Who Really Shapes Affordable Housing Policy in Federal States? Mapping Responsibility Beyond Formal Authority

Summarising their recent article in Regional & Federal Studies, Johanna Schnabel and Antonios Souris explore who actually shapes affordable housing policy in federal states. They develop a framework assessing responsibility across governmental tiers by examining control over social housing and housing allowances, alongside legislative authority, funding, and implementation. Applying it to Austria, Australia, Canada, and Germany, they show that effective control often diverges from formal authority, highlighting how institutional interaction and political choices determine centralization and accountability.

Housing affordability is a major social and political challenge. Low-income households, in particular, often struggle to find affordable and adequate dwellings. Therefore, affordable housing policy is a pillar of the modern welfare state and part of the fight against poverty and social inequality. In multilevel democracies, where regional governments play an important role policymaking, which level of government is responsible for providing this crucial public service?

Existing indices map the overall level of decentralization of a country or in policy areas such as education or economic policy, the relative importance of orders of government in affordable housing has never been examined, making it difficult to assign responsibility. Considering that affordable housing has become a major “social question” of the 21st Century, sound understanding of the governance arrangements in which affordable housing policy is made is of utmost importance, not least for public scrutiny and accountability. It is also the groundwork for theoretical or policy-oriented examination of explanatory factors or implications. 

To develop an agenda for research on affordable housing policy in multilevel systems, we propose an analytical framework to measure the relative importance of orders of government in affordable housing in federal states (i.e., the level of de/centralization), where regional governments are constituent units and enjoy significant policymaking powers. 

A central feature of our approach is its focus on the two main instruments of affordable housing policy: social housing and housing allowances. Social housing is a supply-side instrument that requires long-term investment, while housing allowances constitute a demand-side instrument that can be adjusted more flexibly. In federal systems, authority over these two instruments can be distributed across orders of government in different ways. Examining the relative importance of orders of governments in providing these instruments is essential for understanding responsibility for affordable housing policy in federal states.

We argue that the relative importance of orders of government depends on legislative authority, the relative importance of social housing and housing allowances, the use of conditional grants, and the existence of a functional division of powers. When authority is shared, the decision to provide an instrument is another crucial aspect. 

• Affordable housing policy is highly decentralized, when the central government possesses legislative authority over both instruments or has legislative authority over the more important instrument and provides conditional grants to shape provision of the other instrument by the constituent units and there is no functional division of powers.
• Affordable housing policy is highly centralized, when the constituent units possess legislative authority over both instruments or have legislative authority over the more important instrument, do not receive conditional grants and administer the instrument under the legislative authority of the central government (functional division of powers).
• Affordable housing policy is more or less decentralized, depending on the use of conditional grants and the existence of a functional division of powers.

This multidimensional perspective reflects a central claim of our study: legislative authority often does not fully capture who effectively shapes affordable housing policy. In many federations, one level of government may hold authority over an instrument, but the other level controls funding, implementation, or the relatively more important policy instrument. Our framework aims to identify how authority is exercised in practice rather than merely how it is allocated on paper.

We apply this framework to four federations: Austria, Australia, Canada, and Germany. In Austria, affordable housing policy is the most decentralized. Since 1988, the constituent units (Länder) have held exclusive legislative authority over both social housing and housing allowances. Effective control thus largely corresponds to the formal division of powers. In Germany, the central government and the Länder each possess legislative authority over one instrument. Nevertheless, affordable housing policy is a centralized policy. This is due to the growing importance of housing allowances and the use of conditional grants through which it influences social housing provision by the Länder. 

In Australia and Canada, legislative authority over both instruments is effectively shared. The degree of de/centralization depends mainly on governments’ decisions to create and sustain social housing and housing allowances and on the use of conditional grants. In Australia, central government control over the housing allowance – the more important instrument – and extensive co-funding of social housing – which the states provide – underpin a largely centralized system. In Canada, the provinces design and deliver both affordable housing instruments, while central government influence is mainly exercised through conditional grants – though the central government has also created important temporary programs. As a result, affordable housing policy is mostly decentralized.

The four cases illustrate that the governance of affordable housing in federal systems is best understood by examining who controls social housing and housing allowances and how important these instruments are relative to each other. Similar allocations of authority can be associated with very different degrees of effective centralization. Exclusive powers may coincide with decentralization, as in Austria, or with centralization, as in Germany. Shared powers may support central government dominance, as in Australia, or provincial leadership, as in Canada.

Beyond cross-sectional comparison, our framework also facilitates analysis of changes over time in the control and importance of the two instruments. Only Australia displays remarkable stability. In Austria, Germany, and Canada, the relative importance of central and regional governments shifted substantially in the post-war period as governments expanded, retrenched, or restructured social housing programs and housing allowances. These trajectories underline that de/centralization is not a fixed institutional feature but the outcome of political decisions. 

By focusing on the interaction between legislation, funding, and implementation, our study seeks to provide a more accurate basis for analyzing responsibility, accountability, and policy change in multilevel systems.

Click here to see the full article in Regional & Federal Studies.

This article represents the views of the authors, and not those of Regional & Federal Studies, the Centre on Constitutional Change, or the University of Edinburgh. 

Image credits:

Parliament House, Sydney: Georgfotoart, CC BY-SA 2.5 / Wikimedia

Author photos: Tobias Koch.

Biographical notes:

Dr Johanna Schnabel is a Lecturer and Researcher at the Chair of German Politics, Otto Suhr Institute of Political Science, Freie Universität Berlin. Her research largely focuses on intergovernmental relations and public policy in federal and decentralized countries. She has published widely on the management of fiscal and public health crises and the coordination of public policymaking in multilevel systems.

Dr Antonios Souris is a Postdoctoral Researcher at the Chair of German Politics, Otto Suhr Institute of Political Science, Freie Universität Berlin, where he develops and applies text-based methods in federalism research. His work bridges qualitative and automated approaches to study legislative behavior, party politics, and policymaking in multilevel systems, with a particular focus on Germany.