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Fiscal instruments for the provision of affordable housing

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In the UK the majority of additional affordable housing is provided either with the help of up-front grants (Social Housing Grant) allocated to social landlords or through developer contributions to affordable housing on market sites. There is a significant gap in affordable housing policies aimed at helping those a little further up the income scale who are still unable to afford acceptable housing especially in pressure areas. Equally, developers see little reason to concentrate on the affordable end of the market. The paper reports on a survey of policies applied in a range of countries, which might have some value within the UK context. This entailed a short questionnaire of relevant experience and of available evidence on the evaluation of available instruments. The survey showed that, while there was a wide range of mechanisms available the majority concentrated on subsidies, which, in a UK context, could add more to prices than to output. Others provided useful insights into possibilities for encouraging provision for the intermediate market. On the basis of the available evidence a possible package of measures with the potential for assisting provision of affordable is developed.

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