Social Housing for Armenia:
looking for sustainable options
“Housing is a Verb, not a Noun”. (Turner, 1976)
In recent years, the two-word expression “social housing” has been a popular headline subject: a multitude of texts, projects, programmes have been produced under its auspices. Despite housing — and social housing in particular — being a highly political matter, the term comes up within contexts of countries of all economies and political models. In terms of its Verb/Noun duality, the solutions do not necessarily come in the shape of bricks and mortar but might be the formal facilitation of the ongoing processes that successfully provide decent living conditions to as many as possible. That being said, the circumstances in each country shape a distinctively local understanding of what social housing entails.
At the same time, in much of the world, today, the term is inherently linked to another paradigm — affordable housing crisis. The world we live in right now is one where housing is the biggest asset most individuals or families will ever own, and where most people are facing the “housing question”. In view of the scale of this global issue, when speaking of social housing today, we should envisage a housing stock protected by layers of policies for price regulation, tenure security, quality, and sustainability. The environmental sustainability — helping to lower the monthly bills — is not the only aspect of sustainability that should be considered in these programmes.
The roots of the global housing affordability crisis
The early 2000’s is now recognized as a period when an unprecedented increase of real estate prices had become apparent, leading to the 2008 global financial crisis — which was nothing other than bursting housing bubbles. The subsequent backlog of affordable housing need was further inflated by the 2015 large refugee influx into Europe — dubbed by the media “refugee crisis” — including the states of the former Eastern Bloc. Adding insult to injury, the accelerating climate change makes actions for sustainable transitions an increasingly pressing necessity, including ones aimed to replace and/or refurbish the housing units that contribute to carbon footprint.
On the other end of the spectrum are the states of the Global South where the mostly externally funded initiatives are rather an attempt to move the urban poor from the sprawling informal settlements, thus marking the processes of fast urbanization in those areas.
Armenia, as a former Soviet state and a transition economy, lies somewhere in the middle of that spectrum of today’s global housing situation. The large Soviet legacy, most of it well past their designed life span, is what mostly shapes the housing stock in the country 30 years into independence — both as a burden and a capital, as a noun and a verb. This means that a combination of tools implemented on either end might be a viable solution for Armenia.
What does a housing social make?
In view of the diverse nature of the challenges within housing sector in each country, the search for a strict and universal definition of social housing is more of a concern in the world of academia rather than policy-makers. Ideally, every country devises a system most effective in addressing their own housing situation. The approach adopted by Housing Europe — whereby an individual country profile is created for the definition of social housing in each European state — is a case in point.
However, in developing a social housing system, every country inevitably faces the same set of questions:
▪ who are the target groups?
▪ what form of tenure should be used?
▪ who is the provider?
▪ what financing mechanisms are available?
And a question that is only now beginning to become more common:
▪ what is sustainable in social housing?
It is in answering these questions that a clearer picture of possibilities and realistic models emerges. The overall consensus is that social housing is the affordable housing for those who qualify as low to lower-middle income in their respective countries. The rest are means to that end.
And what about affordable housing?
Contrary to the definition of social housing, affordable housing is a calculable category, and is being studied as such. The most commonplace formula is the one where a dwelling is considered affordable if its monthly costs make up no more than the third of a household’s disposable income. This approach is, of course, insensitive towards the multiple externalities and the trade-offs the households make to end up with an affordable living space: location, and transportation costs as a result; quality of neighbourhood and availability of services; quality of dwelling and ultimately its sustainability — in terms of energy efficiency, construction materials, durability.
All these questions are addressed in at least several researches by centres of housing studies.
The criteria for housing systems are summarized in the 5A’s of adequate housing:
▪ Availability — for having enough units to meet the growing demand
▪ Accessibility — to ensure the target groups do become the beneficiaries of the land, housing, urban infrastructure
▪ Affordability — having an affordability threshold, devising applicable tenure models
▪ Acceptability — setting quality criteria
▪ Adaptability — designing for sustainable transitions and energy efficiency, incorporating design flexibility for the resident’s changing needs (such as incremental housing models)
The paradigm shift in Armenia: social housing then and now
The Soviet era of housing
The housing of the Soviet era of mass-production was by definition social: its provision was a major subject in all stages of the planned economic agenda of the central government; the ultimate goal was to provide every family with a dwelling; the residential communities were designed to make socialization virtually inevitable by extracting some of the activities traditionally taking place within the housing units (food preparation, eating, playing, laundry) and merging them into the “third places”. Each community (named microdistrict) was designed to contain all the necessary services within a distance specified in the building regulations, equalizing living standards for all the citizens.
In many parts of the Soviet Empire, the mid-century versions of panel blocks of flats (the so-called Khrushchevkas, constructed mostly between 1950–1970) had many obvious disadvantages — tight dimensions, lack of sound proofing, poor external insulation. Whereas in Armenia, the absence of panel manufacturing production lines at this stage, along with the vast availability of the local tuff stone and age-old stone building traditions, has led to the implementation of a typology that had significantly better energy efficiency.
The housing allocation programmes and policies were developed to include most citizens in need of living space (if left aside the well-known schemes of going around the lengthy bureaucratic procedures and getting ahead on the waiting lists, and other cases of favouritism). All in all, the population treated housing as something given, and given for free, which in terms of command economy means financing allotted from the public budget.
The housing of independent Armenia
The situation has changed overnight with the collapse of the Soviet Union launching the hectic decade of privatization. By the year 2000 a whopping 96% of housing in the country became privately owned. According to a 2017 study commissioned by the UN, 99.8 percent of housing is privately owned, making Armenia one of the few countries in the world with such a high rate of home-ownership.
What the formerly socialist society was not prepared for is that from there on the maintenance of the aging housing stock, parts of which additionally have sustained various degrees of damage as a result of the 1988 earthquake, should also be up to the property owners themselves․
This new arrangement came to mean that the responsibility for the maintenance of the communal — a.k.a. social — areas was also “granted” to the tenants. The right to estate proprietorship highlighted and further deepened the society’s inkling for ad hoc design, whereby the citizens took it upon themselves to restructure their own dwellings. Not only are these outgrowths creating urban elements lending themselves to the informal sector — reminiscent of slum-like settlements — but more importantly, they pose a real danger to the structural integrity of the buildings as a whole.
As it stands right now, the previous view on housing as a social right has transformed into a definite class-identifying asset, propagating forced gentrification. The new free-market economy propelled a new arrangement of the urban and social structure that is one based purely on economic class. The “prerogative” to build dispersed from under central government’s control to the private sector; housing pricing and policy frameworks became subordinate to the developers’ private interests and profitability.
In the past decade, a number of programmes — most of which with the support of the government — have been launched under the misleading umbrella name of “social housing projects”.
Architecturally (read: aesthetically), these new massive monolithic concrete developments are not much different from their soviet predecessors made of prefabricated concrete slabs, although they will stand to serve the tenants significantly longer. In most of these new compounds the open courtyards — intrinsic to the everyday social life of soviet children and elders — and the green areas have shrunk.
As for the true beneficiaries of the new housing units, the most recent initiatives — mainly focusing on mortgage interest rate subsidies through reimbursement of income taxes — are aimed at those who ultimately represent medium to high income professions in the country, and are mostly limited to the ever-densifying capital city. These exclusive practices have left out and outpriced those who are indeed in dire need of improvement of their housing conditions. However, it is worth noting that the programme is very clear in answering the social housing questions by defining the beneficiaries, the donors, and ensuring functional financial mechanisms.
A portion of the households whose income and needs do not match the offers on the market, opt to become self-builders, using their own skills and/or turning to the other more skilled community-members. The downside of these practices is once again the questionable construction and architectural quality attributable to its informal nature, which incidentally makes it difficult to quantify them.
What does the law say?
The confusion around the amalgam of programmes labeled as social housing becomes entirely understandable if one looks at the definition of social housing fixed by the law. It states that social housing is “a housing unit/dwelling/living space making part of the social housing stock”. Just as broad is the definition of the social housing stock, which includes any housing units provided by virtually any donors and facilitated through any initiatives and programmes. These broad definitions, on one hand, allow effectively any architectural project to claim socialness without prioritizing any one over the other; on the other hand, they set up a framework inclusive both for tenants and providers.
The formation of the legal framework supporting actions for sustainable transitions has been accelerated by the country’s commitment to the SDGs stipulated in the strategy Agenda 2030, active from year 2016. Several projects have been brought to life through international funding, mostly devised by UN organizations invested in advancing the sustainability targets. Yet, as of now, there is no comprehensive system of guidelines, regulations and enforcement thereof, which would ensure the effective implementation of sustainable practices in the construction industry.
How others did it?
In the U.S. : a small stock and a symbol of poverty
In some social housing systems, the involvement of the public in its provision is reflected in the very way it is termed. Public housing in the U.S. — referred to as “the projects” among the citizens — is publicly subsidized rental housing stock, with pricing below market rates. With just below 4 percent of the housing stock nationwide being subsidized, the country which is home to some of the most unaffordable housing markets, hardly scratches the surface of the shortage of affordable units. Similar to Armenia, the lion’s share of the federal subsidies benefits the higher income households in the form of mortgage interest deduction.
Around the time of Soviet mass-construction, the extensive housing projects in the U.S marked the rise of the suburbs. The following years showed that many of these ultimately completely defied their core purpose of improving the living standards of the new occupants. A poster-child example for the extreme cases of such failures became the Pruitt-Igoe apartment complex which is all the proof well-meaning architects, urban planners and government officials needed that an isolated housing development — albeit new and a considerable improvement over what the tenants previously owned — is not a guarantee of improved social indicators. Later, the researchers would conclude that the unfinished urban infrastructure, poor construction quality, uniform social makeup of the community, population density and lack of amenities were the culprits.
Source
In The Netherlands: the perfect system with social housing associations and universal approach
The biggest rental social housing provider in Europe, The Netherlands, manages and maintains its stock through social housing associations — individual non-profit organizations operating collectively under the supervision of the national government. At the moment, the network operates around the third of the total housing stock in the country, and 75 percent of the rental housing units. The Dutch social housing system has been shaping and refining for over a century, and has grown into an influential consortium collaborating with other external institutions as well — such as low enforcement, employment agencies, healthcare facilities, tenant organizations. The associations carefully monitor the communities under their responsibility for any potential conflicts and other social situations leading to evictions, which are very rare in view of the strong tenant protection laws. The below-market prices are strictly regulated and partially subsidized for households who fall within one of the predetermined income ranges, and yet the affordability of these units does not compromise their quality, requiring them to comply with strict national regulations, and hardly ever sets them apart architecturally from their non-subsidized neighbours.
To avoid the ghetto situations emerging in areas of high concentration of any marginal groups, the Dutch social housing associations are consciously following the universal model by mixing in the same neighbourhood social housing and non-subsidized housing, households of different incomes, races, cultures and beliefs. By doing so, the authorities promote an image of social housing which is not associated with shame and social outcasting true to subsidized housing projects in most of the world. The country is also among the most diligent followers of the sustainable development goals, making efforts to contribute to carbon footprint reduction and sustainable transitions.
Unfortunately, the 2008 financial crisis has challenged the universal approach of the Dutch model, being overwhelmed with a multiplied number of households in need of subsidized housing and a growing number of cases of evictions — with around 80 percent of which due to rent arrears.
An attempt has been made to replicate this model in Armenia, with the help and funding from Dutch experts and banks. The result is the ASBA foundation with its pilot project in Dilijan. The land for the housing was provided by the government, and the units were supposed to be mostly rentals. However, the resulted prices were once again much higher than a medium income could afford, and the focus of the foundation seems to have shifted from increasing the social housing stock to awareness-raising programmes for energy efficiency.
The practices in the Global South: microfinancing and subsidized construction
The weaker economies of the Global South, struggling to clear out the low-quality slums, opted for alternative measures in tackling the national housing shortage — mostly in the form of microfinancing initiatives. In Latin America, NGOs offer support packages to those who want to improve their own houses, simultaneously providing technical assistance to ensure the finances serve the goal.
A different type of subsidy initiative was tried out in Malawi, in Africa. Under the governmental Decent and Affordable Housing Subsidy Programme the qualifying families could obtain subsidized cement and iron sheets at half the price. A year or so into the programme, the authorities somewhat altered the programme by subsidizing newly built housing units instead of construction materials and letting them for half the price that was to be paid back within five years. The change was a response to the repeated cases of misuse of the materials, such as “cashing in” by selling instead of constructing, or exceeding their validity period by not building quickly enough.
Another scheme used to support housing affordability is the so-called incremental housing, the most visible example of which is the famous project Half A House designed by the team of the Pritzker-winning architect Alejandro Aravena. The group made calculations and concluded that the government’s disaster relief budget for the victims of the 2010 earthquake in Chile would only be enough for a construction of nearly half of the required units, that would meet the minimal needs of the families. The ingenious decision was to build half a house for each family, with the other half being added by the families themselves, over time, as the resources became available.
What can be done?
In devising systems for social, affordable housing in free-market Armenia, several cornerstone notions ought to be considered. First and foremost, the private sector — the biggest supplier of new units for the past 30 years — does not have a natural inclination to modify their spreadsheets so as to include the low-income groups. The second consideration is the existence of a large number of households that engage in self-building, which ultimately lifts some of the burden off the housing units on the market even though creating an unquantifiable informal sector.
The multilateral PPP collaborations between policy-makers, authorities, researchers, local communities and the private actors may result in a viable housing system. The tools should include policies and regulations that cover — but are not limited to — the following areas:
▪ Unlocking cheap land,
▪ Incentivizing providers/donors to ramp up supply,
▪ Devising allocation systems,
▪ Having in place price control mechanisms,
▪ Prescribing quality indicators,
▪ Providing recommendations and enforcing rules for sustainable transitions.
Concluding Suggestions
Suggestion number 1.
Creating partnerships between policy-makers, researchers, NGOs, to develop a framework for a national social housing system. Each actor will contribute with expertise and questions relevant to their field: passing laws and acts, academic solutions, first-hand knowledge of the real scale and the nature of the problem.
Suggestion number 2.
Incentivizing the private sector to build more affordable units: tax measures, land benefits (cheaper land, zoning variances), prioritized and accelerated permission procedures.
Suggestion number 3.
Ensuring a steady formation of the social housing stock by fixing a quota of affordable housing units from each new development: such as the arrangements where developers are mandated to build 10% of the dwellings as social housing (complying with its quality standards).
Suggestion number 4.
Diversifying the target groups’ typology — in terms of policies, degree of involvement and architectural solutions:
▪ multi-apartment developments in densely populated urban areas;
▪ low-rise, high-density blocks where land is more available and social interactions are a priority;
▪ one and two-storey houses with adjacent land for self-builders.
Suggestion number 5.
Creating grassroots capacitating prorammes for communities, whereby the self-builders are provided with ready architectural and technical solutions for sustainable construction; devising micro-financing tools for access to sustainable construction materials, appliances to make use of renewable energy; incorporating spaces for residents’ livelihood occupations into the design: greenhouses, workshops, small-scale agricultural activities.
Suggestion number 6.
Creating reasonable quality control mechanisms to ensure the private developers do not forfeit quality over cost. The requirements should refer to both architectural and technical characteristics.
Suggestion number 7.
Developing and enforcing regulations for sustainable construction. The housing donors from all sectors are thus provided with recommendations that will accelerate the nationwide sustainable transitions. The guidance should address techniques for the reduction of the operating expenses — thus reducing the cost per unit in the long run.
Suggestion number 8.
Enacting laws ensuring the “untouchability” of the housing stock. This implies an allocation and regulation system that will not allow the move of social/affordable units into the market-rate sector.
These suggestions outline a line of action with several scenarios for the desirable outcome for the housing situation in Armenia. However, the housing sector in general is a highly complex and dynamic ecosystem involving multiple stakeholders whose interests often collide. Creating a space for a multilateral dialogue, driven and supported by political will, is the prerequisite for the long-term sustainable social housing programme.
