A study from Italy has questioned how the country’s affordable rents policy is working in practice.
Italy part-funds construction of new affordable housing for people on lower incomes. This housing is termed ‘social housing’ although it isn’t intended for people in the greatest need and poverty. Instead it’s created for people in an intermediate situation who can afford modest rents but not full market prices.
The rent for the affordable housing is set relative to a benchmark in each locality. The benchmark rent is agreed between national landlords and tenants’ associations in a process promoted by local authorities and regulated by government. They decide what is an acceptable benchmark rent within each of a number of zones for each city. Type and condition of the housing is taken into account. The rents should therefore reflect local conditions. Landlords who agree to set their rents according to the benchmark receive tax breaks. However, not all providers are part of the system.
The researchers noted that the great majority of social housing schemes and most of the funding has gone to northern and central Italy, with few schemes in the south. They chose two examples: Milan in the more prosperous north, and Bari in the economically disadvantaged south.
They found that in Bari the systems worked as planned and affordable rents remained relatively low. In contrast, ‘affordable’ rents in Milan often ended up being higher than market rents. The Milan schemes therefore were “failing to meet the primary goal of the law” to create affordable homes.
The researchers conclude: “The use of the agreed rents as benchmark rents for social housing causes inefficiencies and spatial inequalities.”
Social Housing and Affordable Rent: The Effectiveness of Legal Thresholds of Rents in Two Italian Metropolitan Cities
Grazia Napoli, Maria Rosa Trovato and Simona Barbaro
