OECD High-Level Roundtable on Policies for Better, More Affordable Housing in the Post-COVID-19 Era
High-level policymakers and stakeholders gathered for the Roundtable to discuss the housing sector's main challenges in light of the analyses and reform options laid out in the new OECD report Brick by Brick: Better Housing Policies in the Post-COVID-19 Era Exchanges focused on the following policy main questions:
• Addressing the housing-cost crisis, which has been exacerbated by post-pandemic increases in house prices, rents, domestic energy and construction costs, while the rise of remote work means many are looking for larger homes;
• Creating incentives to decarbonise housing in order to help countries meet climate objectives; and
• Securing adequate finance for home buyers and builders without generating undue risks to economic and financial stability
Participants concurred with the report's view that building more homes in high-demand areas is critical to ease pressure on house prices and rents. They flagged that doing so required making land available in the desired locations, combined with rules allowing an appropriate level of densification to avoid urban sprawl and permiting an efficient provision of public services, including connection to transport networks, and access to education and health services. In many areas, there is scope for public authorities to release public land for the development of housing and/or the repurposing of existing buildings
Participants agreed that a powerful way to improve access to housing for low- and lower-middle-income households is to expand the supply of social and affordable housing Institutional arrangements should account for the long lead times involved in developing social housing. Participants also noted that the supply of social housing requires good cooperation between national and regional/local governments. A long-term perspective is also essential for the success of schemes to fund affordable housing through notfor-profit or limited-profit institutions that rent units on a “cost-plus”, rather than market, basis and reinvest their earnings into maintenance and the development of new units.
Participants pointed to the daunting challenge of reducing housing emissions in line with climate change objectives. They highlighted that a broad mix of measures is required to ensure this energy transition in housing, including high-efficiency standards in building codes and appliance regulations (for heating and cooling systems especially), subsidies for property retrofitting and the decarbonisation of electricity supply.
Panellists underscored the challenge of providing adequate bank-based funding for decarbonising buildings They noted that financial sector development in this area has been held back by a lack of reliable, internationally comparable standards for energy-efficient buildings and financial products. An ecosystem of energy-efficient finance needs to emerge in this direction, for which global cooperation is critical
With its sheer size, housing finance can buttress or endanger macroeconomic resilience depending on the way it is structured and developed. On this question, participants shared the view that the lessons from the 2008-2009 crisis have been learnt, that risk management systems have been improved, and that large buffers have been put in place, especially at large banks, so that the banking sector overall is proving resilient to the global rise in interest rates and associated adjustments in house prices. On the demand side, mortgage borrowers are better protected from interest-rate and housing-market swings than in 20082009 thanks to the adoption or tightening of macroprudential measures, such as loan-to-value and debtservice-to-income caps. There is, however, a case for monitoring risks that can stem from asset-liability mismatches among non-bank financial institutions that offer mortgage products.
Overall, there was broad agreement among participants that housing policies play a very important role in the macroeconomy and wellbeing of citizens, while being an integral part of countries’ decarbonisation strategies to achieve their climate change goals. They also concurred that many challenges have yet to be addressed but there are policy tools and instruments that can be deployed to address those challenges with appropriate coordination and dialogue among different levels of administration and civil society.
