On the effects of the housing allowance system
Abstract
The purpose of the study is to examine the realisation of the objectives set for housing allowance. The research problem is an examination of the differences between the housing objectives expressed in the general housing allowance system, the norms reflecting those objectives, and the actual housing situation of residents. The starting point is a perception based on everyday observation, according to which the dwelling chosen by families is “one size too small” — that is, it does not correspond to housing policy recommendations. On the other hand, the housing allowance system has been designed so that the allowance covers 80 percent of the additional costs if a family were to move into a dwelling of at most a size defined as reasonable. This requires, however, that the other housing cost factor — the rent per square metre — is within reasonable limits. The study seeks to examine the effects of housing allowance as a reducer of housing expenditure and as a means of improving housing spaciousness, and to bring to light the reasons that prevent the realisation of these objectives.
The report is divided into three parts: Part I presents the history of the housing allowance system and the bases for determining the allowance. Part II examines the realisation of housing allowance objectives on the basis of data compiled from new tenants in state-subsidised rental housing. Part III deepens the research problem using interview data, which are analysed qualitatively.
On the basis of the findings, the reasons for overcrowded housing are the high cost of housing (despite the allowance) even at the current level of housing spaciousness, and a shortage of suitable dwellings. Poor familiarity with the housing allowance system also contributes to some extent to families seeking dwellings smaller than their needs require.
The study brings to light various reasons that prevent the optimal functioning of the allowance. The principal reasons are: 1) the segmentation of the housing market, which does not correspond to the assumptions on which the system’s functioning is based; 2) incomplete information about the functioning of the allowance system: none of those interviewed were aware that the housing allowance covers 80 percent of the additional costs of moving into a dwelling of at most a reasonable size; 3) residents’ behaviour is not based on utility maximisation, which the ideal model of housing allowance assumes; 4) the housing allowance planning system contains factors that hinder the system’s intended operation.
The significance of housing allowance for residents lies in its ability to reduce housing expenditure. It is therefore above all a means of balancing household finances. For some recipients, it additionally facilitates decision-making on important matters relating to housing and everyday life. (AI translation)
- ISSN: 0358-5980
- ISBN: 951-9281-69-X
