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ESG finance and social housing decarbonisation

Created on 05-02-2024 | Updated on 05-02-2024

The regulation of financial markets according to Environmental, Social and Governance (ESG) criteria has become a priority for the European Union (EU). Recent legislation, such as the EU Green Taxonomy, aims to identify sustainable investments enhancing transparency and accountability while steering private finance toward environmental objectives. The introduction of ESG criteria poses specific questions for Social Housing Organisations (SHOs), particularly as the decarbonisation of the housing stock is also incorporated into the national legislation of Member States. This case study analyses ESG finance in the context of social housing, examining the main legislative changes and their impact on social housing provision systems in abstract. For more detailed information, readers are invited to read the full-paper published in the Journal of Housing Studies. Link.

Instrument
Regulation

Issued (year)
2020s

Application period (years)
2020s

Scope
European-Global

Target group
NA

Housing tenure
NA

Discipline
economics-sociology-finance

Object of study
Instrument

Description

Over the last decades, ESG debt issuance, through green, social or sustainability-linked loans and bonds has become increasingly common. Financial markets have hailed the adoption of ESG indicators as a tool to align capital investments with environmental and social goals, such as the decarbonisation of the social housing stock. According to the Climate Bonds Initiative (CBI), the green debt market has experienced a 50% growth over the last five years (CBI, 2021). However, the lack of clearly established indicators and objectives has tainted the growth of green finance with a series of high-level scandals and accusations of green-washing, unjustified claims of a company’s green credentials. For example, a fraud investigation by German prosecutors into Deutsche Bank’s asset manager, DWS, has found that ESG factors were not taken into account in a large number of investments despite this being stated in the fund’s prospectus (Reuters, 2022).

To curb greenwashing and improve transparency and accountability in green investments, the EU has embarked on an ambitious legislative agenda. This includes the first classification of environmentally sustainable economic activities: the EU Green Taxonomy (Regulation 2020/852). The Taxonomy is directly linked to the European Commission’s decarbonisation strategy, the Renovation Wave (COM (2020) 662), which relies on a combination of private and public finance to secure the investment needed for the decarbonisation of social housing.

Energy efficiency targets have become increasingly stringent as the Energy Performance of Buildings Directive (EPBD) and its successive recasts (COM(2021)) have been incorporated into national legislation; see for example the French Loi Climate et Resilience (2021-1104, 2021). Consequently, capital expenses for SHOs are set to increase considerably. For example, in the Netherlands, according to a Housing Europe (2020) report, attaining the 2035 energy efficiency targets set by the Dutch government will cost €116bn.

Sustainable finance legislation constitutes an expansion of the financial measures implemented by the EU in recent decades to incentivise energy efficiency standards as well as renovations in the built environment. For more detail on prior EU policies, see Economidou et al. (2020) and Bertoldi et al. (2021). The increased connections between finance and energy performance raise specific questions regarding SHOs’ access to capital markets in light of the shift toward ESG.

The rapidly expanding finance literature on green bonds draws from econometric models to explore the links between investors’ preferences and yields (Fama & French, 2007). This body of literature on asset pricing relies on the introduction of non-pecuniary preferences in investors’ utility functions together with returns and risks to explain fluctuations in the equilibrium price of capital. Drawing from a comparison between green and conventional bonds, Hachenberg and Schiereck (2018) find evidence of the former being priced at a premium. Similarly, Zerbib (2019) also shows a low but significant negative yield premium for green bonds resulting from both investors’ environmental preferences and lower risk levels. The European Commission’s Joint Research Centre (Fatica & Panzica, 2021) documents the dependency of premiums on the issuer with significant estimates for supranational institutions and corporations, but not for financial institutions. While these econometric approaches offer relevant insight into the pricing of green bonds and the incentives for issuers and investors, they do not account for the institutional particularities of social housing, a highly regulated sector usually covered by varying forms of state guarantees and subsidisation (Lawson, 2013).

ESG-labelled debt instruments & Related Legislation

Throughout the last two decades, the term ESG finance has evolved to include a large number of financial vehicles of which green bonds have become the most popular (Cortellini & Panetta, 2021). In the social housing sector, ESG comprises a broad array of tools from sustainability-linked loans to less conventional forms of finance such as carbon credits. When it comes to bonds, there is a wide variation in the sustainability credentials among the different types. Broadly speaking, green and social bonds are issued under specific ‘use of proceeds’, which means the funds raised must be used to finance projects producing clear environmental or social benefits. The issuance of these types of bonds requires a sustainable finance framework, which is usually assessed by a third party emitting an opinion on its robustness.

Sustainability-linked bonds (SLBs) are an alternative to ‘use of proceeds’. Funds raised in this manner are not earmarked for sustainable projects, but can be used for general purposes. SLBs are linked to the attainment of certain company-wide Key Performance Indicators (KPIs), for example an average Energy Performance Certificate (EPC) rating of “C” in an SHO’s housing stock. These indicators and objectives usually result in a price premium for Sustainable Bonds, or a rebate in interest rates in the case of SLBs or sustainability-linked loans (SLLs) (Cortellini & Panetta, 2021).

While there are international standards for the categorisation of green projects such as the Green Bond Principle or the Climate Bonds Strategy, strict adherence is optional and there are few legally-binding requirements resulting in a large divergence in reporting practices and external auditing. To solve these issues and prevent greenwashing, the EU has been the first regulator to embark on the formulation of a legal framework for green finance through a series of acts targeting the labelling of economic activities, investors, corporations and financial vehicles.

First, the EU Green Taxonomy (Regulation (EU) 2020/852) is the cornerstone of this new legislation since it classifies economic activities attending to their alignment with the objectives set in the European Green Deal (EGD). When it comes to housing, the EU Taxonomy requires specific energy efficiency levels for a project to be deemed ‘taxonomy aligned’. Second, the Sustainable Finance Disclosure Regulation (SFDR) (Regulation (EU) 2019/2088) mandates ESG reporting on funds, which tend to consist of exchange-traded collections of real assets, bonds or stocks. Funds are required to self-classify under article 6 with no sustainability scope, ‘light green’ article 8 which incorporates some sustainability elements, and article 9 ‘dark green’ for funds only investing in sustainability objectives. Under the SFDR, which came into effect in January 2023, fund managers are required to report the proportion of energy inefficient real estate assets as calculated by a specific formula taking into account the proportion of ‘nearly zero-energy building’, ‘primary energy demand’ and ‘energy performance certificate’ (Conrads, 2022). Third, the Corporate Sustainability Reporting Directive (CSRD)(COM(2021) 189) increases disclosure requirements for corporations along Taxonomy lines. This legislation, which came into effect in 2023, will be progressively rolled out starting from larger and listed companies and expanding to a majority of companies this decade. Provisions have been made for charities and non-profits to be exempt. However, one of the key consequences of disclosure requirements over funds through the SFDR is its waterfall effect; that is the imposition of indirect reporting requirements as investors pass-on their reporting responsibilities to their borrowers. Fourth, the proposed EU Green Bonds Standards (EU-GBS) COM(2021) 391 aims to gear bond proceedings toward Taxonomy-aligned projects and increase transparency through detailed reporting and external reviewing by auditors certified by the European Security Markets Authorities (ESMA). The main objectives of these legislative changes is to create additionality, that is, steer new finance into green activities (see Figure 1).

 

While this new legislation is poised to increase accountability and transparency, it also aims to encourage a better management of environmental risks. According to a recent report on banking supervision by the European Central Bank (ECB), real estate is one of the major sources of risk exposure for the financial sector (ECB, 2022). This includes both physical risks, those resulting from flooding or drought and, more relevant in this case, transitional risks, that is those derived from changes in legislation such as the EPBD and transposing national legislation. The ECB points to the need for a better understanding of risk transmission channels from real estate portfolios into the financial sector through enhanced data collection and better assessments of energy efficiency, renovation costs and investing capacity. At its most extreme, non-compliance with EU regulations could result in premature devaluation and stranded assets (ECB, 2022).

In short, the introduction of reporting and oversight mechanisms connects legislation on housing’s built fabric, namely the EPBD, to financial circuits. On the one hand, the EU has been strengthening its requirements vis-à-vis energy efficiency over the last decades. The Energy Efficiency Directive (EED) suggested the introduction of Minimum Energy Performance Standards (MEPS) by Member States (Economidou et al., 2020), a rationale followed by France and the Netherlands for certain segments of the housing stock. Currently, policy-makers are debating on whether the EPBD’s recast (COM/2021/802) should incorporate MEPS and make decarbonisation an obligation for SHOs across the EU. On the other hand, legislation on green finance aims to produce incentives and oversight over investments in energy efficient renovation and new build, mobilising the private sector to cater to green projects (Renovation Wave (COM(2020) 662)). 

Alignment with project research areas

ESG finance emerges as a critical driver within the research framework of RE-DWELL, emphasizing its alignment with policy and financing strategies to address housing affordability within the energy transition, particularly for vulnerable groups. The integration of ESG principles into the research framework is pivotal, as it offers a comprehensive approach to sustainable investments that extend beyond the traditional financial metrics.

The factors at the core of ESG finance resonate in RE-DWELL's research objectives, where the focus extends beyond mere energy efficiency to encompass the broader social impact of housing affordability. By prioritizing the well-being of vulnerable demographic groups, ESG finance ensures that investments contribute not only to environmental sustainability but also to the improvement of social conditions, aligning with the overarching goals of RE-DWELL's research framework.

ESG finance's commitment to environmental considerations aligns seamlessly with the energy transition objectives outlined in RE-DWELL's research. By incorporating criteria that assess and promote energy efficiency, ESG finance directs investments towards technologies and practices that contribute to reducing carbon emissions, fostering an environmentally sustainable housing landscape.

Moreover, the emphasis on social factors within ESG criteria directly addresses the challenges faced by vulnerable groups in the context of housing affordability. By considering the social implications of investments, ESG finance becomes a strategic tool for ensuring that housing solutions are not only ecologically responsible but also inclusive and supportive of marginalized communities.

The governance component of ESG principles ensures transparency, accountability, and ethical decision-making, which are essential elements in effective policy implementation. As RE-DWELL's research framework navigates the complexities of financing solutions, the governance-focused approach of ESG finance becomes integral to establishing robust structures that facilitate responsible and sustainable housing initiatives.

In conclusion, ESG finance serves as a linchpin in the research framework of RE-DWELL, offering a holistic and integrated approach to housing affordability within the energy transition. By aligning with policy objectives and financing strategies, ESG finance transcends traditional investment metrics, contributing to a future where housing solutions are not only environmentally conscious but also socially inclusive and governed by ethical practices. This collaboration highlights the transformative potential of ESG finance in shaping sustainable and equitable housing ecosystems.

Alignment with SDGs

ESG frameworks draw directly from the SDGs. In this regard, ESG aims to deliver on all SDGs.

References

Bertoldi, P., Economidou, M., Palermo, V., Boza‐Kiss, B., & Todeschi, V. (2021). How to finance energy renovation of residential buildings: Review of current and emerging financing instruments in the EU. WIREs Energy and Environment, 10(1), e384. https://doi.org/10.1002/wene.384

CBI. (2021). $500bn Green Issuance 2021: Social and sustainable acceleration: Annual green $1tn in sight: Market expansion forecasts for 2022 and 2025. https://www.climatebonds.net/2022/01/500bn-green-issuance-2021-social-and-sustainable-acceleration-annual-green-1tn-sight-market

Clarion. (2020). Clarion Housing Group raises £350m in record breaking sustainable bond issue. https://www.clarionhg.com/news-and-media/2022/04/11/clarion-350m-in-record-breaking-sustainable-bond-issue

Cortellini, G., & Panetta, I. C. (2021). Green Bond: A Systematic Literature Review for Future Research Agendas. Journal of Risk and Financial Management, 14(12), 589. https://doi.org/10.3390/jrfm14120589

Conrads, C. (2022). Policy and regulation in the area of tension between shaping the ESG transformation and growing regulatory pressure. In T. Veith, C. Conrads, & F. Hackelberg (Eds.), ESG and Real Estate: A practical guide for the entire real estate and investment life cycle. Haufe-Lexware. https://ebookcentral-proquest-com.tudelft.idm.oclc.org/lib/delft/detail.action?docID=6998863

European Central Bank. (2022). Good practices on climate-related and environmental risk management: Observations from the 2022 thematic review. Publications Office. https://data.europa.eu/doi/10.2866/417808

Economidou, M., Todeschi, V., Bertoldi, P., D’Agostino, D., Zangheri, P., & Castellazzi, L. (2020). Review of 50 years of EU energy efficiency policies for buildings. Energy and Buildings, 225, 110322. https://doi.org/10.1016/j.enbuild.2020.110322

Fama, E. F., & French, K. R. (2007). Disagreement, tastes, and asset prices$. Journal of Financial Economics, 23.

Fatica, S., & Panzica, R. (2021). Green bonds as a tool against climate change? Business Strategy and the Environment, 30(5), 2688–2701. https://doi.org/10.1002/bse.2771

Hachenberg, B., & Schiereck, D. (2018). Are green bonds priced differently from conventional bonds? Journal of Asset Management, 19(6), 371–383. https://doi.org/10.1057/s41260-018-0088-5

Housing Europe. (2020). The Cost of the Renovation Wave. https://www.housingeurope.eu/file/948/download

Lawson, J. (2013). The use of guarantees in affordable housing investment—A selective international review. Australian Housing and Urban Research Institute.

Zerbib, O. D. (2019). The effect of pro-environmental preferences on bond prices: Evidence from green bonds. Journal of Banking & Finance, 98, 39–60. https://doi.org/10.1016/j.jbankfin.2018.10.012

Reuters. (2022). German officials raid Deutsche Bank’s DWS over “greenwashing” claims. https://www.reuters.com/business/german-police-raid-deutsche-banks-dws-unit-2022-05-31/

Related vocabulary

Building Decarbonisation

Housing Affordability

Housing Governance

Housing Policy

Housing Regime

Just Transition

Measuring Housing Affordability

Social Housing

Sustainability

Sustainability Built Environment

Area: Design, planning and building

Decarbonisation, a term which echoes through the corridors of academia, politics, practical applications, and stands at the forefront of contemporary discussions on sustainability. Intricately intertwined with concepts such as net-zero and climate neutrality, it represents a pivotal shift in our approach to environmental sustainability. In its essence, decarbonisation signifies the systematic reduction of carbon dioxide intensity, a crucial endeavour in the battle against climate change (Zachmann et al., 2021). This overview delves into the multifaceted concept of decarbonisation within the context of the European Union. Beginning with a broad perspective, we examine its implications at the macro level before homing in on the complexities of decarbonisation within the realm of building structures. Finally, we explore the literature insights, presenting key strategies that pave the way toward achieving a decarbonised building sector. From a broad perspective, decarbonisation is an overarching concept that aims to achieve climate neutrality (Zachmann et al., 2021, p.13). Climate neutrality means achieving a state of equilibrium between greenhouse gas emissions and their removal from the atmosphere, preventing any net increase in atmospheric CO2 concentration (IEA, 2022). From an energy decarbonisation perspective, however, in a document provided by the Economic, Scientific and Quality of Life Policy Department at the request of the Industry, Research and Energy (ITRE) Committee, Zachmann et al. (2021) explain that energy systems require a fundamental shift in the way societies provide, transport and consume energy (Zachmann et al., 2021). In the construct of decarbonisation, as outlined by the Intergovernmental Panel on Climate Change (IPCC), the focus lies on strategic directives aimed at reducing the carbon content of energy sources, fuels, products and services (Arvizu et al., 2011; Edenhofer et al., 2011). This complex process involves the transition from carbon-intensive behaviours, such as fossil fuel use, to low-carbon or carbon-neutral alternatives. The main goal of decarbonisation, therefore, is to reduce emissions of greenhouse gases such as CO2 and methane, which are closely linked to the growing threats of climate change (Edenhofer et al., 2011). Hoeller et al. (2023) explain that decarbonisation efforts within the Organisation for Economic Co-operation and Development (OECD) focus on harmonising economic growth, energy production and consumption with climate objectives to mitigate the adverse effects of climate change while promoting sustainable development (Hoeller et al., 2023). From a pragmatic perspective, however, according to the OECD Policy Paper 31: A framework to decarbonise the economy, published in 2022,  progress on economic decarbonisation remains suboptimal. This raises the urgent need for a multi-dimensional framework that is not only cost-effective but also inclusive and comprehensive in its strategy for decarbonisation (D’Arcangelo et al., 2022). D’Arcangelo et al. (2023) add that such framework should include several steps such as setting clear climate targets, measuring progress and identifying areas for action, delineating policy frameworks, mapping existing policies, creating enabling conditions, facilitating a smooth transition for individuals, and actively engaging the public. From an academic perspective, Weller and Tierney (2018) provide an explanation of decarbonisation, defining it as a twofold concept. Firstly, it involves reducing the intensity of fossil fuel use for energy production. Secondly, it emphasises the role of policy in mitigating the negative externalities associated with such use. They argue that decarbonisation is a politically charged policy area that needs to be 'just', while also serving a means to revitalise local economies (Weller & Tierney, 2018). Kyriacou and Burke (2020) expand on this definition, highlighting decarbonisation as the transition from a high-carbon to a low-carbon energy system. This transition is driven by the need to mitigate climate change without compromising energy security. Boute (2021), on the other hand, emphasises the long-term structural reduction of CO2 emissions as the core strategy of decarbonisation. Boute adds that the effectiveness of decarbonisation must be measured in terms of a unit of energy consumed across all activities. In the economic context, the Oxford Institute for Energy Studies concludes that decarbonisation aims to reduce the carbon intensity of an economy. This reduction is quantified as the ratio of CO2 emissions to gross domestic product (Henderson & Sen, 2021). Addressing methodological concerns, Buettner (2022) added that decarbonisation is often misused as a generic term. Moreover, Buettner highlights the diverse levels at which decarbonisation occurs, ranging from carbon neutrality (focused on reducing CO2 emissions), to climate neutrality (aiming to reduce CO2, non-fluorinated greenhouse gases, and fluorinated greenhouse gases) and, finally, to environmental neutrality (which reduces all substances negatively impacting the environment and health) (Buettner, 2022). The debate on the decarbonisation of the construction sector revolves around similar issues. The report on Decarbonising Buildings in Cities and Regions, published by the OECD in 2022, defines the concept as reducing energy consumption by improving envelope insulation, installing high performance equipment, and scaling up the use of renewable sources to meet the energy demands (OECD, P24). Another definition comes from a working paper by the OECD Economics Department, Hoeller et al. (2023) contend, it is necessary to consider direct emissions from household fossil fuel combustion and indirect emissions from the generation of electricity and district heating used by households (Hoeller et al., 2023). The comprehensive study “Decarbonising Buildings” published by the Climate Action Tracker (CAT) in 2022, defines the term as transforming the building sector to achieve net zero emissions by 2050. Achieving this goal requires various technological solutions and behavioural changes to decarbonise heating and cooling, such as energy-efficient building envelopes, heat pumps and on-site renewables (CAT, 2022). Gratiot et al. (2023) consider decarbonisation as the process of reducing or eliminating CO2 emissions that contribute to climate change from a building’s energy sources. This involves systematically shifting buildings from carbon-intensive energy sources (e.g., gas, oil and coal) to low-carbon or carbon-neutral alternatives (e.g., solar, wind and geothermal). This process includes improving the energy efficiency of buildings through better insulation, lighting and appliances (Gratiot et al., 2023). Blanco et al. (2021) consider the decarbonisation of buildings and operation of buildings. This includes enhancing the energy efficiency of buildings and minimizing embodied carbon from building materials and construction activities of greenhouse gas emissions from the construction and operation of buildings. Achieving a decarbonised building sector is a multifaceted endeavour that demands extensive efforts in several key areas, such as energy sources, building envelope, building policy and transformation funds. The objective of the energy transition is to shift from reliance on fossil fuels to clean or renewable energy sources, primarily used for heating and cooling, such as heat pumps, district heating, hydrogen (Jones, 2021). Decarbonising the building envelope, on the other hand, involves improving the energy efficiency of buildings through better insulation, lighting and appliances. It also necessitates minimising embodied carbon from building materials and construction activities (CAT, 2022; D’Arcangelo et al., 2022). Incorporating effective policies into building construction is crucial. This includes adopting of performance standards and building codes that regulate the energy use and emissions of both new and existing buildings. These regulations directly impact the extent and pace of decarbonisation (CAT, 2022; Jones, 2021). Additionally, it is essential to establish a clear vision and climate targets for the buildings sector and operationalise them with a comprehensive policy mix that encompass emissions pricing, standards, regulations and complementary measures (Jones, 2021). The most significant challenge lies in financing the transition to a decarbonised sector. Therefore, it is imperative to mobilise finance on a large scale and collaborate with industry stakeholders. This collaboration is vital to facilitate the transition, overcome barriers, and manage the costs associated with deploying low- or zero-carbon technologies (D’Arcangelo et al., 2022). In summary, the overarching concept of decarbonisation primarily targets the reduction of carbon dioxide in economic and industrial activities, with a focus on energy production and distribution systems. At the building level, the emphasis lies in integrating low-carbon or carbon-neutral systems to minimise both direct and indirect emissions. Nevertheless, the literature examined indicates that other societal aspects, including social and behavioural factors, have not been thoroughly researched. This gap in knowledge could challenge the realisation of the goal of carbon neutrality by 2050 and underscores the need for further studies in these areas.

Created on 06-11-2023

Author: M.Alsaeed (ESR5), K.Hadjri (Supervisor)

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Area: Design, planning and building

Housing can be perceived as consisting of two inseparable components: the product and the process. The product refers to the building as a physical artefact, and the process encompasses the activities required to create and manage this artefact in the long term (Turner, 1972), as cited in (Brysch & Czischke, 2021). Affordability is understood as the capability to purchase and maintain something long-term while remaining convenient for the beneficiary's resources and needs (Bogdon & Can, 1997). Housing Affordability is commonly explained as the ratio between rent and household income (Hulchanski, 1995). However, Stone (2006, p.2) proposed a broader definition of housing affordability to associate it with households' social experience and financial stability as: "An expression of the social and material experiences of people, constituted as households, in relation to their individual housing situations", ….. "Affordability expresses the challenge each household faces in balancing the cost of its actual or potential housing, on the one hand, and its non-housing expenditures, on the other, within the constraints of its income." Housing costs signify initial and periodic payments such as rent or mortgages in the case of  homeowners, housing insurance, housing taxes, and so on. On the other hand, non-housing costs include utility charges resulting from household usage, such as energy and water, as well as schools, health, and transportation (AHC, 2019; Ezennia & Hoskara, 2019). Therefore, housing affordability needs to reflect the household's capability to balance current and future costs to afford a house while maintaining other basic expenses without experiencing any financial hardship (Ezennia & Hoskara, 2019). Two close terminologies to housing affordability are  “affordable housing” and “affordability of housing”. Affordable housing is frequently mentioned in government support schemes to refer to the housing crisis and associated financial hardship. In England, affordable housing is still concerned with its financial attainability, as stated in the UK Government's official glossaries: "Housing for sale or rent, for those whose needs are not met by the market (including housing that provides a subsidised route to home ownership and/or is for essential local workers)", while also complying with other themes that maintain the affordability of housing prices in terms of rent or homeownership (Department for Levelling Up Housing and Communities, 2019). The affordability of housing, on the other hand, refers to a broader focus on the affordability of the entire housing market, whereas housing affordability specifically refers to the ability of individuals or households to afford housing. In the literature, however, the term “affordability of housing” is frequently used interchangeably with “housing affordability,” despite their differences (Robinson et al., 2006). The "affordability of housing" concerns housing as a sector in a particular region, market or residential area. It can correlate affordability with population satisfaction, accommodation types and household compositions to alert local authorities of issues such as homelessness (Kneebone & Wilkins, 2016; Emma Mulliner et al., 2013; OECD, 2021). That is why the OECD defined it as "the capacity of a country to deliver good quality housing at an accessible price for all" (OECD, n.d.). Short-term and long-term affordability are two concepts for policymakers to perceive housing affordability holistically. Short-term affordability is "concerned with financial access to a dwelling based on out-of-pocket expenses", and long-term affordability is " about the costs attributed to housing consumption" (Haffner & Heylen, 2011, p.607). The costs of housing consumption, also known as user costs, do not pertain to the monthly utility bills paid by users, but rather to the cost associated with consuming the dwelling as a housing service  (Haffner & Heylen, 2011). “Housing quality” and “housing sustainability” are crucial aspects of housing affordability, broadening its scope beyond the narrow economic perspective within the housing sector. Housing affordability needs to consider "a standard for housing quality" and "a standard of reasonableness for the price of housing consumption in relation to income" (p. 609) (Haffner & Heylen, 2011). In addition, housing affordability requires an inclusive aggregation and a transdisciplinary perspective of sustainability concerning its economic, social, and environmental facets (Ezennia & Hoskara, 2019; Perera, 2017; Salama, 2011). Shared concerns extend across the domains of housing quality, sustainability, and affordability, exhibiting intricate interrelations among them that require examination. For instance, housing quality encompasses three levels of consideration: (1) the dwelling itself as a physically built environment, (2) the household attitudes and behaviours, and (3) the surroundings, encompassing the community, neighbourhood, region, nation, and extending to global circumstances (Keall et al., 2010). On the other hand, housing sustainability embraces the triad of economic, social, and environmental aspects. The shared problems among the three domains encompass critical aspects such as health and wellbeing, fuel poverty and costly long-term maintenance  proximity to workplaces and amenities, as well as the impact of climate. Health and wellbeing Inequalities in health and wellbeing pose a significant risk to social sustainability, mainly in conditions where affordable dwellings are of poor quality. In contrast, such conditions extend the affordability problem posing increased risks to poor households harming their health, wellbeing and productivity (Garnham et al., 2022; Hick et al., 2022; Leviten-Reid et al., 2020). An illustrative example emerged during the COVID-19 pandemic, where individuals residing in unsafe and poor-quality houses faced higher rates of virus transmission and mortality (Housing Europe, 2021; OECD, 2020). Hence, addressing housing affordability necessitates recognising it as a mutually dependent relationship between housing quality and individuals (Stone, 2006). Fuel poverty and costly long-term maintenance Affordable houses of poor quality pose risks of fuel poverty and costly long-term maintenance. This risk makes them economically unsustainable. For example, good quality entails the home being energy efficient to mitigate fuel poverty. However, it might become unaffordable to heat the dwelling after paying housing costs because of its poor quality (Stone et al., 2011). Thus, affordability needs to consider potential fluctuations in non-housing prices, such as energy bills (AHC, 2019; Smith, 2007). Poor quality also can emerge from decisions made during the design and construction stages. For example, housing providers may prioritise reducing construction costs by using low-quality and less expensive materials or equipment that may lead to costly recurring maintenance and running costs over time (Emekci, 2021). Proximity to work and amenities The proximity to workplaces and amenities influences housing quality and has an impact on economic and environmental sustainability. From a financial perspective, Disney (2006) defines affordable housing as "an adequate basic standard that provides reasonable access to work opportunities and community services, and that is available at a cost which does not cause substantial hardship to the occupants". Relocating to deprived areas far from work opportunities, essential amenities, and community services will not make housing affordable (Leviten-Reid et al., 2020). Commuting to a distant workplace also incurs environmental costs. Research shows that reduced commuting significantly decreases gas emissions (Sutton-Parker, 2021). Therefore, ensuring involves careful planning when selecting housing locations, considering their impact on economic and environmental sustainability (EK Mulliner & Maliene, 2012). Moreover, design practices can contribute by providing adaptability and flexibility, enabling dwellers to work from home and generate income (Shehayeb & Kellett, 2011). Climate change's mutual impact Climate change can pose risks to housing affordability and, conversely, housing affordability can impact climate change. A house cannot be considered "affordable" if its construction and operation result in adverse environmental impacts contributing to increased CO2 emissions or climate change (Haidar & Bahammam, 2021; Salama, 2011). For a house to be environmentally sustainable, it must be low-carbon, energy-efficient, water-efficient, and climate-resilient (Holmes et al., 2019). This entails adopting strategies such as incorporating eco-friendly materials, utilizing renewable energy sources, improving energy efficiency, and implementing sustainable water management systems (Petrović et al., 2021). However, implementing these measures requires funding initiatives to support the upfront costs, leading to long-term household savings (Holmes et al., 2019). Principio del formulario Furthermore,  when houses lack quality and climate resilience, they become unaffordable. Households bear high energy costs, especially during extreme weather conditions such as heatwaves or cold spells (Holmes et al., 2019). Issues like cold homes and fuel poverty in the UK contribute to excess winter deaths (Lee et al., 2022). In this context, climate change can adversely affect families, impacting their financial well-being and health, thereby exacerbating housing affordability challenges beyond mere rent-to-income ratios.    

Created on 17-10-2023

Author: A.Elghandour (ESR4), K.Hadjri (Supervisor)

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Area: Policy and financing

The shift from ‘government’ to ‘governance’ has been debated since the early 1970s. Whilst state interventionism had been widely embraced within western societies during the post-war decades, governments gradually moved from exercising constitutional powers to acting as facilitators and cooperative partners (Rhodes, 1997). Over the course of a few decades, this resulted in governance as ‘interactive social-political forms of governing’ (Nag, 2018, p. 124).  Hira and Cohn (2003, p. 12), influenced by Keohane (2002), define governance as “the processes and institutions, both formal and informal, that guide and restrain the collective activities of a group”. Its decentralised and flexible nature could still include public actors but would also leave space for private and third-sector parties to provide services in hybrid and temporary institutional arrangements. To formulate one single definition of ‘housing governance’ as a particular mode of governance is however difficult due to its multilevel character. Housing could relate to either a family home, a housing association, or a complete local/national housing governance framework. On a household level, Wotschack (2005, p. 2) defines governance as managing “the daily time allocation of spouses by household rules and conflict handling strategies”. The work of Wijburg (2021) indicates that local/municipal governance entails a set of public interventions, strategies, policies and provisions used to provide local needs (e.g. housing supply). On the national level, Yan et al. (2021) define public rental housing (PRH) governance as “a structure of a wide range of government and non-governmental actors that act in all its phases of PRH provision from policy design to implementation and realisation”.[1] This specific definition on PRH combines the domestic definition of governance with Wijburg’s understanding of governance on the local level. Within the Chinese context, the national government provides policies and creates nationwide operational methods, whilst local governments implement and formulate the policies locally (Yan et al., 2021). Critics point out that a more decentralised governance structure complicates the public accountability of housing provision. Peters and Pierre (2006, p. 40) distinguish problems concerning the ‘isolation’ and ‘enforcement’ of accountability. The former refers to demarcation, as it is easier to measure the performance of a government housing agency directly responsible for new build and operations, than those from the private sector in an indirect role trying to stimulate and facilitate other actors and contracting out construction and operations (Shamsul Haque, 2000). The latter relates to the accountability deficit that arises when responsibility is transferred from democratically governed municipal agencies to actors without a representative institutional arrangement, and thus without control mechanisms for tenants or the wider population (Mullins, 2006). Throughout history, understanding of governing has evolved together with the role of government. The state plays a different role in capitalism, corporatism and socialism, which has varying effects on local and/or (inter)national levels. Whilst the above paragraphs describe housing governance within a democratic governance regime, transferring the conceptual debate to autocratic or hybrid regimes would pose difficulties. Thus, finding a unique definition of housing governance applicable in all spheres remains a challenge, and the specific context must be carefully considered. Important challenges remain, and as housing provision mechanisms evolve, further exploration of housing governance, especially on a municipal level, are likely to gain importance (Hoekstra, 2020). [1] “Housing provision is a physical process of creating and transferring a dwelling to its occupiers, its subsequent use and physical reproduction and at the same time, a social process dominated by the economic interests involved” ibid.

Created on 16-02-2022

Author: T.Croon (ESR11), M.Horvat (ESR6)

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Area: Policy and financing

Housing policies are usually understood in a narrow manner as social policies targeting ' expensive' housing prices through housing allowances, tax deduction or social housing allocation. However, this definition takes a different approach and draws from a larger body of economic literature to identify the wider array of policies that impact housing markets. Broadly speaking, housing markets are influenced through fiscal, macroeconomic, prudential and structural policies (Hilbers et al., 2008). These public policies have clear impacts on housing demand and supply and also often create synergies between each other. Fiscal policies have a stronger impact on income and costs through taxation and subsidies. One of the main fiscal policies with regard to housing is the mortgage interest deduction which reduces user costs for the homeowner and can produce increases in property prices (Poterba, 1984). Macroeconomic policy regulates the money supply through interest rates. Housing has usually been perceived as a conveyor belt for macroeconomic policy as the expansion of the money supply through low interest rates or quantitative easing has the potential to increase demand during recessions counteracting the procyclical behaviour of financial markets (Muellbauer, 1992). Prudential policies determine the level of risk associated with lending through Loan-to-Value (LTV) and Debt-to-Income (DTI) ratios. The Global Financial Crisis (GFC) that started in the US in 2008 is usually seen as the failure of prudential policy that resulted in the tightening of loans (Whitehead & Williams, 2017) and  drew renewed attention to housing policy from central banks, policymakers, and economists (Piazzesi et al., 2016). Structural policies regulate housing supply, this includes planning regulations and environmental standards. For example, research from the US has shown that zoning laws can have a relevant impact on housing affordability by constraining supply (Glaeser & Gyourko, 2002). While most research is conducted selectively on each of these policy interventions, there are relevant synergies between policy domains that can be identified. These policies usually work in conjunction with each other: lax prudential policies and favourable home ownership taxation together with low interest rates and tight planning controls can lead to higher property prices. Conversely, constrained lending, brick-and-mortar subsidies and higher interest rates are known to mitigate rising house prices.

Created on 01-07-2022

Author: A.Fernandez (ESR12), M.Haffner (Supervisor)

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Area: Policy and financing

The discussion on housing regimes dates back to e neo-institutional turn in policy research which occurred during the 1980s. This literature viewed institutions not so much as “formal” entities but more as the culmination of conflicting power relations, market dynamics, and ideology. The study of these dynamics could, in turn, be used to understand the variegated development of post-war welfare states, as exemplified by Esping-Andersen’s seminal Three worlds of welfare capitalism (1990). Kemeny defined the housing regime as “the social, political, and economic system of housing supply, distribution, and consumption, which determines the housing market opportunities of a certain period” (1981, p. 13). His framework follows the logic of the historical and institutional structure of society. Kemeny (2006) argues that, due to the central role of real estate in modern capitalism, housing systems follow similar paths, albeit with  different logics. Studying the emergence of regimes of a different nature between countries, he distinguished between unitary and dualized housing regimes, based on their rental-market systems, that is: (a) countries with an open private sector but with a firmly regulated public sector are characterized by a dual rental market; and (b) societies where the private and public sectors are strictly regulated have a unitary rental market. In dualist countries (primarily the Anglo-Saxon ones), homeownership is commonplace, while in countries with an integrated/unitary system (such as Germany, Netherlands, and Scandinavian countries) renting is a realistic and even competitive alternative to ownership. Kemeny highlighted that the dominance of homeownership is not organically developed but is socially and politically constructed. The above conceptualization of housing regime based on the functioning of rental market systems does not mirror the (Foucaultian) political and conflictual approach of Clapham, for whom a housing regime stands for a “set of discourses and social, economic and political practices that influence the provision, allocation, consumption [of housing] and housing outcomes in a given country” (2019, p. 24). He views policy as an arena where actors “negotiate and bargain” through discursive processes (Ruonavaara, 2020b). Clapham clearly distinguishes regime types from housing regimes. Regime types are useful for categorization since they can function as a baseline for comparative studies. However, “every housing regime is unique”(Ruonavaara, 2020b). Because of the complexity of the concept, Clapham (2019, p.17) proposes a three-stage analysis for housing policy (Figure 1). Ruonavaara (2020b) finds Clapham’s approach nuanced but too general and broad, which – according to him - makes it less applicable. On the other hand, Hegedüs (2020) considers Clapham’s (2002) housing pathway reasonable, as it describes housing provision forms as a result of interactions. In line with Clapham, he argues that “interventions within the housing system can only be understood in the context of interactions between different housing market actors” (Hegedüs, 2020, p. 569). Consequently, an analysis that only focuses on the rental sector would lead to narrowed interpretations with low explanatory power. More recently, Ruonavaara provided a new definition of housing regimes, which combines the elements of previous theories. He defined housing regime as a “set of fundamental principles according to which housing provision operates in some defined area (municipality, region, state) at a particular point in time” (2020a, p. 10). These principles are present in discourses, institutional arrangements, and political interventions. All actors have certain principles when operating in the system of housing provision at a given time and place. Housing regimes can be considered as the “principles of operation” (Ruonavaara, 2020a). In this sense, the housing regime concept faces challenges in its ability to represent an effective analytical tool for today’s housing systems. For Stephens (2020), it is necessary to rethink housing regime as a way to find middle-range theories given that current accounts of neoliberal convergence (Aalbers, 2016; Clapham, 2019) barely manage to explain the role of regime path-dependences in continuing to shape variegated housing outcomes.

Created on 24-02-2022

Author: A.Martin (ESR7), C.Verrier (ESR)

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Area: Policy and financing

Justice theory is as old as philosophical thought itself, but the contemporary debate often departs from the Rawlsian understanding of justice (Velasquez, Andre, Shanks, & Meyer, 1990). Rawls (1971) argued that societal harmony depends on the extent to which community members believe their political institutions treat them justly. His First Principle of ‘justice as fairness’ relates to equal provision of ‘basic liberties’ to the population. His Second Principle, later referred to as the ‘Difference Principle’, comprises unequal distribution of social and economic goods to the extent that it benefits “the least advantaged” (Rawls, 1971, p. 266).1[1] As this notion added an egalitarian perspective to Rawlsian justice theory, it turned out to be the most controversial element of his work (Estlund, 1996). The idea of a ‘just transition’ was built on these foundations by McCauley and Heffron (2018), who developed an integrated framework overarching the ‘environmental justice’, ‘climate justice’ and ‘energy justice’ scholarships. The term was first used by trade unions warning for mass redundancies in carbon-intensive industries due to climate policies (Hennebert & Bourque, 2011), but has acquired numerous interpretations since. This is because the major transition of the 21st century, the shift towards a low-carbon society, will be accompanied by large disturbances in the existing social order. In this context, a just transition would ensure equity and justice for those whose livelihoods are most affected (Newell & Mulvaney, 2013). A just transition implies that the ‘least advantaged’ in society are seen, heard, and compensated, which corresponds with three key dimensions conceptualised by Schlosberg (2004): distributive, recognitional, and procedural justice. Distributive justice corresponds with Rawls’ Difference Principle and comprehends the just allocation of burdens and benefits among stakeholders, ranging from money to risks to capabilities. Recognitional justice is both a condition of justice, as distributive injustice mainly emanates from lacking recognition of different starting positions, as well as a stand-alone component of justice, which includes culturally or symbolically rooted patterns of inequity in representation, interpretation, and communication (Young, 1990). Fraser (1997) stressed the distinction between three forms: cultural domination, nonrecognition (or ‘invisibility’), and disrespect (or ‘stereotyping’). Procedural justice emphasises the importance of engaging various stakeholders – especially the ‘least advantaged’ – in governance, as diversity of perspectives allows for equitable policymaking. Three elements are at the core of this procedural justice (Gillard, Snell, & Bevan, 2017): easily accessible processes, transparent decision-making with possibilities to contest and complete impartiality. A critique of the just transition discourse is that it preserves an underlying capitalist structure of power imbalance and inequality. Bouzarovski (2022) points to the extensive top- down nature of retrofit programmes such as the Green New Deal, and notes that this may collide with bottom-up forms of housing repair and material intervention. A consensus on the just transition mechanism without debate on its implementation could perpetuate the status quo, and thus neglect ‘diverse knowledges’, ‘plural pathways’ and the ‘inherently political nature of transformations’ (Scoones et al., 2020). However, as Healy and Barry (2017) note, understanding how just transition principles work in practice could benefit the act of ‘equality- proofing’ and ‘democracy-proofing’ decarbonisation decisions. Essentially, an ‘unjust transition’ in the context of affordable and sustainable housing would refer to low-income households in poorly insulated housing without the means or the autonomy to substantially improve energy efficiency. If fossil fuel prices – either by market forces or regulatory incentives – go up, it aggravates their already difficult financial situation and could even lead to severe health problems (Santamouris et al., 2014). At the same time, grants for renovations and home improvements are poorly targeted and often end up in the hands of higher income ‘free-riding’ households, having regressive distributional impacts across Europe (Schleich, 2019). But even when the strive towards a just transition is omnipresent, practice will come with dilemmas. Von Platten, Mangold, and Mjörnell (2020) argue for instance that while prioritising energy efficiency improvements among low-income households is a commendable policy objective, putting them on ‘the frontline’ of retrofit experiments may also burden them with start-up problems and economic risks. These challenges only accentuate that shaping a just transition is not an easy task. Therefore, both researchers and policymakers need to enhance their understanding of the social consequences that the transition towards low-carbon housing encompasses. Walker and Day (2012) applied Schlosberg’s dimensions to this context. They conclude that distributive injustice relates to inequality in terms of income, housing and pricing, recognitional justice to unidentified energy needs and vulnerabilities, and procedural injustice to inadequate access to policymaking. Ensuring that the European Renovation Wave is made into a just transition towards affordable and sustainable housing therefore requires an in-depth study into distributive, recognitional and procedural justice. Only then can those intertwining dimensions be addressed in policies.   [1] To illustrate his thesis, he introduces the ‘veil of ignorance’: what if we may redefine the social scheme, but without knowing our own place? Rawls believes that most people, whether from self-interest or not, would envision a society with political rights for all and limited economic and social inequality.  

Created on 03-06-2022

Author: T.Croon (ESR11)

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Area: Design, planning and building

Measuring housing affordability refers to assessing the extent to which households can secure suitable housing in relation to their financial resources and other relevant factors. To date there is no global agreement on measuring housing affordability, nor is there a single metric which comprehensively encompasses all the considerations regarding households' ability to access suitable housing in a convenient location at an affordable cost (Ezennia & Hoskara, 2019; OECD, 2021b). Several approaches exist to measure housing affordability, with two popular approaches, namely the Income Ratio Method (IRM), and the Residual Income Method (RIM) (Ezennia & Hoskara, 2019; Stone et al., 2011). Both are recommended to be accompanied by housing quality standards to evaluate what a household is paying for and a measure of housing satisfaction (Haffner & Heylen, 2011; OECD, 2021b). However, the perception of what constitutes satisfactory, quality, or affordable housing is subjective. This perception can be influenced by economic and social circumstances that policymakers may not perceive as directly relevant to housing policy (OECD, 2021b). The Income Ratio Method (IRM) is the most commonly used in policy and housing market-relevant statistics, as it is easy to measure and compare among different countries. It is based on the housing costs to income ratio defined by national authorities not to exceed a certain proportion (Haidar & Bahammam, 2021; Smith, 2007; Stone, 2006). The official EU indicator for IRM is the "Housing Cost Overburden" index. It considers households suffering from affordability issues if more than 40% of their net income is spent on housing costs (AHC, 2019; Hick et al., 2022; OECD, 2020). However, IRM has been widely criticised as it does not reflect if the household could afford non-housing costs and for how long. The focus on housing costs neglects non-housing costs of utility bills, schools, health, transportation, and so on (AHC, 2019). In this sense, Ezennia & Hoskara, (2019) investigation of the weaknesses of measuring housing affordability emphasised the need to reflect a household's capability to balance current and future costs to attain a house – "access to a house at a certain period" while maintaining other basic expenses without experiencing any financial hardship. The Residual Income Method (RIM) is the second dominant approach. It recognises that after paying the housing costs, a household might be unable to satisfy its non-housing requirements. Thus, the RIM is the remaining income after subtracting housing costs, based on the idea that Housing Affordability is the households' ability to cover their housing costs while still being able to pay their non-housing expenditures (Stone et al., 2011; Stone, 2006). The residual income method took a step closer to resonating with non-housing costs. However, both Haffner & Heylen (2011) and Bramley (2012) advised that the IRM and RIM approaches "are not interchangeable" and need to be combined to provide a comprehensive perception of housing affordability. This combination becomes apparent when comparing both for different household compositions, health, or work conditions. For instance, a house might be affordable when measured using the IRM from the housing costs standpoint, but it might not be affordable utilising the RIM, which is connected with non-housing costs. This combination is referred to as the Composite Method from which several advanced economic modelling approaches to measure housing affordability were developed (Ezennia & Hoskara, 2019). However, relying solely on economic criteria to assess affordability and thus overlooking quality and sustainability may not prove sufficient. A poor-quality house can impose hardships on its residents, and an unsustainable dwelling can strain the environment. Mitigating this issue may involve complementing affordability measurements with indicators reflecting housing quality and sustainability to expand the purely economic view (Ezennia & Hoskara, 2019; Haffner & Heylen, 2011; Mulliner et al., 2013; Salama, 2011). Various indicators can be used to assess housing quality beyond just its cost. These indicators could be seen as serving three primary purposes: (1) to measure the quality of a housing scheme and compare it to others within a country (Homes and Communities Agency, 2011), (2) to measure the quality of housing in one country and compare it to other countries (OECD, 2021b), and (3) to measure housing satisfaction across groups (OECD, 2021a; Riazi & Emami, 2018). An example of the first purpose is England's Housing Quality Indicators (HQIs) system (Homes and Communities Agency, 2011), which is currently withdrawn. HQIs served  as “ measurement and assessment tool to evaluate housing schemes on the basis of quality rather than just cost” design standards mandated for affordable housing providers funded through the National Affordable Housing Programme from 2008 to 2011 and the Affordable Homes Programme from 2011 to 2015. The system comprised ten indicators, which can be categorized into four groups. The first category focused on the location and proximity to amenities and services. The second dealt with site-related aspects such as landscaping, open spaces, and pathways. The third pertained to the housing unit itself, encompassing factors like noise, lighting, accessibility, and sustainability. Lastly, the fourth category addressed the external environment (Homes and Communities Agency, 2011). To enable meaningful cross-country comparisons, it is crucial that the data used for measuring and assessing these indicators are both available and up-to-date. However, it is important to acknowledge that this may not be the case in all countries, as pointed out by the OECD in 2021 (OECD, 2021b). Consequently, to accurately determine what residents are paying for in terms of quality and to facilitate meaningful comparisons, the OECD 2021 Policy Brief on Affordable Housing has emphasized the necessity of two additional housing quality indicators to complement affordability measurements. The first proposed indicator is the "Overcrowding Rate," which evaluates whether a dwelling provides sufficient space for household members based on their composition. This metric assesses whether residents have adequate living space according to the size and structure of their household. The second indicator is the "Housing Deprivation Rates," which gauge inadequate housing conditions. This encompasses issues related to maintenance, such as roofs, walls, floors, foundations, and deteriorating window frames. Moreover, these rates consider the absence of essential amenities, including sanitary facilities. By taking all these factors into account, this indicator offers a comprehensive perspective on the overall quality and habitability of housing in a specific area. Considering subjective measures of housing affordability can be advantageous when assessing housing affordability and quality based on household perceptions. These measures aim to capture housing satisfaction, reflecting the quality of the dwelling as accommodation (OECD, 2021a). In a broader context, housing satisfaction might be termed residential satisfaction, encompassing not just the dwelling but also its surroundings, including places and people. Residential satisfaction assesses how well the current residence and surrounding environment align with the household's desired living conditions (Riazi & Emami, 2018). Therefore, incorporating subjective measures is valuable in assessing housing affordability, helping to identify the determinants of housing satisfaction. Indicators such as satisfaction with the availability of good and affordable housing are crucial aspects to consider in this context (OECD, 2021a). When it comes to sustainability indicators, incorporating them into the measurement of housing affordability remains a wicked  problem. Finding a single comprehensive measure that encompasses the multifaceted aspects of sustainability related to housing affordability is challenging. The technical complexity stems from the necessity to integrate assessments of household characteristics, environmental impacts, financing, and financial aspects, along with housing stress factors. This challenge is exacerbated by the persistent fluctuations in housing prices and recurring expenses like water and energy bills (AHC, 2019). Hence, easily calculable methods such as the Income-to-Rent Ratio (IRM) and Residual Income Model (RIM) continue to be widely used for assessing housing affordability from a top-down perspective at a macro level. Although imperfect, these methods still provide valuable support for policy decision-making to a certain extent (AHC, 2019; Haffner & Heylen, 2011; OECD, 2021a).   

Created on 17-10-2023

Author: A.Elghandour (ESR4), K.Hadjri (Supervisor)

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Area: Policy and financing

A universal definition of social housing is difficult, as it is a country-specific and locally contextualised topic (Braga & Palvarini, 2013). This review of the concept focuses on social housing in the context of the UK from the late 1980s, which Malpass (2005) refers to as the phase of ‘restructuring the housing and welfare state’, to the early 2000s, known as the phase of the ‘new organisation of social housing’. In response to previous demands for housing, such as those arising during the Industrial Revolution, and recognising the persistent need to address the substandard quality of housing provided by private landlords in the UK (Scanlon et al., 2015), the primary objective of social housing has historically been to enhance the overall health conditions of workers and low-income populations (Malpass, 2014; Scanlon et al., 2015). However, this philanthropic approach to social housing changed after the Second World War when it became a key instrument to address the housing demand crisis. Private initiatives, housing associations, cooperatives and local governments then became responsible for providing social housing (Carswell, 2012; Scanlon et al., 2015). Social housing in the UK can be viewed from two perspectives: the legal and the academic (Granath Hansson & Lundgren, 2019). Along these two perspectives, social housing is often analysed based on four main criteria: the legal status of the landlord or provider, the tenancy system or tenure, the funding mechanism or subsidies, and the target group or beneficiaries (Braga & Palvarini, 2013; Carswell, 2012; Granath Hansson & Lundgren, 2019). From a legal perspective, social housing maintained its original goals of affordability and accessibility during the restructuring period in the late 1980s. However, citing the economic crisis, the responsibility for developing social housing shifted from local authorities to non-municipal providers with highly regulated practices aligned with the managerialist approach of the welfare state (Granath Hansson & Lundgren, 2019; Malpass, 2005; Malpass & Victory, 2010). Despite the several housing policy reviews and government changes, current definitions of social housing have maintained the same approach as during the restructuring period. Section 68 of the Housing and Regeneration Act 2008, updated in 2017, defines social housing as low-cost accommodation provided to people whose rental or ownership needs are not met by the commercial market (HoC, 2008; 2017, pp. 50-51). The Regulator of Social Housing, formerly the Homes and Communities Agency, has adopted the earlier definition of social housing and clarified which organisations provide it across the UK. These organisations include local authorities, not-for-profit housing associations, cooperatives, and for-profit organisations (RSH, 2021). In contrast, the National Housing Federation emphasises the affordability of social housing regardless of the type of tenure or provider (NHF, 2021). From an academic perspective, Malpass (2005) explains that during the restructuring phase, social housing was defined as a welfare-supported service – although it did have limitations, which meant that funding principles shifted from general subsidy to means-tested support for housing costs only, which later formed the basis for the Right to Buy Act introduced by the Thatcher government in the early 1980s (Malpass, 2005, 2008). The restructuring phase, however, came as a response to the housing 'bifurcation' process that began in the mid-1970s and accelerated sharply from the 1980s to 1990s (Kleinman et al., 1998; Malpass, 2005). During this phase, the role of social housing in the housing system was predominantly residual, with greater emphasis placed on market-based solutions, and social housing ownership concerned both local authorities and housing associations (Malpass & Victory, 2010). This mix has influenced the perception of social housing in the 'new organisation' phase as a framework that regulates public housing intervention for specific groups and focuses on enabling non-municipal providers (Malpass, 2005, 2008; Malpass & Victory, 2010). Currently, as Carswell (2012) explains, social housing plays an important role in nurturing a variety of initiatives aimed at providing ‘good-quality’ and ‘affordable’ housing for vulnerable and low-income groups (Carswell, 2012). Oyebanji (2014) sees social housing as any form of government-regulated housing provided by public institutions, including non-profit organisations (Oyebanji, 2014). Additionally, Bengtsson (2017) describes social housing as a system that aims to provide households with limited means, but only after their need has been confirmed through testing (Bengtsson, B, 2017 as cited in Granath Hansson & Lundgren, 2019). To a great extent, social housing in the UK can be seen as a service system that is intricately linked to the welfare state and influenced by political, economic, and social components. Despite being somehow determined by common factors and actors,  the relationship between social housing and the welfare state can sometimes be complex and subject to fluctuations (Malpass, 2008). In this context, the government plays a vital role in shaping and implementing the mechanisms and practices of social housing. While the pre-restructuring phase focused on meeting the needs of the people by increasing subsidies and introducing the right to buy (Stamsø, 2010), the aim of the restructuring phase was to meet the needs of the market by promoting economic growth (privatisation, market-oriented policies and reducing the role of local authorities) (Stamsø, 2010; Malpass, 2005) . The new organisational phase, on the other hand, works to meet and balance the needs of all, with people, politics and the economy becoming more intertwined. Welfare reform legislation passed in 2010 aims to enable people to meet their needs, but through 'responsible' subsidies, leading to a new policy stance that has been described as 'neoliberal' thinking (Hickman et al., 2018). However, there are still no strict legal requirements for the organisation and development of social housing as an independent service system, and most of the barriers to development are closely related to the political orientation of the government, rapid changes in housing policy and challenges arising from providers' perceptions of existing housing policy structures (Stasiak et al., 2021).

Created on 17-06-2023

Author: M.Alsaeed (ESR5), K.Hadjri (Supervisor)

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Area: Community participation

Sustainability is primarily defined as 'the idea that goods and services should be produced in ways that do not use resources that cannot be replaced and that do not damage the environment' (Cambridge Advanced Learner’s Dictionary & Thesaurus, n.d.) and is often used interchangeably with the term “sustainable development”(Aras & Crowther, 2009). As defined by the UN, sustainable development is the effort to “meet the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations, 1987) and is often interpreted as the strategies adopted towards sustainability with the latter being the overall goal/vision (Diesendorf, 2000). Both of these relatively general and often ambiguous terms have been a focal point for the past 20 years for researchers, policy makers, corporations as well as local communities, and activist groups, among others, (Purvis et al., 2019). The ambiguity and vagueness that characterise both of these terms have contributed to their leap into the global mainstream as well as the broad political consensus regarding their value and significance (Mebratu, 1998; Purvis et al., 2019), rendering them one of the dominant discourses in environmental, socio-political and economic issues (Tulloch, 2013). It is, however, highly contested whether their institutionalisation is a positive development. Tulloch, and Tulloch & Nielson (2013; 2014) argue that these terms -as they are currently understood- are the outcome of the “[colonisation of] environmentalist thought and action” which, during the 1960s and 1970s, argued that economic growth and ecological sustainability within the capitalist system were contradictory pursuits. This “colonisation” resulted in the disempowerment of such discourses and their subsequent “[subordination] to neoliberal hegemony” (Tulloch & Neilson, 2014, p. 26). Thus, sustainability and sustainable development, when articulated within neoliberalism, not only reinforce such disempowerment, through practices such as greenwashing, but also fail to address the intrinsic issues of a system that operates on, safeguards, and prioritises economic profit over social and ecological well-being (Jakobsen, 2022). Murray Bookchin (1982), in “The Ecology of Freedom” contends that social and environmental issues are profoundly entangled, and their origin can be traced to the notions of hierarchy and domination. Bookchin perceives the exploitative relationship with nature as a direct outcome of the development of hierarchies within early human societies and their proliferation ever since. In order to re-radicalise sustainability, we need to undertake the utopian task of revisiting our intra-relating, breaking down these hierarchical relations, and re-stitching our social fabric. The intra-relating between and within the molecules of a society (i.e. the different communities it consists of) determines how sustainability is understood and practised (or performed), both within these communities and within the society they form. In other words, a reconfigured, non-hierarchical, non-dominating intra-relationship is the element that can allow for an equitable, long-term setting for human activity in symbiosis with nature (Dempsey et al., 2011, p. 290). By encouraging, striving for, and providing the necessary space for all voices to be heard, for friction and empathy to occur, the aforementioned long-term setting for human activity based on a non-hierarchical, non-dominating intra-relating is strengthened, which augments the need for various forms of community participation in decision-making, from consulting to controlling. From the standpoint of spatial design and architecture, community participation is already acknowledged as being of inherent value in empowering communities (Jenkins & Forsyth, 2009), while inclusion in all facets of creation, and community control in management and maintenance can improve well-being and social reproduction (Newton & Rocco, 2022; Turner, 1982). However, much like sustainability, community participation has been co-opted by the neoliberal hegemony; often used as a “front” for legitimising political agendas or as panacea to all design problems, community participation has been heavily losing its significance as a force of social change (Smith & Iversen, 2018), thus becoming a depoliticised, romanticised prop. Marcus Miessen (2011) has developed a critical standpoint towards what is being labelled as participation; instead of a systematic effort to find common ground and/or reach consensus, participation through a cross-benching approach could be a way to create enclaves of disruption, i.e. processes where hierarchy and power relations are questioned, design becomes post-consensual spatial agency and participation turns into a fertile ground for internal struggle and contestation. Through this cross-benching premise, community participation is transformed into a re-politicised spatial force. In this context, design serves as a tool of expressing new imaginaries that stand against the reproduction of the neoliberal spatial discourse. Thus, sustainability through community participation could be defined as the politicised effort to question, deconstruct and dismantle the concept of dominance by reconfiguring the process of intra-relating between humans and non-humans alike.

Created on 08-06-2022

Author: E.Roussou (ESR9)

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Area: Design, planning and building

Sustainability of the built environment The emergence of the contemporary environmental movement between the 1960s and 1970s and its proposals to remedy the consequences of pollution can be seen as one of the first steps in addressing environmental problems (Scoones, 2007). However, the term “sustainable” only gained wider currency when it was introduced into political discourse by the Club of Rome with its 1972 report “The Limits to Growth”, in which the proposal to change growth trends to be sustainable in the far future was put forward (Grober, 2007; Kopnina & Shoreman-Ouimet, 2015a; Meadows et al., 1972). Since then, the use of the term has grown rapidly, especially after the publication of the 1978 report “Our Common Future”, which became a cornerstone of debates on sustainability and sustainable development (Brundtland et al., 1987; Kopnina & Shoreman-Ouimet, 2015a). Although the two terms are often used indistinctively, the former refers to managing resources without depleting them for future generations, while the latter aims to improve long-term economic well-being and quality of life without compromising the ability of future generations to meet their needs (Kopnina & Shoreman-Ouimet, 2015b; UNESCO, 2015). The Brundtland Report paved the way for the 1992 Earth Summit, which concluded that an effective balance must be found between consumption and conservation of natural resources (Scoones, 2007). In 2000, the United Nations General Assembly published the 8 Millennium Development Goals (UN, 2000), which led to the 17 Sustainable Development Goals (SDGs) published in 2016 (UN, 2016). The 17 SDGs call on all countries to mobilise their efforts to end all forms of poverty, tackle inequalities and combat climate change (UN, 2020; UNDP, 2018). Despite the rapidly growing literature on sustainability, the term remains ambiguous and lacks a clear conceptual foundation (Grober, 2007; Purvis et al., 2019). Murphy (2012) suggests that when defining sustainability, the question should be: Sustainability, of what? However, one of the most prominent interpretations of sustainability is the three pillars concept, which describes the interaction between the social, economic and environmental components of society (Purvis et al., 2019). The environmental pillar aims to improve human well-being by protecting natural capital -e.g. land, air and water- (Morelli, 2011). The economic sustainability pillar focuses on maintaining stable economic growth without damaging natural resources (Dunphy et al., 2000). Social sustainability, on the other hand, aims to preserve social capital and create a practical social framework that provides a comprehensive view of people's needs, communities and culture (Diesendorf, 2000). This latter pillar paved the way for the creation of a fourth pillar that includes human and culture as a focal point in sustainability objectives (RMIT, 2017). Jabareen (2006) describes environmental sustainability as a dynamic, inclusive and multidisciplinary concept that overlaps with other concepts such as resilience, durability and renewability. Morelli (2011) adds that it can be applied at different levels and includes tangible and intangible issues. Portney (2015) takes Morelli's explanation further and advocates that environmental sustainability should also promote industrial efficiency without compromising society's ability to develop (Morelli, 2011; Portney, 2015). Measuring the built environment sustainability level is a complex process that deploys quantitative methods, including (1) indexes (e.g. energy efficiency rate), (2) indicators (e.g. carbon emissions and carbon footprint), (3) benchmarks (e.g. water consumption per capita) and (4) audits (e.g. building management system efficiency) (Arjen, 2015; Berardi, 2012; James, 2014; Kubba, 2012). In recent years, several rating or certification systems and practical guides have been created and developed to measure sustainability, most notably the Building Research Establishment Environmental Assessment Method (BREEAM) introduced in the UK in 1990 (BRE, 2016) and the Leadership in Energy and Environmental Design (LEED) established in the US in 2000 (USGBC, 2018). In addition, other overlapping methodologies and certification frameworks have emerged, such as the European Performance of Buildings Directive (EPBD) in 2002 (EPB, 2003) and the European Framework for Sustainable Buildings, also known as Level(s) in 2020 (EU, 2020), amongst others. The sustainability of the built environment aims to reduce human consumption of natural resources and the production of waste while improving the health and comfort of inhabitants and thus the performance of the built environment elements such as buildings and spaces, and the infrastructure that supports human activities (Berardi, 2012; McLennan, 2004). This aim requires an effective theoretical and practical framework that encompasses at least six domains, including land, water, energy, indoor and outdoor environments, and economic and cultural preservation (Ferwati et al., 2019). More recently, other domains have been added, such as health and comfort, resource use, environmental performance, and cost-benefit and risk (EU, 2020). Sustainability of the built environment also requires comprehensive coordination between the architectural, structural, mechanical, electrical and environmental systems of buildings in the design, construction and operation phases to improve performance and avoid unnecessary resource consumption (Yates & Castro-Lacouture, 2018).

Created on 24-06-2022

Author: M.Alsaeed (ESR5), K.Hadjri (Supervisor)

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