Inequalities in affordability, distribution and consumption of housing are intrinsic to market economies, reflecting the class structure of these societies. The multiple ways in which the market fails to provide adequate housing for all make state provision necessary, even if interventions are often undertaken reluctantly. Thus social housing becomes unavoidably a political commodity. State provision can take different forms: direct provision, subsidies in rent or mortgage, subsidies on cost of construction undertaken by private developers, concessions to developers on prices of state land in exchange for a proportion of low-cost housing, infrastructure upgrading of privately developed squatter areas, or a combination of these strategies. The actual shape of a particular state provision is largely determined by the ideological system of the nation in question, the balance of social political forces and economic contingencies at the points when specific policies were formulated. Hence the modes of provision are likely to be divergent across nations (Kemeny, 1992) and each mode is best explained historically.
Whatever the actual mode and strategies of intervention, the materially tangible and highly visible presence of good social housing is a powerful symbolic monument which testifies to the efficacy of the government in power and contributes significantly to its legitimacy to govern. In spite of this potential for accumulating political legitimacy, continuing shrinkage of social housing appears to be the norm in capitalist societies, as the fiscal crisis of welfarism deepens in the late twentieth century. Since the 1980s, retraction from social housing is increasingly acute throughout western Europe and North America, causing analysts (Cole and Furbey, 1994; Priemus, 1995) to predict that social housing is likely to be eliminated completely by the first decade of the twenty-first century.