2.8

The EU Member States make use of three different approaches A) The residual approach Social housing subsidised by a public authority is reserved exclusively for those who are clearly identified as disadvantaged or excluded. There are very strict rules governing the allocation of such housing. Rent is covered almost entirely by the social security system. This approach does not compete with the private housing sector and fully meets the Community definition of a service of general economic interest for social housing as articulated in the decision of the European Commission of 20 December 2011 limiting the exemption from notification of compensation for public service costs to the ‘provision of social housing for disadvantaged citizens or socially less advantaged groups, who due to solvency constraints are unable to obtain housing at market conditions’. This category includes Bulgaria, Cyprus, Estonia, Hungary, Ireland, Latvia, Lithuania, Malta, Portugal, Romania, Slovakia, Spain and the United Kingdom (partially, where the social renting sector is concerned). B) The generalist approach This approach is designed to assist the disadvantaged or excluded (as under the residual approach) and people with few resources, who struggle to access adequate housing due to their precarious income. Access to housing is usually dependent on ceilings for income and on household composition. Rents are regulated and remain affordable. Broadly speaking, this approach has a limited impact on the overall level of housing supply and prices, and does not effectively come into conflict with the private property market, as profit margins are minimal. This approach applies to broader categories of the population but also meets Community requirements to focus on social demand and is used in Austria, Belgium, the Czech Republic, France, Finland, Germany, Italy, Luxembourg, Poland, Slovenia and Spain (for accession to ownership). C) The universal approach used in Denmark and in the Netherlands, but differently. In the Netherlands, this approach is intended to provide housing for anyone, whatever their income (including disadvantaged or low-income individuals), and represents a supply that complements the traditional property market. It has a considerable impact on market conditions and prices through a pricing policy based on the actual costs of housing, rather than referring to market prices, while providing security of tenancy not offered by the private sector market. Due to its lack of focus on specific social demand, this universal approach to housing is disputed by the European Commission, which believes that it does not match the Community definition of the SGEI for housing. The universal approach is no longer used in Sweden, which has abandoned the explicit classification of housing as an SGEI. In Denmark, the universal approach is deeply embedded in the welfare model. It does not limit the notion of disadvantaged, vulnerable or excluded groups or persons to a certain income level. The focus is on providing affordable and accessible housing for people in need thereof. It supplements the traditional property market by lifting legal social obligations, ensuring equality and a social mix across ethnicity, gender, income, age, disabilities and mental or physical need. The pricing policy is regulated and based on the actual costs, which excludes the possibility of overcompensation.