When it comes to housing access, demagoguery always fails the test of facts

The issue of access to housing has always had an extraordinary ability to provoke the most pronounced and extreme expressions of the demagogic instincts of a significant section of the political establishment and commentators. These instincts are invariably accompanied by restrictive and illiberal legislative proposals: from a moratorium on evictions (which amounts to the government or Parliament preventing the enforcement of court rulings, in defiance of respect for the judiciary) to the setting of maximum rent levels (the so-called ‘rent caps’, so frequently called for in recent days), right through to that sort of open-ended tenancy agreement devised by the Sánchez government in Spain to free tenants from any anxiety about one day having to leave the home they occupy.

History, evidently, has taught us nothing. Setting aside the (entirely justified) objections of principle, none of these measures has ever produced any results in terms of improving access to housing. This was not the case in Italy with the infamous ‘fair rent’ law, through which, in the 1970s, it was thought possible to establish – to quote the explanatory memorandum accompanying the measure – ‘objective mechanisms for determining a rent based on criteria of fairness’; instead, the result was to drive landlords away from the rental market or force them into the black economy. Consequently, this was entirely to the detriment of the needs of prospective tenants with limited financial means.

This was not the case with restrictions on short-term lettings, as explained in detail and with supporting evidence by the Bruno Leoni Institute in a study edited by Davide Mattone and entitled “Affitti brevi: il divieto che non fa spazio”. New York has gone so far as to ban this form of property use entirely (permitting it only where the owner lives with the guest), and the only truly noticeable effect has been a rise in hotel room prices. This will certainly have pleased some people, but it did not exactly fulfil the measure’s intended purpose. Nor will this happen with the provisions of the proposed housing regulation (Affordable Housing Act), through which the European Commission would seek to grant unspecified ‘competent authorities’ in various countries the power, on the one hand, to restrict short-term lettings and, on the other, to sell or utilise residential properties not intended as a main residence. This is a dangerous text, not only because of the severe curtailment of economic freedom and property rights that characterises it, but also because of the choice – in a matter traditionally outside the EU’s remit – of the ‘aggressive’ form of a regulation (when many were expecting, at most, a recommendation), which raises fears of further interference in the sphere of European citizens’ individual rights. In this regard, the debate that took place on Tuesday during the plenary session of the European Parliament is truly instructive, as the measure’s supporters failed, even for a moment, to rise above the age-old and all-too-common habit of smugly flaunting their generosity with other people’s money.

On the housing front, the path taken by the Italian government certainly has room for improvement but is the right one: the refurbishment of 60,000 vacant social housing units, a housing programme integrated with the private sector, and the acceleration of evictions to instil confidence in landlords and expand the private supply of rental properties. If this were accompanied, as has been suggested, by a halving of the flat-rate tax on rent-controlled tenancies, a further step forward would be taken, particularly if the opportunity were seized to extend this scheme to all Italian municipalities, overcoming the current incomprehensible restriction. Furthermore, still on the tax front, the burden of the IMU should not be overlooked; action could be taken here by increasing the current 25 per cent reduction in the tax due where rent-controlled tenancies are in place.

In short, to facilitate access to housing, we must continue to resist the siren calls of illiberal interventionism coming from Madrid, Berlin and Brussels – which history has shown to be a failure – and press on along the path of pragmatism and common sense. The rewards will not be long in coming.