Categorisation of Social Housing in EU National

The context of this document revolves around the categorization of social housing within EU national accounting rules, specifically focusing on its implications for social housing finance, provision, and the EU Affordable Housing Action Plan. It is published by EqualHouse, an organization dedicated to making housing more affordable across Europe, and authored by Michelle Norris and Bob Jordan from the Geary Institute for Public Policy at University College Dublin.

In recent years, significant changes have occurred in the categorization of social housing providers and financing mechanisms in the national accounts of various EU member states. Traditionally, many social housing providers in Northwestern European countries were classified as 'nonprofit institutions serving households' (NPISH). However, recent developments indicate a trend towards reassessing this classification, particularly in Ireland, Finland, and the Netherlands.

A 2017 survey highlighted that most social housing landlords in countries like Austria, the Netherlands, Belgium, France, Germany, and Denmark were included in the NPISH category. However, changes began in Ireland, where housing associations were reclassified into the government sector after a review in 2018. Finland also shifted its categorization in 2021, moving loans that fund social housing provision from NPISH to the government category.

This paper examines the diverse implications of these categorization changes for the provision of affordable housing across Europe. It outlines the evolution of national accounting rules and their standardization across EU countries while focusing on the rules currently utilized in the EU. The analysis reveals that these classifications significantly affect social housing sectors and their financing, ultimately impacting affordable housing policies.

The paper includes a comparative analysis of social housing in Ireland, Finland, and the Netherlands. Data shows that social housing accounts for about 10% of households in Ireland, with an increasing contribution from housing associations. In Finland, approximately 14% of homes are state-subsidized, while the Netherlands boasts the largest social housing system in Europe, comprising around 28.5% of its housing stock.

Each country has adopted distinct regulatory frameworks and funding models for social housing. Ireland relies heavily on government funding, while Finland employs interest subsidy loans to support social rental housing. The Netherlands has maintained a system where housing associations operate independently, primarily funded through private sector capital and tenant rents.

The implications of recategorization are profound, affecting government debt and fiscal policies across these nations. For instance, the recategorization of housing associations in Ireland has resulted in minimal impact on public spending figures. Conversely, the inclusion of the Dutch housing associations and their debts could significantly raise the country's debt-to-GDP ratio.

The intersection of EU fiscal governance and national accounting rules has increasingly influenced social housing policies. The ongoing debate suggests that reforms to EU fiscal rules and national accounting frameworks are essential for addressing the affordable housing crisis across member states. Without such changes, governments may struggle to meet housing needs effectively.