Private sector involvement in social rented housing

Abstract

The paper examines, with the aid of evidence from several countries, alternative models of private sector involvement in the delivery of social housing. Four models of involvement are considered: public model with contracts for certain tasks; private model with public subsidy plus strings; private actor cross subsidization model and a state agent model. The nature of the contract and what is delivered varies between the models as does the purpose of private sector involvement. The paper shows that whilst there may be a potential for efficiency gains and improved consumer choice from private involvement such benefits are frequently not realized. This is largely because of a lack of contestability and rivalry in contract provision and the failure of private sector involvement to increase the options that are available to tenants.