Comparing Housing Systems: Housing Performance and Housing Policy in the United States and Britain

The increase in home-ownership in both countries undoubtedly reflects rising household income over time. However, other countries, such as Sweden and Switzerland, have comparable standards of living but much lower rates of home-ownership than the United States and Britain. Therefore the high rates of home-ownership cannot be attributed entirely to standard of living. There must be cultural and policy factors involved. In fact, encouragement of home-ownership has been an important policy objective in both the United States and Britain. Both governments see home-ownership as the most desirable form of tenure, from the point of view of individuals and government. While promotion of home-ownership has had a longer, more explicit, and consistent place on the housing policy agenda in the United States, it has received increasing emphasis in Britain in the post-war period, culminating in the radical measures introduced by the Thatcher government after 1979.

The effect of the various measures used to promote homeownership is likely to have been substantial. Hendershot and Shilling estimate that, between 1963 and 1979, the number of home-owners in the United States was nearly 50 per cent more than it would have been without the financial incentives to homeownership (cited in HUD 1981a: 36). In both countries the most powerful stimulus has been the preferential tax treatment of homeownership, though there have also been other policies which have been aimed specifically at extending home-ownership to lowerincome households or, in Britain, to council tenants.

In both the United States and Britain the fact that home-owners can deduct mortgage interest payments from their gross income for income-tax purposes provides a substantial public policy incentive for households to own rather than to rent their residence. (The

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