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Prof Duncan Maclennan, Professor of Public Policy at the University of Glasgow

14 May 2019, 4:46 UTC Share

Shaping Futures: Working for Better Housing Outcomes in Britain, Canada and Australia

Shaping Futures grew out of a tradition of housing research at the University of Glasgow and, supported by the universities of New South Wales and Toronto, it developed into an international collaborative partnership of 17 non-profit housing providers, cities and government agencies. It exchanged and produced knowledge in three face-to-face meetings to plan and progress joint-working over three years about housing processes, problems and policies in Australia, Britain and Canada (ABC countries).

The countries had much in common, including high incomes, established housing policy interests, deregulated finance systems and market-led housing ownership and provision. They also had significant differences; for instance Britain had an asymmetrically devolved structure of housing policy autonomies, a difficult decade of austerity policies and a history of significant non-market housing provision. Within each country, as housing is a local system impacted by national and global trends and shocks, there were also differences in outcomes across regions.

Common Processes and Problems
A trinity of adverse housing outcomes prevail in all three countries. Homelessness had grown significantly in this millennium, despite growing policy concerns and expenditures. Rising homelessness reflected lengthening queues for non-market housing that had arisen both from the decline in social housing production and the rising number of applicants with flat incomes as market sector rents rose rapidly. In all three countries national governments had reduced investment to meet agreed, and rising, needs for housing. Driving these difficulties, the geography of economic growth (with the major 3 or 4 cities in all the countries producing well over 50% of GDP) had led to demands and needs unfolding within housing markets with inherently sticky supply. With deregulation of mortgage markets allowing higher borrower gearing, loan to income ratios typically rose from 2 or 3 to 7and 8, inducing sharp and sustained falls in the share of under 35’s owning homes. In rental and owner sectors there was a widening problem of housing affordability reaching up to median income levels.

At the same time historically low mortgage rates, allied to weaker returns on other pension assets, led to a burgeoning of buy-to-let by older, wealthier baby-boomers able to leverage further already high levels of (largely unearned) housing capital. This growing market rental provision was more than matched by growing rental demands, from frustrated potential buyers, immigrants, students and those queuing for social housing. With rents rising ahead of incomes it was poorer renters who suffered the worst outcomes.

The Shaping Futures group concluded that these processes within and across the ABC countries had exacerbated inequalities in income and wealth, contributed to the displacement of lower income households to less accessible metropolitan edges, raised commute times, costs and carbon consequences and reduced productivity in the economy.

Principles for Policies
Shaping Futures, through its knowledge exchange and curated policy debate across three countries, has contributed both to new research on housing and productivity but placed key findings at the heart of policy-making in Ottawa and Canberra. Current and changing policy debates surround both the ‘big policy settings’, including the taxation of housing and capital gains, the limits to monetary policy, and post 1980’s views towards public sector roles in land supply and planning. The Shaping Futures group, largely consisting of housing providers, regarded as naively simplistic the notion that municipal planning controls lay at the heart of the housing crisis. The absence of strategic policy capacities, undeveloped institutions, missing metropolitan autonomies, limits on infrastructure investment and market failures in the construction sector all appeared to play roles in the reality if not the theory of metropolitan housing and economic change. New roles for non-profits in investing in places and mixing tenure options were regarded as critical to better futures for urban, and rural residents.

The key learnings of Shaping Futures demonstrate the value of co-produced research and knowledge exchange across academia, non-profits and local and national governments from the project’s outset. Fresh thinking that spans the local, national and international context from these partners allowed the project to develop ten principles for housing policy and tax reform, intended to provide a coherent framework for reforming housing policies. The policy proposals reflect the need for an enduring framework of consensual approaches that form a path towards better performing housing systems in all three countries.

To read the full report Shaping Futures: Changing the Housing Story and the summary report, please go to the Shaping Futures website .

Professor Duncan Maclennan is an applied economist with interests in cities, neighbourhoods, infrastructure and housing. He is currently Professor of Public Policy at the University of Glasgow where he is affiliated with Policy Scotland. He is also Professor of Strategic Urban Management and Finance at the University of St Andrews and a Professorial Research Fellow in Urban Economics at the University of New South Wales, Sydney.

Author: Prof Duncan Maclennan, Professor of Public Policy at the University of Glasgow

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