Private finance for social housing in Australia

Abstract

A significant change in the finance of social housing in the 1980s was a movement to transfer responsibility for funding to the private sector. This article argues that governments must continue to be involved in social housing finance as this movement progresses. Financing initiatives undertaken in Australia are used to signal the risks associated with the provision of social housing finance, to illustrate the mechanisms employed to manage these risks, and to highlight the conflicts that arise when a mix of public and private funding is attempted.

The article proposes the introduction of “equity bonds” as an innovative way to raise funds for social housing and to overcome inefficiencies arising from the present complex and costly administrative structures. However, a commitment to ongoing subsidies to close the full rental gap is necessary for equity bonds to serve those most in need.     

Covering the private parts: the (re-)nationalisation of housing finance

Abstract

Is state power or control over financial markets really withering? Most narratives/analyses of financialisation see a growing penetration of private capital into everyday life that runs parallel to the increasing power of private financial capital over state policy. Yet housing finance – mortgages – sits at the centre of banking, and banking sits at the centre of the financial system. Large-scale mortgage markets only function where the state wraps around the banking system to remove maturity risks and to limit excessive credit creation. Partial deregulation in the 1990s and 2000s created a crisis that states resolved by re-nationalising much of mortgage finance. This renewed and overwhelming state presence suggests that financialisation is a state-driven story, and that private financial power, stability and instruments require state support above and beyond contract enforcement and prudential regulation.     

当代资本主义经济新变化及其实质

二战结束以来，当代资本主义经济在多因素的影响下，发生了一系列新变化。其中既有新科技革命和经济全球化的影响，也有经济周期的作用和西方新自由主义思潮泛滥的影响，还有不平等的国际经济关系运动和社会主义影响的结果。多因素作用的结果，推动当代资本主义不断进行自我调整、变革，表现出了较强的生命力。但是，经济的新变化并不意味着资本主义的本质发生了改变，不会走向灭亡。     

The scissors crisis in public finance

The late 1970s saw the beginnings of a “scissors crisis” in public finance, i.e., a growing divergence between the expansion of government revenues and the increase in government expenditures. Unless strong measures are taken, the 1980s threaten to become the age of mega-deficits. The sluggish growth of public receipts and the buoyant development of public outlays are linked to a number of structural tendencies in the economies of the industrialized world. Efforts to close the gap have included both tax increases and expenditure cuts, but as more and more governments gain experience with the phenomenon of “fiscal cannibalism,” i.e., that taxes eat up each other, the main thrust of the counter-offensive has come to be directed against the growth of public spending. Current strategies to reinforce expenditures control include such elements as global norms, new indexing techniques, new methods of decentralizing hard choices, better methods of cash management, well-balanced policy packages, and incentives especially designed to stimulate cutbacks and policy termination.     

The role of credible commitments in state finance

Margaret Levi's Of Rule and Revenue raises a host of important problems in the theory of the state. It provides an important step in the development of a theory that combines economic and political institutions into the same framework, potentially allowing scholars to address important issues such as the divergent economic paths taken by various states. It will therefore be an important book, and warrants attention. This approach holds much promise for the development of a theory of institutional development of the state from the middle ages onward.I have tried to sketch some additional directions for the theory to develop, pointing toward the answer of questions not directly faced by Levi — or for that matter, by much of the public choice literature: How do we explain the evolution of a predatory state into one with explicit limits on its powers? How do we explain the rise of representative institutions? Answering these questions often requires looking beyond the individual state to its international context. Competition among states, especially in the form of war, plays a key role here, and has two consequences. First, a major consequence of large-scale wars was fiscal stress. At such times, even a preditory state might agree to exchange limitations on its own powers for revenue. Second, the brief discussion of early modern Europe suggests that states with limited government might have had a financial advantage over those which were not so limited. The latter played a major role in the successful Dutch revolt against Spain and in the English defeat of France.     

The public finance of healthy behavior

Lifestyle can often affect the likelihood an individual will have a future illness. Subsidies often mitigate the consequences of poor lifestyle choices. In this paper we explore tax-subsidy policies that lower the consequences of incurring ill health. We find that a funding mechanism consistent with current US policy lowers the investment in healthy lifestyles by both the wealthy, who pay taxes, and the poor, who receive subsidies. We also explore alternative policy interventions such as investing in research to lessen the impact or probability of the disease.     

The implementation of school finance reform

The reform of educational finance systems is underway in various states. The results of the reforms in early states can act as guides to the design of new finance systems in other states. Based on recent experiences in New Jersey, the authors discuss the role that policy analysis can play in aiding the school finance reform process. The results of the New Jersey reform suggest that the policy analyst must understand the behavioral responses of school districts to new aid and must take into account likely changes in the underlying economic conditions of local areas if he or she hopes to accurately assess the impacts of alternative finance proposals.     

The new demographics of housing

Abstract

During the 1990s, minorities played an increasing role in population growth throughout the United States. Fueled by international migration and by high natural increase, Asians and Hispanics have joined with blacks to greatly elevate minority contributions to population and household growth at almost every geographic level. In addition to racial and ethnic turnover, households have been changing compositionally because of the aging of the population and because of the increase in the number of unmarried adults.

This article surveys these and other demographic changes and examines their implications for household growth and housing consumption. A clearer understanding of both white and minority roles in owner and renter housing trends is developed through tracking changing consumption patterns. Distinct patterns of cohort turnover have taken place in different vintage housing stock. These trends, which have led to large net gains for minorities, are expected to continue over the next decade and beyond.     

The convergence of nonequity housing models in Canada: Changes to housing policy since 1990

Abstract

This study examines the impact of housing policy convergence on the nonequity housing system in Ontario, Canada. Ontario has four distinct nonequity housing models— public, nonprofit cooperative, municipal nonprofit, and private nonprofit. This article argues that since 1990, housing policy in Canada, and particularly in Ontario, has become increasingly influenced by the neoconservative agenda of downsizing and decentralization of government functions found in the United States.

The findings reveal that changes to housing policy have caused the convergence of nonequity housing models in the areas of management and administration. Drawing on the present findings and on an experimental project in tenant management, this article argues that the trend toward convergence will continue and will likely result in one nonequity housing model in Canada. This pattern is interpreted in light of the neoconservative agenda of both countries that emphasizes private sector solutions to housing low‐income families.     

The preservation needs of public housing

Abstract

The paper examines the preservation needs of public housing from the perspective of its physical condition and its ongoing repair and replacement needs. It begins by examining the range of needs that exist today, including the level of expenditures that would be required to put the stock in working order to meet existing codes, and to ensure the long‐term viability of the development. It then explores the level of expenditures that would be required on an ongoing basis to keep the stock in good repair and to meet future capital and preventive maintenance needs. The final section addresses several important policy issues, including overall funding requirements, the cost‐effectiveness of preservation efforts compared with vouchers and new construction, the special problems of troubled public housing authorities, and the need to establish stronger incentives for capital planning.     

The changing demography of multifamily rental housing

Abstract

The residents of multifamily rental housing are different from both homeowners and single‐family home renters, and these differences have implications for the housing market and for public policy. This article describes apartment residents today, discusses recent changes in their number and characteristics, projects their future growth and composition, and highlights business and policy implications of future changes.

For purposes of business and public policy, a segmentation of apartment residents into three submarkets is useful: the “affordable” market serving low‐ and moderate‐income households, some of which receive government housing assistance; the “lifestyle apartment market” serving higher‐income adult households; and the substantial “middle market.” The number of apartment renters is likely to grow moderately over time. The combination of multifamily structure type and rental tenure form offers unique opportunities not only for provision of affordable housing but also for revitalization of downtown areas and balanced “smart” growth in suburban areas.