European countries have a long history of social housing system. The housing system in every nation is a response to demographic changes in which housing as a scarce resource has to meet the need of the growing population. In rapidly growing population, the housing problem is adverse and people might be forced to change their social system to accommodate the housing needs. In the modern ages, various European governments have developed policies that define the allocation of housing facility including renting or owning houses. Further, government influence in housing system is evident in nature planning of various cities. European housing system can be understood through the lenses of socio-political systems in the individual country. From this perspective, authors have settled that social housing system in Europe belongs to two categories namely mass or universalist, a model evident in Scandinavian countries and the residual model, evident in UK and other southern countries (Scanlon and Whitehead 2008, 18). Nevertheless, urban regeneration has forced every European country to devise social housing policies, which responds to their individual housing needs.
Criticism of Housing System
Criticism of housing system explores various theories concerning opportunity accumulation verses social forces. Some critics argue that wealth disparities between the landowners and the non-owners define household’s social differences and disparate life opportunities (Van Kempen 2005, 35). On the other hand, a school thought refuting the above theory asserts that when the government creates opportunities for owning houses, the society is likely to experience anxieties especially people with unsustainable jobs. Perhaps these paradigms set the precedence of housing policy in the UK and Germany thereby culminating into the varied policies. Additional scholarship tends to focus on the importance of assets, social mobility, and wealth inequalities as aspects that define social housing.
In the views of the renowned social critic, Kemeny, ideological character of social structure of the society is defined by degree of collectivism or privatism. The renting system exhibited in a country is a result of policies that promotes either collectivism or privatism. He further noted that non-profit renting is a safety net used by the government to cover persons who are unable to meet the high rental cost. Contrastingly, Esping-Andersen (1999, 648) argued that one should not speak of welfare state because different welfare state exhibit different characteristics. In the views of Esping-Andersen housing system should depend on three factors namely the manner in which mobilization of the working class took place, coalitions between political parties and expansion of welfare state. Much of the housing development in UK and Germany borders on the welfare theories exhibited by the Esping-Andersen and Kemeny.
Land and Housing Policy Instruments
A comparison of housing system in Germany and UK reveals that the two nations are polar opposite. In terms of affordability, German’s housing system is affordable as opposed to the UK housing system which is unaffordable not only in Europe, but across the globe. In terms of housing policy, Germany offers responsive housing supply to her citizens, makes considerable rental controls, and encourages tighter credit regulation as opposed to U.K. The scale of intervention in the two countries is different an aspect that tends to explain the varied cost of housing in the two countries.
The policy instrument defining the housing system in the two countries is different. In U.K. the housing policy recognizes three systems namely means-tested housing benefit, social housing-normally at below the market rent, and affordable taxation of owner occupiers. Although the three categories tend to segment the U.K society within the identified social groups, it does not successfully address the concerns of the majority. The larger population living in the urban settings is neither landowners nor high income earners. Arguably, this condition forces the low-income earners to strain in order to meet the housing needs.
Housing supply in Germany is higher than the supply in U.K. Other than the growing population, which piles pressure on the existing housing facilities, the government policy is instrumental to development of houses in both countries. Authors agree that tenure pattern have been changing, reflecting the intricate factors associated with the changing household structure, employed patterns, inward migration and affordability (Edgar et al. 2002, 24). These aspects influence household to move between home ownership and private renting a vice versa.
A review of the constitutions of the two countries seems to explain the difference in housing supply in the counties. The German constitution provides that a landowner have the liberty to build. This liberty grants the landowners the opportunity to construct new buildings provided he or she observes the laws granting the permission to build (Fenger 2007, 17). The local authorities ventilate the approval of the proposed construction. Thus, the basic avenue that influences construction of new houses is the ability to meet the government requirement concerning the construction of a new structure. Moreover, the local authorities directly influence the planning process a feature that affects financial incentives provided by the government to local authorities towards the construction of the new houses. In essence, encouraging development is a vital approach for the local politicians to raise their budgets.
Contrastingly, the U.K land policy constrains the supply or availability of land for development. U.K. has a longstanding policy, which defines the boundary of urban centers. Thus, one would observe a strict greenbelt surrounding urban centers throughout the U.K. Although the greenbelt policy protects agricultural land and promotes environmental conservation, it limits the expansion of urban centers beyond the demarcated boundaries. Largely, as the urban population increases the pressure on the existing housing facilities increases. Further, the absence of government goodwill to encourage the construction of new houses dampens the hope of the urban dwellers to experience affordable housing. Available literature shows that the greenbelts have significantly contribute towards the ever-increasing housing prices.
In relation to the Kemeny theory, U.K planning objective promotes containment and densification. This is a relevant example of privatism exhibited in the landownership system. Presently, the present housing system provides that 60% of the land provided for housing facilities should be land that has already been developed for other usage (Shelter 2000). Arguably, this policy tends to suggest that U.K. would continue to experience limited supply of housing facilities as long as the existing policies limit the ability of the landowners in the restricted areas to develop housing facilities. Moreover, the policy seems to promote the ever-growing prices in the housing system. Since the U.K. government has limited the usage of land especially defining land use in the urban and greenbelt regions, addressing the housing needs of the growing population seems to be a problem that would not be ending any soon.
Another policy instrument, which is limiting U.K’s housing system, is status quo, for example from housing to office or from rural to urban. Attempts aimed at changing the preexisting land use often face resistance from the respective governments. Additionally, a prospective developer must seek permission from the government before changing the preexisting and use system. In other parts of the world including Germany, the laws promoting status quo do not exist. In fact, the Germany housing policy is competitive to meet the demographical changes that arise from urbanization and other socio-political developments. In the views of various critics, status quo restricts new developments that significantly affect the supply or availability of land for housing in the UK.
Whereas Germany practices liberal system, U.K embraces centralized fiscal system. In liberal system, the landowners reserve the right to determine the development they intend to make in their land (Hoekstra 2003, 59). On the other hand, the U.K. centralized system rest the decision to increase housing land with the local authorities, which are the principle decision makers and enjoy the mandate to ventilate over the provision of new houses. Some critics attribute the opposition to development with low revenue that the central government receives from the new developments.
Available evidence shows that the population growth in U.K and Germany are almost the same. Moreover, the two nations share similar factors affecting housing demand. Interestingly, the government regard to housing demand in the two nations wild varies. The Germans build houses at higher pace than the British do. A comparative study conducted by Cologne Institute of Research and Economics indicated that the Germany developed 50 ha of land per 100000, but U.K developed 15ha for the same population. This disparity seems to demonstrate the influence of the socio-political structures as well as the influence of social policy in addressing the needs of the societal populations.
In the recent days, the U.K. government has proposed a radical change on infrastructure development in order to meet the growing needs of society. The proposal labeled, The Growth and Infrastructure Act 2013 provides for changes in the existing planning act to address the concerns of the society (Smith 2014, 3). This proposal tends to support Esping-Andersen theory about welfare development, which argues that as the population change, the welfare pattern of the country would change to accommodate such needs (Esping-Anderson1999, 648).
Rental System
A considerable population of Germany and U.K live in the urban centers. A larger percentage of people living in the urban centers contribute to economic development through working in personal businesses, private, and government offices. This population must reside within the proximity of the urban centers. Obviously, majority of the working population in the urban centers are not landowners in the same place. Instead, they reside in the rental houses as they go about their businesses. Available literature shows that German rental system plays a significant role in influencing the stability and affordability of housing (Fitzpatrick and Stephens 2007, 7). Whereas the German government directly control the tenancy system including the tenants security of tenure as well as the probably rent that a tenant would pay, the U.K government has liberalized the rental system. The U.K government abolished tenancies control in 1989 creating room for landowners to peg housing rents for the houses at will. Although critics agitating for a free market would argue that liberalization of the market increases the value for money, certain products may be unaffordable if the government does not exert control.
Unlike U.K., tenancy system in Germany provides security of tenure to tenants provided he or she behaves well and pays rent, except on rare instances when a member of the landowner’s family requires accommodation or when the building is under renovation (Scruggs and Allan 2006, 13). Furthermore, renting is a common practice in Germany and on many occasions, it features as a political interest. Thus, instances perceived to deprive the tenant’s of his or her right does not only receive media courage, but also political attention. Elsewhere, the liberal supply of housing facilities contributes to the stable price hence security of tenure. As evident in the housing bubble, in the international scene, Germans do not rush into buying an aspect that promotes the stability of housing prices in the nation.
Notably, in U.K., rental property is situated in the inner suburb or outer suburb of the city or urban centers. Hardly would one find a new building, majority of the buildings are more than two decades old. Nevertheless, some of them may look new due to recent modernization. Some critics argue that housing supply constraints fuel the volatile nature of U.K housing prices (Scanlon and Whitehead 2008, 11). Arguably, house expectations dictate tenure choice. During periods when people expects the prices to rise, tenants often choose to enter owner occupation the opposite is true when the population does not expect instability in house prices. The U.K. housing system in the U.K seems to influence the social system of the urban population. Studies identify various housing needs in U.K including homelessness, overcrowding, unsuitable accommodation, sharing households, concealed and unaffordability.
Availability of Credit
The housing demand patterns in various nations do not only depend on socio-political policies but also the availability of credit. German policy on mortgage finance is conservative whereas that in U.K is deregulated. The German mortgage policy is instrumental in defining the acquisition trend of housing facility. The German government strictly regulates the credit facility with a view of limiting housing bubbles. Persons applying for mortgage finance undergo vetting and loan appraisal. This system limits the number of persons that would settle for housing facility through mortgage finance. Furthermore, financial facilities offering mortgage finance have set high interest rate as a means of discouraging rapid investment in housing facilities.
Unlike Germany, U.K mortgage finance is easily accessible to the working class. The consequent of this policy is a constant quest for mortgage finance by the U.K citizens. Arguably, persons who wish to own houses often rush for the mortgage loans because the lenders offer affordable terms. Another probable reason behind the quest for housing facility is the need to conserve certain social cultures. Some people are comfortable in their own apartments as opposed to living in rented houses. Critics believe that the social culture coupled with the personal interest is critical in shaping human distribution hence housing pattern (Whitehead and Scanlon 2007, 11). The overcrowding of people in the urban centers, for example influences the need to create new housing facilities. Nevertheless, in the absence of social policies that encourage construction of new housing facilities in undeveloped land, the growing population is likely to experience unaffordable housing, which would eventual push the government into instituting new laws.
In conclusion, the housing system in UK and Germany are polar opposite. Whereas Germany encourages development of new housing facilities, UK tends to limit the development of housing facilities beyond greenbelts or developed land. Other than policy instrument, credit availability and rental system of the two countries are different. The consequence of these differences is the development of housing system in which the government exerts control over acquisition of housing facility. Moreover, the German government exerts control of tenancy, and mortgage finance whereas UK has liberalized tenancy and deregulated mortgage finance. Lastly, the constrained land policy in UK has limited the expansion of new housing facilities hence the varied categories of housing needs.
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