public construction have more diverse manifestations. So in Vienna, lately, municipal housing has been created in high-rise buildings, and in Linz, there is a pilot project for environmental urban construction, the Sunny City, as well as the building of a non-profit project.
The Austrian social housing system is characterized by a close link between housing subsidies and nonprofit building associations in accordance with the Shared Housing Act, which receives tax benefits from shared housing and are beneficiaries of housing subsidies, and also are subject to favorable rental regulation rates - even at the end of the obligations in housing support - and permanent new construction.
Indeed, the sphere of construction of social housing in Vienna is dominant. Providing about 900 thousand apartments, social housing in Austria accounts for almost a quarter of the total housing stock (60% of housing in the residential sector), ranked second in the European Union. More than two-thirds of construction of social housing is occupied by the non-profit residential industry. The rest is connected with the municipal housing stock, which dominates in Vienna. There, the city council is the largest builder in the world, and non-profit housing, starting with the Austrian capital, is a pioneer for Europe. In Austria, the subsidized housing system not only covers low-income households but also extends to the middle class.
Although this has largely prevented trends in social segregation, the concentration of people from different economic indicators in "expensive and cheap" residential areas. Nevertheless, the question arises as to whether social housing construction in Austria fulfills its purpose. According to the liberal Vienna Agenda Austria research institute, in the EU the most benefits from subsidized housing get people from socially disadvantaged groups. "Only 22 percent of the inhabitants of the cheapest social housing homes in Austria have a low level of earnings, so they account for 20 percent of the lowest incomes, 66 percent of the inhabitants are middle-level residents, and the highest salaried workers still account for 12 percent," said Michael Christl, an economist of analytical center Agenda Austria [7]. Therefore, residents of municipal resident building should be able to disclose their income much more often. If they exceed a certain value, the rent should increase to market value. Additional income could be used to build new apartments.
The Agenda Austria Analytical Center recommends the phasing out of old low-rented contracts, and the prices for these apartments should be adjusted to a market price, similar to what is happening in Germany with the help of a lease comparison system. This will reduce the overall level of rent and reduce the burden on new occupants, who are often young people.
However, Wolfgang Amann, Director of the Institute for Housing and Construction (IIBW) in Vienna, appreciates the strong position of non-profit housing developers. According to IIBW, the total cost of housing policy in Austria is 0.7 percent of GDP. It is much less than in other countries, such as France, England and the Netherlands, says Amann. Unlike Germany, rental rates in Austria are constantly decreasing. The reason for this is enshrined in the Law on the shared use of housing the cost of rent for the duration of lease. The fact that the proposal is weakened by the spread of non-profitability, Amann sees only limited: in some regions there are no private impulses, the expert recommends paying attention to this. Yet in the last year more than 20,000 construction licenses were issued in Vienna. In Austria, they will be more than 70 thousand, as calculated by the Austrian statistics authority. In terms of population, the number of new buildings in Austria is twice as high as in Germany [8].
Critics, on the other hand, say that from the point of view of owners it's not worth investing because of low prices. As the Deloitte Property Value Index shows, it represents a relatively low profit of less than 3 percent per year. Private homeowners see that state housing distorts the market. Unlike the private sector, non-profit organizations do not pay lease income taxes. This would be justified if only those who have this need could win. In fact, less than half of tenants have low income. The Austrian housing market is one of the most rigorously regulated in the world. Three of four lease contracts are governed by the state.
Is this redistribution fair in relation to the middle class, causes little doubt. From the point of view of the Austrian agenda, the regulation of the housing and public housing market creates two classes of society: "There are insiders who are protected, despite good income and improved welfare, and outsiders, who have complicated access to optimal housing. This is the dark side of the "Vienna Housing Paradise" [7].
Conclusion and prospects for further research. So, it can be concluded that the policy makers at global, national, regional, municipal, community associations levels are attempting to respond to the issue of affordable housing, a highly complex crisis of global proportions, with a great number of policy instruments. These responses range from stop-gap financing tools to long-term intergovernmental infrastructural changes. Affordable housing needs can be addressed through public policy instruments that focus on the demand side of the market, programs that help households reach financial benchmarks that make housing affordable. This can include approaches that simply promote economic growth in general - in the hope that a stronger economy, higher employment rates, and higher wages will increase the ability of households to acquire housing at market prices.
The government policies has to define banking and mortgage lending practices, tax and regulatory measures affecting building materials, professional practices (ex. real estate transactions). The purchasing power of individual households can be enhanced through tax and fiscal policies that result in reducing the cost of mortgages and the cost of borrowing. Public policies may include the implementation of subsidy programs and incentive patterns for average households. For the most vulnerable groups, such as seniors, single-parent families, the disabled, etc. some form of publicly funded allowance strategy can be implemented providing individual households with adequate income to afford housing.
References
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