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27. The access of poor households to rental housing is currently impeded by costs,
mainly as a result of rising rent prices and a shortage of affordable rental housing. 45
More and more households in Europe are facing difficulties in paying the rent
(3.8 per cent of Europeans, and 8.6 per cent of those with income below 60 per cent
of the median national income). 46 Rent affordability issues are more widespread in
developing countries where rental housing is even less available. The rent-to-income
ratio for African cities is more than twice that of cities in high-income countries at
39.5 per cent of income. 47
28. Significant increases in the supply of private rented housing are therefore
necessary to help empower lower income tenants in the rental market and relieve
affordability problems. 48 In addition, demand-side policies are required to increase
the affordability of the rental sector for the poor. Although most Governments have
focused their efforts on increasing individual homeownership, there are some good
examples of supply- and demand-based policies aimed at encouraging the smallscale private rental sector and increasing rent affordability for low-income
households. 49 Such interventions include taxation, direct or indirect subsidies, and
regulation. 50 State policies towards the informal rental sector also affect the
accessibility of the poorest to rental arrangements.
3.
Taxation and supply-side subsidies
29. The tax treatment of private rental investment is a critical factor in either
stimulating (Australia, France, Germany, the Netherlands, and New Zealand) or
discouraging it (United States and Canada). 51 Taxation for other tenure investment
options also has an influence on the rental sector: favouring tax deduction or
exemptions for homeownership (including non-taxation of capital gains and
__________________
45
46
47
48
49
50
51
13-42184
(Organization for Economic Cooperation and Development (OECD) “Housing markets and
structural policies in OECD countries”, OECD Economics Department working paper No. 863
(January 2011).
Pittini, “Housing affordability in the EU” (see footnote 7 above), p. 8; see also “Kemp, “Lowincome tenants” (see footnote 40 above), pp. 1026 and 1029.
UN-Habitat, Affordable Land and Housing in Africa, (see footnote 4 above), p. 24.
Towards a Sustainable Private Rented Sector (see footnote 40 above), p. 146.
In most countries, the most landlords operate on a small-scale. See J. Rugg and D. Rhodes, “The
private rented sector: its contributions and potential” (Centre for Housing Policy, University of
York, 2008). For illustration, in Chile, 80 per cent of owners own one property, and another
10 per cent own two. Commercial investors in rental housing are only important in a handful of
countries, including the United States, Switzerland (where pension funds play an important role
because they are required to hold real estate as part of their portfolios, and rental apartment
buildings are a popular asset for pension fund managers and Russia (where the privatization
process created a group of massive landlords — the former industrial companies that built
housing stock for their workers. See also J. Hegedüs, M. Lux and N. Teller, Social Housing in
Transition Countries (Oxon, Routledge, 2012).
Steve Pomeroy, Private Rental Policies and Programs: Review of the International Experience
(Ottawa, 1999), p. 107; see also Steve Pomeroy and Marc Godbout, “Development of the rental
housing market in Latin America and the Caribbean”, Inter-American Development Bank
Discussion Paper (2011), pp. 10-11.
Pomeroy and Godbout, Development of the rental housing market” (see footnote 50 above),
p. 19; see also Australian Housing and Urban Research Institute, “What makes a landlord decide
to invest and dis-invest in private rental housing?”(May 2010).
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