Housing Affordability and Access to Housing Services, II: The Distributional Effect of Subsidies to Tenants and Other Forms of Cost Reduction Subsidies
Having considered the effects of past and present policies towards public-sector or state-subsidized housing on access to good housing for those with low incomes, we now turn to the other major instruments used to address affordability and access to housing, namely, income-related housing allowances; we shall also consider the more general question of income redistribution through welfare and social security measures. We shall then recapitulate the distributional effects of other measures designed to reduce the costs of private housing which we discussed in earlier chapters, and draw some general conclusions about trends in access and affordability.
As we have seen, the whole trend of policy in Britain is moving away from supply-side subsidies towards direct subsidies to tenants and home-owners. The degree to which housing remains affordable to lower-income households is therefore highly dependent on the generosity of the formulas upon which housing benefit and income support more generally are based. In the United States, too, there has been an almost total abandonment of supply-side subsidies of any depth, although as we shall see, housing allowances have only been introduced for a minority of tenants so far, and not for homeowners at all.
The housing benefit component of the income support system plays a much more explicit and substantial role in redistributing resources of low-income households in Britain than in the United
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