Housing, regarded as one of the basic amenities of human settlements has of late, become highly individualistic and competitive. The dwelling place protects against crime and ensures healthy surroundings. On the domestic front it is an enclosure for behavioral patterns and at the societal level reinforces social bonds among its members. Taken on the economic front, it addresses segregation from other population groups and reinforces unequal access to jobs. On the whole, it is intrinsically connected to questions of redistributed justice.
At a particular point in time, large sums of money were invested in the share market. Europe witnessed a fairly good amount being invested, but unfortunately, the crash at the US share market seriously affected investors in Europe. Later on, investment with the dot.com industry grew and it was considered a safe investment. Beyond expectations, its growth plummeted resulting in huge losses. Both the share market and the dot.com industry were considered unsafe for further investments. People had only one choice – to invest in land property which was considered a lifelong investment with long-term returns. The gulf war also resulted in an increase in crude oil prices thereby people took strong decisions to invest in land property.
Agencies at various levels – land developers, lenders, investors design professionals, unions, and government agencies at various levels work hand in hand to regulate and obtain financial gain. Here, housing has the particular interest of being a market-based product or commodity. At the policy level, the government strives to attain various other objectives – chief among them are economic ones. Certain facts which are mentioned below could appear misleading as far as our topic of concern is concerned, but it is to be noted that the figures and estimates given below do arrive at a certain focus which could markedly influence our range of understanding of the subject under consideration. Rather than considering the facts as a trend in estimating real estate worth they have to be considered as plausible factors for certain differences and their influence in the discussion at hand.
Internationally, housing investments are between 2 and 8% of the general national product (GNP), between 10 and 30% of gross capital formation, between 20 and 50% of accumulated wealth, and between 10 and 40% of household expenditure. Governments can stimulate new constructions to boost employment. Housing is affected by many policies, trade, employment, public finance, social welfare, and transport. (Changes in Housing Finance and Shelter Delivery Systems).
Globalization has affected aspects of housing in different ways and degrees. It would be appropriate to examine the effects of globalization with regard to the economic status of the countries concerned. In developing countries, a vast majority of householders use their own or informal savings. ‘Globalization increases the informal economy and formal sector commercial financial institutions do not meet the housing loan needs of people living in poverty’. (Changes in Housing Finance and Shelter Delivery Systems, 78). Sadly, government programs do not readily invest in the lowest income groups leading to segregation of this group from the rest. It is seen that women play a crucial role in this regard.
Coming to countries with economies in transitions, globalization has led to deregulation of an elaborate system of rules and laws, decentralization of a strong state apparatus, increased residential mobility, and slow emergence of local housing markets. It is often noted that lack of maintenance and repair is also a fast-growing cause of concern. ‘Challenges exist in the development of a private capital market and institutional mechanism as well as legislation to construct more functional housing markets while protecting the access of low-income households to adequate housing’. (Changes in Housing Finance and Shelter Delivery Systems, 78).
Globalization has several implications in the industrialized areas where there is increased mobility of capital and the greater integration of housing finance with more general circuits of finance. Government readily plays the role of a regulator, a catalyst, and a partner. Most people in industrialized countries live in owner-occupied housing. According to a report, ‘In Germany, fewer than 40% of households live in their own homes. In Austria and Denmark including Switzerland and the Netherlands under 55% of the total population live in their own homes. Italy and Portugal have owner-occupation rates in the 67 to 68% range and Spain and Greece have approximately 80%’. (Changes in Housing Finance and Shelter Delivery Systems, 96).
These analyses specifically throw light on th4e fact that there are differences between the member states themselves when it comes to policymaking and execution. It also emphasizes that each member state in the European Union is unique with its own policies, the sole reason being regional differences. Our study would concentrate on the reasons for the rapidly escalating prices and rents in the housing sector and the individual struggle to find affordable houses with regional differences influencing it. Escalations in home prices tend from the illegal proportion of property values. Board members involved in property-related activities such as land management, constructions, valuation, and property transactions find themselves unable to answer these questions. A well functioning, affordable housing system is a vital element in a nation’s infrastructure at least as important as a road and provides to the efficiency of the economy. The cost-effectiveness of many spending programs and general welfare are the chief objectives of the housing program.
The European Federation of National Organizations working with the homeless is of the view that homelessness considers 3 inter-related issues.
- issues of governance (the relationship between the state, the market, and civil society)
- issues of provision, tenure, and access (the provision of housing in meeting demand and needs) and
- affordability issues (how these are being addressed especially for those in housing needs and at risk of homelessness) (Doherty 4).
Variations in housing quality, accessibility, and affordability in the EU and on this basis propose a typology of inter-country variations in housing conditions. Therefore housing tenure systems, finance and subsidy systems, trends, and governance arrangements are the implications of these inequalities for the EU. (Norris, 2007).
Social housing has always been more flexibly structured in organizations sometimes being controlled by municipalities and sometimes by independent bodies.
Where states were ‘providers’ – they now increasingly adopt the role of enablers, where they had little history of involvement, their new roles are taken on largely as support to the market function. Demands for a reduction in state expenditure led to curtailment in the provision of and support for social housing, especially by the state authorities. Problems of curtailed supply have been compounded by the increasing commercialization of housing associations and housing companies. It also led to the marginalization of a certain sector of society.
The EU member states are providers for housing policies. Regional differences in social and economic well-being are reflected in different patterns. Widespread urban or rural differences in most states usually with rental housing above national rates in larger urban areas. (Hungary scoops first Charlemagne Youth Prize. 2008).
It has been found that the European Housing policy is not on the political agenda of the EU. The responsibility for the aims and practical measures in housing policy rests with the individual member states themselves. This policy is referred to as the principle of the Subsidiary. According to the Amsterdam Treaty Act 136, the community and the member states shall have as their objectives, for example, the promotion of improved living and working conditions. (IUT and the EU. 2005).
The recent scenario has the principle of subsidiary concentrating the important areas as new constructions and subsidies, reconstructions and subsidies, fiscal policies, city planning the demand of a non-restriction of competition, research and scientific program on sustainable urban planning apart from several other minor projects. The foundations for a supranational housing policy already exist. The question under consideration is whether there is a trend in the EU towards a more harmonized policy. The union will result in growing competition inside the EU, and the members of the EU will lose some of their influence where it comes to fighting unemployment, inflation, and sometimes in an economic recession. This may result in keeping the subsidiary principle as each country chooses its own economic tools to tackles these problems. The EU promotes a flexible workforce in Europe and the labor markets of course are closely linked to the housing market. The unemployed cannot move to a country or region where there are job opportunities but no housing available. This creates a need for a harmonized social legislature. (IUT and the EU. 2005).
The government’s drive to build more affordable homes through efficiency gains has been threatened by a new EU ruling that will force the housing associations to comply with bureaucratic tendering regulations, they want today. The committee has ruled that the housing associations will be now judged as private bodies. As such, they will have to comply with onerous EU tendering rules every time they want to build new homes. Under the regulations, they will have to advertise all significant building and service contracts to all EU member countries through the official journal of the EU. A spokesman of the NHF (National Housing Federation) says that “Any change to the status of housing associations would affect their ability to raise investment and jeopardize numerous stands of the government’s housing policy” the ruling also damages the associations’ cherished independence. (Housing policy in the EU member state. 1996).
Ronald Regan, former US President once claimed “It is not a nation that has a government.” (Steyn, 2004).
This line is significant as it speaks for itself that the European Union comprises individual states with their own governments, regional differences, and differences in policies that have been formulated according to the geographical, economic, and political conditions. Therefore, it would be inappropriate to have a common housing policy in the European Union.
Regional differences range from the topography of the area to the basic behavioral patterns in the individuals therein. The European Union is a confederation of 27 states under a supranational structure. Disparities among them are about twice as large as that between the states of the US. The fact that there are no centralized policies accounts for the differences in all the spheres. These also influence the economic and political power of the individual member states. Every location in the European Union is different and so model policies are difficult to produce.
It is inevitable that each member state government should ensure a strong, healthy, and just society, achieve a sustainable economy, use sound science responsibly, promote good governance and enhance community development activities. It is not uncommon to note that due to regional disparities there is wealth disparity across the European Union. In its earliest days, it had aimed for balancing economic development across its many regions. Regions provide a sense of identity of place and belonging necessary for social and regional sustainability, as well as a focus for governance, policy, and action. The emergence of individual member states at various levels of economy and politics due to the sudden change from independent units to member states of a union is responsible for various regional differences. Regional disparities in topography, income, wealth, labor, unemployment, education, economic and political policies are widespread across the European Union.
Despite best efforts to coordinate these disparities, the E U still has a long way to go before it can settle down amicably into a final policy to include the member states under one union. Those states which were under communist rule before entering the Union suffered the most when they were considered. The topography is largely responsible for providing suitable areas for boosting the economy of the region. States in highland areas than valleys earn foreign exchange. It accounts for employment opportunities. Education in areas culturally and economically developed provides considerable growth in the economy and the labor force. This further enhances the scientific development of the region. Each member state formulates its own policies taking into consideration the peculiarities of its state. Providing employment opportunities is the prerequisite for sustainable growth in the region. While countries in France have developed, the lesser-known countries in Belgium struggle to cope up with the Euro, in terms of monetary benefit.
The reasons that are primarily responsible for sharp contrasts between member states of the European Union are the factors that largely bear the onus for the non -implementation of centralized policy within the European Union. As mentioned earlier, each factor that is responsible for the growth and development of the country is also responsible for formulating policies towards the development of the nation. Each member state has the power to formulate and regulate policies according to its existing policy. This means that each member state before entering the European Union had its policies that were working to the satisfaction and growth of the nation.
At this stage, it would be difficult to house a common policy to the common benefit of each member state of the union. Furthermore, the governments at the state level are well versed with the changing patterns and influences of their own states and work for the betterment of the state. It would be advisable to take guidance from the center but the formulating of policies should be the prime responsibility of the individual member state. Till the euro sustains marginal strength, and each member state attain sustainable growth, the development and execution of policies should be left to the member state due to the differences in all the socio-economic aspects I would, to conclude, get into certain facts which would not only provide an insight into the trends in the market but also enable the reader to justify the causes for differences within the member states after their inclusion into the Union. The facts mentioned should not be regarded as a study into real estate trends but as contributing factors to the present EU scenario.
ERA Europe Market Survey 2006/07 conducted a survey and it has been established that the rate of ownership in Italy is very high. Italians are great savers and strongly believe in investing in property for its certainty and concreteness as an asset. Property, to them, is a more secure investment than stocks or bonds. Property is also considered a valuable inheritance. (European residential real estate markets highlights. 2006-2007
The other European countries like France, Belgium, and Switzerland witnessed similar trends over the years. France was highly influenced by the growth of foreign investors. It also had its share of globalization which led to the interference of the government as a catalyst to promote real estate. It has been found that France has modest proportions invested in housing and both the supply side and the demand side are almost at par with each other. Mortgage interest rates are lower than in Italy. Paris, one of the best centers in France is in high demand.
As an alternate investment, the real estate business is booming up but it has resulted in lesser affordability. Added to the woes of the people the government and its policies do not cater to the proper management of the situation. This has a drastic impact on the economy of the country. To attain self-sufficiency and promote growth in the desired direction the policymakers should rely on the individual differences within themselves taking into account regional disparities and work further to boost development in all the spheres.
References
Chances in housing finance and shelter delivery system. Web.
Chances in housing finance and shelter delivery system. P. 78. Web.
Chances in housing finance and shelter delivery system. P. 96. Web.
Doherty, Joe et al. (2004). European Observatory on Homelessness: The Changing Role of the State: The State and the Housing Markets of Europe.
European Housing Review 2006. corporate professional local. RICS Research. Web.
European residential real estate markets highlights. (2006-2007). ERA Europe market survey. Web.
Norris, Michelle. (2007). Housing inequalities in an enlarged European Union: patterns, drivers, implications. SAGE Journals online. Web.
IUT and the EU. (2005). Web.
Housing policy in the EU member state. (1996). European Parliament. Web.
Steyn, Mark. (2004). Reagan knew why the EU won’t work. Telegraph.co.uk. Web.
Hungary scoops first Charlemagne youth prize. (2008). European Parliament. Web.