Government housing policies are harming the poor

State intervention reduces choice and traps low income families in appalling conditions

Policies designed to provide low-cost housing for the poor have in reality reduced choice and trapped many in appalling conditions, argues a new study published today by the Institute of Economic Affairs*. Prescriptive state intervention has manifestly failed to provide for the diverse needs of individual low-income households, yet the current UK government is increasing the level of government control over housing.

The authors, led by housing expert Dr Peter King**, argue that instead of government seeking to provide housing itself, it should play the role of facilitator. It can provide resources, put in place the general framework and ensure that contracts are enforceable and protected. The findings are based on case studies from both the developed and developing world.

In the UK, a thriving and successful voluntary sector was undermined by state action, which produced the vast concrete slums of the 1960s and 1970s and helped trap millions in welfare dependency. Similarly, in the USA, government intervention proved disastrous with the construction of housing projects that rapidly became crime-ridden and uninhabitable.

In sub-Saharan Africa, aid organisations and international bodies have called for strong government action to deal with informal settlements. But state intervention has imposed a maze of regulations and administrative barriers to formal-sector housing entrepreneurs, driving citizens into squatter camps. In India, resettlement programmes have often deprived residents of their livelihoods by failing to recognise the importance of economic activity in slum areas.

While in developed countries there have been moves to increase the level of choice available to social housing tenants, this has been undermined in practice by a shortage of dwellings and strict allocation systems.

*
Housing for the Poor: The Role of Government
, Economic Affairs, Vol. 28, No. 2, Institute of Economic Affairs, London, UK. Price £7.50.

**Dr. Peter King is Reader in Social Thought at the Centre for Comparative Housing Research, De Montfort University, Leicester.

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