Publications to Download

Martin Lux 2004

Quasi-Normative Approach to Housing Affordability

Glasgow: University of Glasgow

The paper attempts to introduce a new approach to housing affordability analysis based on calculation of economic “quasi-normative” on rents in social (rent controlled) housing. Such “quasi-normative” is set on a level of average rent in social (rent controlled) housing that is connected with the lowest total public costs. The effectiveness of housing allowance is also evaluated in this context. Two case studies are analysed: Scotland and the Czech Republic. The extensive econometric simulations of public cost of alternative rent levels in those countries took into account not only the most relevant cost items but also the side effects of housing allowances and general housing policy changes. Behavioural aspects of higher/lower rents, such as tenure choice and employment status change, were also added. The results show that while there was no rational space for further rent increase in Scottish social housing in 1996, the rents in the Czech municipal rent-controlled housing “should” have increased by about 70% in 2001.

Full version of the publication is available here.