The Project - Scientific objectives

Basic hypothesis

The project on hand is based on the hypothesis that current processes of economic and social transformation in Europe call into question traditional forms of reproduction of social cohesion, among others on the following five levels:

In view of the far-reaching transformation of economic and employment structures, individual integration into society on the basis of occupation is a growing problem. Progressive career development with long-term employment and secure income development is being replaced by short-term employment with high risk of unemployment and income reduction.
While the resulting risk of poverty is increasing, the capacity of welfare state systems to cushion this risk is diminishing.
As a consequence of these developments the number of households which are temporarily or permanently affected by poverty and social exclusion is rising in many countries, leading to an increase in the general level of social inequality.
This growing inequality endangers social cohesion, especially in the cities where it is connected with integration problems resulting from international migration. Processes of social and ethnic segregation in urban areas lead to a high concentration of socially deprived households in particular parts of cities. This frequently sets in motion downward development spirals which further worsen the living conditions of already disadvantaged social groups.
Parallel to the above-mentioned changes, demographic and social factors which promote integration are in transformation. Two of the most important developments on this level are the increasing disappearance of traditional forms of partnership and how the generations live together as well as ageing societies.

The five above-mentioned phenomena are interconnected in many ways and point towards common causes. They cannot be seen as the coincidental appearance of individual social problems but rather as a general crisis of social cohesion caused by the social and economic system. This crisis is so all-encompassing that all social groups are affected by it. It is therefore no longer possible to assume that there is an unquestioned integrated core in society which can be contrasted to marginal groups who need to be integrated.

Two further basic assumptions

A second basic assumption is opposed to the basic hypothesis on the general crisis of social cohesion. This says that the housing provision system fulfils extremely important functions in the continual reproduction of social cohesion, which should be made clear by the following:
From an economic perspective the integration of the individual into society takes place on the one hand in the sphere of production and on the other in that of consumption. The dwelling has a special position among all consumer goods both because it is indispensable and because of the exceptionally high investment required for its production. On society level, this exceptional position leads to the establishment of mechanisms which support individual households in solving their housing problems. In doing so, market mechanisms which operate in the consumption of other goods are partially set out of force. On the part of the households this extraordinary position is expressed in the fact that the way in which they buy or rent their accommodation has serious long-term effects on individual lives since it not only influences saving behaviour, consumption and leisure time activities but also mobility.
However, the housing system not only determines the behavioural scope of individuals in the direct way mentioned above. It has a further indirect influence on opportunities because it determines the distribution of households of various social levels and ethnic origin within development areas by establishing the conditions of supply and demand of housing. It determines the distribution of various types of housing within sub-regions of housing developments on the one hand, while on the other it defines to what extent individual demographic groups have access to sub-segments of existing housing. The combination of these two control mechanisms results in highly specific patterns of social and ethnic segregation which have a determining influence on the quality of life in individual residential areas.
Since the influence of segregation on the quality of life in urban areas is more visible due to the very high population density, the hypothesis that the integration capacity of housing systems is of greater significance in urban areas can be formulated as the third basic assumption.

The four main questions

It follows from the high relevance of housing systems for the reproduction of social cohesion that these also have a decisive role to play in overcoming the current crisis of social integration. Against this background, the proposed project intends to answer the following four main questions.

To what extent do the various housing provision systems contribute to reducing the risks of poverty from the point of view of affected households or how far do they increase these risks?
To what extent are the various housing provision systems able to cope with the current transformation of family and demographic structures or to what extent do they increase the problems for individual households resulting from this transformation?
To what extent do the various housing systems contribute to reducing the emerging dangers in many urban areas resulting from increasing social inequality and international migration or to what extent do they increase these dangers?
What measures within the competence of housing systems could reduce problems arising from increasing risks of poverty, the transformation of family and demographic structures and growing social and ethnic inequality?

Illustration of the questions with examples

In order to illustrate the importance of these questions, the following examples are intended to highlight the relationship between housing provision structures on the one hand and increasing risks of poverty, the transformation of family and demographic structures and segregation on the other. At the same time, the themes touched upon outline important dimensions to be taken into account by this project in comparing the housing systems of the individual countries.

The influence of housing costs on the spending power of socially deprived households

Housing costs considerably reduce disposable income and the proportion of housing costs to household income is generally higher among lower income groups than among the better off. However, the scale of this additional burden on the socially deprived depends upon the housing system. This therefore has a decisive influence on the differences in spending power between the various social groups.

Housing costs and risks to income

While household incomes are becoming increasingly unstable, housing costs agreed in long-term contracts or mortgages are at a fixed level. However, a wide range of measures can be implemented which adjust the level of housing costs in relation to the current level of household income. These provisions consist of the establishment of special grants, repayment conditions adapted to income level for subsidised loans or other relevant measures. The more a housing system has a range of measures at its disposal to connect the level of household income to housing costs, the more it will be able to cope with the growing insecurity in income development.

Barriers to mobility as poverty traps

Low mobility is a determining factor in the creation of 'poverty traps' in two respects. On the one hand it means that there is less inclination to change jobs, thereby reducing the scope of a household to take advantage of opportunities to improve or secure income levels, and on the other, reducing housing costs by moving into cheaper accommodation can be an important individual strategy for absorbing temporary or permanent reductions in income. It is true that degrees of mobility are influenced by numerous social factors but in each case the housing system plays a decisive role. Two important barriers to mobility are outlined below as examples.

Empirical studies have demonstrated that a high proportion of owner-occupied housing has a negative influence on mobility. This is not only connected to emotional ties to the property but also to the difficulties involved in selling or renting out a dwelling which is no longer needed. The problem is particularly aggravated by the fact that property values sink in regions where poor economic conditions motivate households to want to move to another area.
In the field of rented property, mobility is considerably inhibited if price differences between older and newer accommodation are too great. Certain price differences based upon the age of property can be observed everywhere. However, numerous special factors can magnify or reduce these differences and thereby exert a structural influence on the readiness of households to move. Price liberalisation measures, which apply only to newly agreed rent contracts but not to existing ones are a relevant example. Another example is the successive cuts in the level of subsidy measures which increase the price of new housing in comparison to older dwellings. A contrary example is the formation of so-called rent pools which can balance the effects of sinking subsidies.

Mobility barriers as obstacles in the transformation of family structures

Housing system structures which promote or restrict mobility are not only significant in overcoming risks to employment and income but are also highly relevant for the measures made necessary by social and demographic change. For instance, the appearance of a varied range of new forms of living together which are successively taking the place of the traditional family creates the need for the affected individuals to adapt their living conditions as easily as possible to fit in with the current household constellation - and this is only possible if there are no barriers to mobility.
The relationship between the generations has also been redefined in the course of the breakdown in family structures. Whereas the proportion of multi-generation households in Europe, the USA and Japan is continually decreasing, new types of three or four-generation families are coming into being in which support with mutual help and care remains in place even over great distances. With what intensity and quality this new form of 'intimacy at a distance' desired by the generations involved can be experienced is highly dependent on the housing system, whereby price differences between older and newer property or rents also play a decisive role here. Very large differences artificially further reduce the already low mobility of more elderly households since it is very difficult for them to move under these circumstances.
The ever-growing problem of insufficient occupation of housing by the elderly as a result of ageing European societies is not merely the consequence of an almost 'natural' reduction of mobility in the elderly but is caused to a great extent by the lack of a sufficiently large, attractive and reasonably priced supply of smaller flats. From an economic point of view, the resulting involuntary insufficient occupation of accommodation by the elderly amounts to a waste of residential accommodation on a giant scale.

Housing policy and segregation

Housing provision structures have a decisive influence on the extent and type of existing tendencies towards social and ethnic segregation. The relationships between them are however extremely complex, whereby particular attention should be paid to subsidy, rent and renovation policy. Some important aspects of the connection between subsidy policy and segregation are outlined below as examples.

If there is a very low amount of subsidised housing it is necessary to make an extremely selective choice between potential occupiers through a rigorous selection process and subsidy adjustments to match increased income. Although this makes the selection process more efficient it means that social housing will be occupied by a very high concentration of low income households which enormously increases the danger of creating ghettos.
In contrast, if the total volume of the subsidised housing sector is very large, a far more balanced social mix will be achieved but there is then an increased risk of subsidies being granted to those who do not fulfill the criteria.
The division of subsidy measures into a variety of forms for different income groups and types of households can alleviate the problem of a lack of effective selection but once again creates social mono-structures in the housing provided.
In this context, one of the most important forms of division of the total stock of subsidised housing is the existence of wide-ranging grants for buying property. On the one hand, the necessary deposit for owner-occupied housing amounts to an almost insurmountable barrier for socially deprived households and on the other, it is especially in this sector that indirect grants are often available to supplement direct subsidies and these principally work to the advantage of higher income groups.