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Social housing: new demand, new tools: Affordable finance for affordable housing through real estate ethical funds

Luisa Ingaramo (SiTI‐Higher Institute on Territorial Systems for Innovation, Polytechnic of Turin, Turin, Italy)
Stefania Sabatino (SiTI‐Higher Institute on Territorial Systems for Innovation, Polytechnic of Turin, Turin, Italy)

International Journal of Housing Markets and Analysis

ISSN: 1753-8270

Article publication date: 4 October 2011

Abstract

Purpose

In light of growing concerns on the scale of the housing affordability problem in Italy, and of the government's response in the form of a new Housing Plan, the purpose of this paper is to ask whether such new policy is a coherent and adequate strategy to address the alleged housing problems. In order to answer this core question, the paper first discusses whether Italy is indeed facing an affordability problem; it then analyses the evolving housing policy and the emerging solutions for its implementation to identify its core innovative features.

Design/methodology/approach

This paper highlights the emerging role of social housing in Italy by presenting secondary evidence of the performance of real estate markets and of the demand for rented housing for 12 Italian metropolitan areas. The paper focuses on renters in an intermediate income bracket, which represents a core emerging social housing target group. Relying on existing evidence and international literature, the paper then discusses the implications of the new legislative framework for the delivery of social housing in Italy, with a focus on discussing the system of local real estate ethical funds, setting it against the evolving European context.

Findings

The recently introduced changes to the delivery and funding model in the Italian social housing system offer an opportunity to overcome the traditional Italian approach to social housing. First, the new model serves a new target group to avoid it drifting into relative poverty, and second it allows new subjects, and primarily banking foundations, to actively pursue an ethical return on their investment in new housing. The complexity of the local real estate ethical funds, however, constitutes a source of risk in the new delivery model, and the short time for which existing funds have been operational only leaves room for some preliminary considerations. Nonetheless, the analysis conducted in this paper indicates the core areas that will need to be monitored in the medium to long term to ensure a meaningful understanding of the implications of the Plan.

Research limitations/implications

A conclusive assessment of the Housing Plan and its impacts on the Italian economy requires a longer timeframe.

Originality/value

The paper offers an insight in the Italian rented housing market, with a focus on large metropolitan areas. It presents a review of evidence of housing affordability problems facing midium‐ to low‐income groups, and therefore adds to growing body of social housing international literature. It also provides a review of the emerging system of local real estate ethical funds, and therefore useful reference for national and international social housing and real estate funds practitioners and researchers.

Keywords

Citation

Ingaramo, L. and Sabatino, S. (2011), "Social housing: new demand, new tools: Affordable finance for affordable housing through real estate ethical funds", International Journal of Housing Markets and Analysis, Vol. 4 No. 4, pp. 369-393. https://doi.org/10.1108/17538271111172166

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited