Housing Policies in the United Kingdom, Switzerland and the United States: Lessons Learned

In this paper an attempt is made per se to lay out an analysis of the housing market and current housing policies in three developed countries: the United Kingdom (UK), Switzerland, and the United State (US). The raison de tre to focus on these three countries are prima facie due to the marked differences in their institutional settings. The UK is specified by fiscal centralization and extremely rigid planning system. However, the results of this inflexibility, which has made de facto the housing supply intensely inelastic to changes in house prices, are the high degree of urban constraints, the sever housing affordability crisis, and the housing scantiness for the young people. Besides, the main UK policy the so called, Help–to-Buy which merely concentrated on stimulating the housing demand, fails to abate the affordability crisis, because the increasing demand has further augmented the housing prices without expanding the housing supply, in toto. On the contrary, the fiscal decentralization policy along with implementation of the lenient urban planning system in Switzerland has encouraged the residential development and exceedingly low homeownership rate in the territory, which in turn may specify the key political concerns of this country for sprawl and rent stabilization. The US is denoted by fiscal federalism and extensive dissimilitude in the dearth of land use confining across the urban areas. In this context, the main consternation throughout the country is homeownership fruition and the pivotal policy to resolve this issue is the Mortgage Interest Deduction (MID).Though, this policy has faced a significant setback in the prosperous and strictly land use regulated urban areas, the so called - “super star cities”- because it is observed that the increase in the policy- induced demand will lead to hike in the house prices, pro rata. Moreover, MID, has only augmented the homeownership realization of higher income households in the urban areas with lax land use regulation, whereas the net effect of the policy on homeownership realization throughout the country is significantly zero, Ipso facto. Thus we conclude that the evaluation of housing policies essentially depends on the fiscal and regulatory conditions in the local housing markets. Policies that cause the increment of housing demands i.e. MID or Help-to Buy are bound to collapse in markets with stringent regulation or supply rigidity, Sine qua non.