Changing Social Housing: Economic System Issues

Over the last quarter century there has been a series of major shifts in policies for the organisation and ownership of social rented housing in Britain. the non-market housing sector is moving towards a more plural, decentralised and potentially contestable set of arrangements. Many of the reforms have echoes in recent changes to the housing systems of transition economies. This paper aims to set the reforms in context, explain their key economic and financial aspects and assess the likely implications of the alternative organisational models proposed. Much of the policy has been developed without recourse to systematic evidence about different systems costs and benefits. Economic analysis of non-market housing systems has focussed on questions of the legitimacy of sector existence, cost contrasts with other tenures and subsidy distribution rather than the optimal economic organisation issues that arise given the actual existence of a social housing system. the paper applies ideas drawn from the economics of industrial organisation and neo-institutional economics to the emerging models of social housing, not least to develop a series of evaluative criteria with which to analyse new policies.