American and British Housing, II: Cost, Equity, Distribution, and Access
The questions we were left with at the end of the last chapter concerned the cost implications for consumers of the apparently better performance of the American housing system during the 1970s and 1980s in terms of level and quality of production, and the extent to which poorer people in the two countries shared in the advantages of good-quality housing and at what cost, relative to their incomes.
The most appropriate way of comparing family housing costs in the two countries, given differences in income levels and floating exchange rates, is to look at housing costs as a percentage of household income. For home-owners, it appears that housing costs (mortgage payments, power and fuel bills, and property taxes) constituted a slightly higher proportion of household income in the early 1980s in the United States than in Britain. Housing costs as a percentage of household income for tenants were much higher in the United States (see Table 3.1).
We turn first to an examination of the home-ownership sector. The components of home-owners' costs varied substantially between the two countries (see Table 3.2). For home-owners with mortgages, mortgage repayment constituted a much higher proportion of housing costs in the United States than in Britain (73.9 per cent of total costs for owners of existing housing in 1983, compared with 50.4 per cent of total costs in Britain). On the other hand, real-estate taxes (rates1) accounted for 17.1 per cent of____________________