Cost is not the only barrier to housing

Writing for CityLab, Feargus O’Sullivan expresses some puzzlement over a new EU report that reports what share of people agree it is easy to find good housing at a reasonable price in various European cities. Here’s a map:
Map showing  what share of  people agree it is easy to find good housing at a reasonable price in various European cities

Feargus writes:

Predictably, it is in wealthy northern European cities where people feel that finding good value housing is toughest. Less than 19 percent of respondents in London, Paris, Berlin, Hamburg, Vienna, Munich, Stockholm, and Oslo thought affordable housing was easy to find.

But when it comes to the realities of housing affordability, how much credence can we give to this one measure, based on public opinion? In terms of perception, for example, Vienna and London appear to be on roughly the same level, even though the latter surely has far higher housing costs when compared to average income. Indeed, if you look at another map, which shows how many people are satisfied with their household’s financial situation, a rather different picture emerges.

Even though residents of Vienna and Munich expressed doubts about whether they can find affordable housing with ease, they are also among the happiest with their incomes in all of Europe, with over 83 percent of citizens in those cities responding that they were satisfied with the financial situations of their households.

To explain these results, I think we need to refer back to the actual question that was put to people, and consider that there are other barriers to ‘finding’ good housing than just the price. Rent controls and tenant-friendly regulation in places like Stockholm, Vienna and many German cities help keep the rent down below the market level, but they also make it more difficult to actually access housing at that price, because there is less turnover and landlords are more picky about who they rent to. As Kath Scanlon says here (p28) of the German rental system, “Because tenancies are indefinite, landlords are extremely selective about who they rent to: the search process can take months” – and if you don’t believe her there are some (very) detailed first-hand accounts here and here.

In London the barrier is more straightforwardly financial. Rents (and deposits) are very high, even when compared to London’s relatively high earnings. But if you’ve got the money, the process of finding a rental is relatively straightforward, and landlords are not (to my knowledge after years renting here) as picky as in German cities. Or at least, they were – things may be changing now due to the government’s misguided decision to make landlords check people’s residency status, which is likely to make access to housing more difficult for migrants or anyone who looks like one.

But this just proves the importance of non-price barriers when comparing housing systems from different countries. Unfortunately these barriers are very hard to measure, which makes questions like that in the EU survey all the more valuable.

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