How different? Comparing housing policies and housing affordability consequences for low income households in Australia and the Netherlands

Much of the literature considering the historic development of housing systems has focussed on the factors contributing to similarities and differences in housing policies, rather than on questioning their significance to housing outcomes. This study suggests that fresh insights may be gained into the importance of differences in housing policy strategy by analysing their consequences. Two countries, Australia and the Netherlands, with contrasting approaches to intervention in housing, while similar in many other respects, have been used to examine whether and to what extent differences in housing policy are significant to low income households. In keeping with the thesis that countries can achieve similar housing outcomes through different policy strategies, the study finds a strong similarity in the extent of affordable housing that has been provided using different policy means: assisted home ownership in Australia and deeply subsidised social housing in the Netherlands. A second finding is that the increasing reliance being placed on market housing in both countries is not proving as successful as past, strongly government-assisted strategies. The significance of this finding to the future is underlined by data showing in aggregate that most growth in households in the lowest two quintiles of the income distribution is being absorbed into the least affordable tenures (to them) at present: the home purchase sector in the Netherlands and the private rental sector in Australia. Third, the last two decades been characterised by deteriorating affordability for low income households generally, although the severity of the change varies both between the countries studied and within each, by tenure and other factors. Other empirical findings expose important differences and divergent tendencies in the housing situation of low income households. First, the geography of affordability is very different. In Australia, there are much larger cost differentials between inter and intra-urban housing markets. Urban and regional price differentials in the Netherlands are much more muted, although that situation may be changing, as a more privatised land development system develops. Second, equity within the low income group differs. In the Netherlands, differences in affordability within the low income segment are much less extreme between tenures and age groups than those in Australia. Third, there are differences in the trade-offs that low income households make to obtain affordable housing. In general, the Netherlands has more smaller and higher density housing, affecting the choices of lower and higher income households alike. In Australia, many low income households in the rental sectors have poorer quality housing, as well as worse affordability ratios, compared to their counterparts who are home buyers/owners. The study concludes that four interconnected aspects of housing policy strategy have had the most influence on the evolution of the similarities and differences in housing affordability outcomes for low income households: ? the short and long run impact of housing policies favouring home ownership; ? the type and extent of urban policies geared to the provision of affordable housing; ? the role, organisation and capacity of social rental housing; and ? the effectiveness of demand side subsidies.