Last week I attended a hearing held by the House Financial Services Subcommittee on Housing and Insurance, “The Future of Housing in America: A Comparison of the United Kingdom and United States Models for Affordable Housing.” Members of the subcommittee heard testimony from many distinguished panelists including Thomas Bledsoe of the Housing Partnership Network and Rick Gentry of the San Diego Housing Commission, both NHC members. Panelists discussed recent reports from the Urban Institute and the Housing Partnership Network that compare the affordable housing models of the United States and the United Kingdom. While the U.S. could implement many policy proposals modeled on U.K. policies, there’s one element critical to the U.K.’s success that the U.S. lacks: housing as an entitlement.
The U.S. and the U.K. share some similar challenges, like rising rental housing prices, rapid demographic changes and aging public-sector housing stock in need of revitalization and redevelopment. Both countries have tried similar approaches to revitalization: replacing distressed, high-crime properties with new mixed-income developments and mixed-tenure housing that also includes some on-site supportive services for residents. Both countries also have a nonprofit housing sector that has developed new, high-quality affordable housing for low-income households.
However, there are also major differences between the two countries’ housing systems and markets. First, housing in the U.K. is an entitlement and a fundamental part of the safety net. Second, as Dr. Susan J. Popkin of the Urban Institute pointed out in her testimony, the U.K. does not have the same legacy of institutionalized racial segregation and discrimination that resulted in so much of the U.S.’s federally subsidized housing stock being located in predominantly minority, chronically disadvantaged, high-crime neighborhoods.
Both the reports and the panelists suggested thought-provoking policy proposals that could improve the service delivery of affordable housing in the United States including:
- Expanding the Capital Magnet Fund.
- Prioritizing preservation and stock transfer to high-capacity nonprofits.
- Using a portfolio model for multifamily housing preservation.
- Making housing a platform for improving communities and building assets for residents.
- Improving access to affordable homeownership.
The U.K.’s housing entitlement benefit has provided a critical part of the funding for nonprofits to develop affordable housing and arguably predicates the success of all other policy proposals. In the past few months housing as an entitlement has cropped up again as a serious policy proposal. In his new book, “Evicted: Poverty and Profit in the American City,” Matthew Desmond calls for a universal voucher program and estimates that it would cost about $22 billion more per year, not counting economies of scale or savings recouped in the health, education and criminal justice systems from reduced homelessness. The Bipartisan Policy Center’s Housing Commission also highlighted the lottery-like nature of housing assistance and proposed extending a form of rental assistance to all eligible households. Desmond, the BPC Housing Commission and others have highlighted the mismatch between much higher subsidies for homeownership through mortgages and far less subsidy for rental assistance.
Continued partnership with the U.K. can provide insights to policymakers and practitioners charged with administering and improving affordable housing programs in the United States. Outside of the housing realm, partnership with the U.K. has led to initiation of Social Impact Financing (also known as Social Impact Bonds and Pay for Success) in the U.S. For more information, check out the Urban Institute’s Pay for Success portal. Click herefor a recording of the event, the witness list and the witnesses’ full testimony.