Public policies and Realestate sector must work together
Economic theory says that: 'free markets, under conditions of free competition and perfect information, are efficient'. In other words, sellers and buyers exchange goods to each other at a 'break-even point'. This point is a price in that the seller accept to receive and the buyer to pay. However, it is not as simple as finding this point.
Firstly, because there are market failures that drive efficiency away. Secondly, there are citizens who cannot pay the housing market price because there is little supply in relation to existing demand.
The challenge of housing accessibility is:
Urban: in 2050, 68% of humanity will live in cities .where the concept of smart cities has been developed: urban planners, architects, engineers and technologists are working to create a city that is more focused on the quality of life of the city, more sustainable and with the Internet of Things as a catalyst to introduce technology to streamline all processes. It is always trying to adapt to the future while riding the present.
Global: as indicated by the UBS Global Real Estate Bubble Index since 2008, price increases have been reported all around the world, although in the last months of 2019 prices have generally slowed down.
Complex: neither the public nor the private sector has the solution, so it makes sense to share success stories and work as a team.
Urgent: there are citizens who cannot access housing... but we can add to the efficiency of the market the equity of public policies agreed with the private sector.
The actions that it could be undertaken must be: planned, respect the principle of legal security and be evaluated.
Below we list some of them -without taking a position in favour or against them-:
1. To bet on public policy on building social housing.
2. Provide fiscal incentives for the owner of a flat to rent it at lower prices than those which market establishes.
3. Agreeing with private actors the construction of housing developments for vulnerable groups (poor people, young people, abused women, disabled, etc.).
4. Facilitate the entry of 'Listed Real Estate Investment Companies' of which we spoke in 2015: these, in exchange for tax breaks, build rental apartments using their financial muscle.
5. Publish housing price indexes regularly because the information should be perfect and updated.
6. Promote 'housing first': this policy consists of beat "homelessness" phaenomenon by providing housing to citizens who live on the street because once they are established there, they can escape from precariousness and get a job.
7. Limit prices by Townhall ordinance or, autonomous or state law: this requires a much more rigurous approach the whole impact of that policies it has to be considered by comparing experiences in different cities and above all bet on dialog among all the actors implied because is in the addition of knowledge and loyal cooperation where it stems the success posibility.
These policies are not exclusive, they have not to be 'infinite', moreover, it can be choosen to apply them only to certain districts.
Throughout the article we have seen how the usual dichotomies between public and private and, between policies such as: building more or limiting market prices are too simplistic. The challenge is enormous, yes, but as a society we have a lot of measures to deal with. Moreover our sector can help with its experience.