Most poor renting families struggle to obtain and maintain housing

4 May May 2016 0950 04 May 2016

While the Canadian city of Medicine Hat has recently become the first city to end homelessness, many people are increasingly being made homeless because they cannot afford their rent, or their landlord kicks them out at the end of a tenancy agreement.

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While the Canadian city of Medicine Hat has recently become the first city to end homelessness, many people are increasingly being made homeless because they cannot afford their rent, or their landlord kicks them out at the end of a tenancy agreement.

Despite housing being considered a basic human need, and identified as a human right by many constitutions and international instruments, according to a recent survey conducted by OECD, in the wealthiest countries the homeless population makes up less than 1% of the total population. Among the higher reported figures, Canada estimates that it has a homeless population of 150 000, Germany a population of 284,000 and the United States a population of almost 634,000. The United Kingdom estimates a homeless population of over 53,000 for England. The highest reported number of homeless compared to the total population rate is in the Czech Republic, where 1.2% of the population is reported to be homeless, followed by New Zealand with 0.8%.

Researchers interested in the well-being and future prospects of low-income working families, suggest that the best way to get people out of homelessness is to move them directly into permanent housing where they can receive on-site services. This approach, called "Housing First,” provide homeless people with a permanent place to live, before solving other issues like alcoholism, mental health problems or drug addiction. Once vulnerable people are in a place of their own, the underlying factors that led to homelessness would be addressed. For example, the city of Medicine Hat in Canada has recently became the first city in North America to end homelessness thanks to this new strategy. That may sound almost insultingly simplistic for such a complex problem, but it only works if there is sufficient affordable housing.

What does affordable housing mean? A general rule of what experts consider to be an affordable “home”, whether to rent or buy, is that our housing costs should be no more than one-third of our net income. According to the OECD, many households – and especially low-income and vulnerable households – struggle with their housing costs, and are often faced with poor housing conditions. “On average, 39% of low-income households in OECD countries spend more than 40% of their disposable income on housing”, says the study. When affordable housing is not available to low-income households, family resources needed for food, medical or dental care, and other necessities are diverted to housing costs. This can also lead to one of society's most visible examples of the differences between rich and poor, and between people of different ethnic origins: residential segregation. Because many of the areas that offer better access to education, employment and social opportunities are characterized by high housing prices and might be not be accessible to low-income households, or be accessible only at the cost of very long commutes.

Of course, affordability of housing also means being able to live in a suitable home, where people feel safe, have privacy and personal space, and can raise a family. On average, 15% of households in the OECD live in overcrowded and substandard homes. The percentage of households lacking adequate living space is above the OECD average in Chile (where 16% of the population lives in an overcrowded dwelling), the Czech Republic (19%), Italy and Greece (24%). Many homes are also unsanitary. Over 14% of low-income households live without access to an indoor flushing toilet, and rates are highest in Eastern Europe, Chile, and Mexico.

According to a report issued by the McKinsey Global Institute in 2014, “if current trends in urbanization and income growth persist, by 2025 the number of urban households that live in substandard housing, or are so financially stretched by housing costs that they forego other essentials, such as healthcare, could grow to 440 million”.

But what can be done to help people who cannot afford home of decent quality? The report says improving access to affordable housing is an important goal in most OECD countries. This is why access to good-quality affordable housing is important for promoting a number of social policy objectives, including poverty reduction, equality of opportunity and social inclusion.

The bad news is that despite using a wide set of housing policy instruments, governments have not always been effective in achieving their objectives. In most reporting countries home-buyers can benefit from grants, financial assistance and public guarantees often reserved to low-income first-time buyers. Homeowners also often benefit from tax relief for home purchases. “Besides being unequitable, these subsidies can distort incentives to support households who are most in need, as they tend to be under-represented among owner-occupants”, concludes the report.

Cover Photo: Getty/ YOSHIKAZU TSUNO

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