Housing Policy ‘Recipes’: International Lessons for China? China's Lessons for other Countries?

 

Housing policies have been one of my central interests since I began my career in 1977. Several years later, while at the World Bank with Steve Mayo and numerous other colleagues, I began to participate in developing lists of recommended housing policies or areas for reform. An example of one of our shorter, earlier lists can be found in Mayo Malpezzi and Gross, “Shelter Strategies for the Urban Poor in Developing Countries" (World Bank Research Observer, 1986). In this list, summarized here, we suggested countries needed to focus on:

• Broader economic development of an unstable macroeconomy as preconditions for improving housing conditions;
• Provision of infrastructure at appropriate and affordable standards;
• Cost recovery for that infrastructure through efficient taxes and user charges to enable its full coverage and maintenance;
• The creation of systems of land information along with the legal and administrative framework for the operation of land markets
• Reforms that would move high-risk low investment in formal markets into the formal sector that facilitate finance and better bricks and mortar investment;
• Development of appropriate financial markets and institutions including mortgage markets but also finance for construction and development as well as for rental housing;
• The critical review of housing subsidies to direct them more efficiently and more equitably and to safeguard the public purse;
• Replacement of old-style public or Council housing with appropriately designed sites and services and slum upgrading projects that address the housing problems of low- and moderate-income households;
• Tenure-neutral systems that facilitate the development of private markets for both owner occupied and rental housing;
• Reform of regulations like building codes and zoning regulations, subjecting those to cost-benefit tests; modifying or removing inefficient and inequitable regulations while strengthening and enforcing those required for basic safety and soundness of housing and financial systems;
• Focus on upgrading rather than simply demolishing so-called slums;
• Understanding that public housing developers often simply displace private investment, in many cases at higher costs with poorer or even perverse distributional outcomes;
• And finally that all these recommendations be underpinned by careful data collection, research, and monitoring and evaluation of the programs and policies involved.

IMHO this 40-year-old list stands up reasonably well today, but certainly is subject to criticism and improvement. It’s a little general, no doubt any reader can think of important omissions, and a few of the recommendations are still hotly debated, especially those regarding the relative roles of public and private sectors.

This is not the first such list of housing policy recommendations, of course.  We can cite dozens of examples, some before and many since. To give just one additional example, when Shlomo Angel and Steve Mayo drafted the World Bank’s official housing policy handbook Enabling Housing Markets to Work in 1993, they put forward the following list of housing policy do’s and don’ts:

It’s a bit hard to read but you can find the full document here.  For now, note that our lists are getting longer; and this far from the longest such list we could dig up!

In 2015 my friend and colleague Prof. Susan Wachter of the Wharton School and Codirector of Penn’s Institute for Urban Research invited me to serve on a panel discussing Sustainable Global Urbanization  The panel included a number of other colleagues including Susan’s colleague and fellow Co-Director Genie Birch, Maruxa Cardama, William W. Burke-White, Bob Buckley and Marja Hoek-Smit.  The session was headlined by Columbia University’s Jeffrey Sachs. 

As I prepared my presentation and started to put together yet another list of housing policy recommendations I was struck, not for the first time, that while the lists had some utility they were getting longer and ever more unwieldy.  As lists, they didn’t have much to say about how to set priorities among many possible policy areas and interventions, much less how to modify them for a given country context.

This put me in mind of a classic short volume by Dani Rodrik, One Economics, Many Recipes: Globalization, Institutions and Economic Growth. Like any ambitious volume, when I read it I saw points of agreement and some I’d question; but I really liked that in a short volume Rodrik uses the development recipe metaphor to highlight a need to set priorities among many possible policy recommendations; and just as importantly, to modify them for particular country contexts. I decided to shamelessly steal Rodrik’s “recipes” metaphor for my own presentation on housing policies. 

(You can watch the presentations of all the Penn panelists here.)

A few years later I found myself preparing a modified version of the Penn presentation for my colleague Siqi Zheng’s course on China’s urbanization at MIT. As is my custom, I prepared a possibly overly elaborate PowerPoint deck which, with just a few later modifications, you can download here.

In the deck you’ll find a few comments about food but at least as many about housing policies; an elaboration of the “recipes” metaphor; and a number of suggestions for further readings on both topics (food and housing).  The focus of the deck is on China, of course, but many of the points are, I think, readily transferable to other countries with a bit of work.

Next steps? In due course I plan to turn this presentation into a long paper or a short monograph for wider dissemination. In the meantime do feel free to use any of these slides in your own teaching or other presentations. If you have time, let me know if you do so.  Comments and criticisms are, as always, extremely welcome.