Annika Kress, Eurac Research
Relevance of the Practice
Italy’s housing market is dominated by homeownership with only one fifth of all households living in private or public rental dwellings. Although these numbers have remained relatively stable over the past 25 years, overall, they change considerably when zooming into the low-income demographic. While 20 years ago about half of all low-income households lived in properties they owned, this number had declined to around a third by 2014.[1] The biggest shift occurred around the 2008 financial crisis, with a decline in homeownership of more than 10 percentage points among this demographic. While the number of dwellers in public housing has also remained relatively stable at around 4-5 per cent of households, the number of families who qualify for public housing and are waiting to access it lies at 650,000.
Like other Southern European nations, these numbers would be even higher were it not for strong family networks who step in to help out family members in need.[2] In fact, 66 per cent of the Italian population between 18 and 34 years live with their parents,[3] which is one of the highest percentages in Europe and in many other cases, families support family members economically. After decades of different government programs regarding public housing, Caruso furthermore holds that ‘there has been no continuity in financing housing, but only fragmentary interventions’.[4] She predicts that the pressure on the (social) housing market will further increase especially in northern and central Italy and the biggest cities and their surroundings.[5] Indeed, the impact of the system of local regional funds on southern Italy is described as limited only.[6]
Description of the Practice
Housing in Italy is a very concurrent policy issue. While Article 117 of the Italian Constitution lists the concurrent legislative powers of state and regions without explicitly mentioning housing, the Italian Constitutional Court has clarified that housing falls into the category of land-use planning, which is, indeed, listed among the concurrent legislative powers in Article 117 (Constitutional Court judgment no 303/2003). In large parts, the approach to social housing policy still follows the distribution of administrative competences outlined in Legislative Decree no 112/1998. The national government defines the housing programs of national interest, as well as the general criteria and principles regarding public housing. Regions and local governments take on the more specific role of determining the actual interventions and the administration thereof. The role of municipalities is largely that of owning social rental dwellings and dealing with the administration relating to public and private housing projects within their territories, which makes them an important player in housing issues.
The current picture of social housing in Italy is characterized by a wide variety of approaches that range from publicly owned and managed social housing complexes to local experiments including collaborations with non-profit NGOs and public-private partnerships. Public-private partnerships in the field were promoted as early as the 1990s but really started to be incentivized in the late 2000s as one of the interventions outlined in the 2008 National Housing Plan of the Berlusconi IV Government.[7] They were further promoted in the new Housing Plan of the Renzi Government in 2014 (Legislative Decree no 47/2014 and State Law no 80/2014). Nevertheless, as it is, the public housing market does not meet the public housing needs and municipalities together with private entities are looking for innovative ways to offer adequate housing solutions to citizens.
The following example is a case study of one such innovative approach in the City of Turin.
In 2019, the World Bank published summaries of 100 projects of municipal public-private partnerships from around the world, including the example of Sustainable Housing Projects in Turin.[8] In these projects, the Municipality of Turin issued tenders regarding abandoned buildings that were to be renovated and re-furbished for temporary social housing. The particular case described by the World Bank is that of two nine-story buildings that had been abandoned for over 20 years in a Turinese suburb with 3,000 inhabitants largely made up of public housing and subject to an Urban Recovery Program.[9] Local planning regulations restricted the use of the properties to public housing purposes.
In 2008, the municipality leased the building to a consortium of private entities, granting the consortium the right to develop the property during the period of the lease for social housing aims. The municipality furthermore stipulated environmental impact requirements and energy efficiency measures. The consortium eventually converted the abandoned buildings into a multi-purpose edifice with ‘182 flats and 470 beds, kitchen and other ancillary services such as a bar, restaurant, laundry, grocery store, a medical and dental clinic with controlled prices, employment office, after-school activity center, and car/bike-sharing system’.[10] The majority of the dwellings are rented out to university students, but around 22 per cent are protected tenancies reserved for temporary social housing and subsidized by the Municipality of Turin.[11]
The inclusion of ancillary services, such as price-controlled clinics, an employment office and an after-school activity center, adds a community aspect to the building that goes beyond single households to benefit the wider area around the developments themselves.
Assessment of the Practice
From a national perspective, while the renovation of the two buildings in Turin can be considered a good practice of municipal-level public-private partnerships, in general, the public-private partnership approach to public housing cannot be the single solution to such a vast problem but can only complement other measures taken by the different levels of government. As a market-based solution, this kind of public-private approach depends on the financial interests of private funders. As Copiello puts it ‘the hypothesis to fund social housing settlements by means of PPP requires to devise profitable transactions for private partners’.[12] In the Turin case study, the energy efficient refurbishment of the building enabled the private consortium to ‘break-even’ only six years after the initial issuing of the tender by the Municipality of Turin, while at the same time ameliorating the problem of what others have called ‘fuel poverty’.[13] In other words, the consortium could increase rents while keeping them below market-rates, as dwellers would save on high utility costs that would intensify the financial burden on low-income families in less energy-efficient buildings. While the project’s objectives regarding the requalification of a certain area and environmental protection have been realized, this is highly doubtful concerning the aim to offer accessible social housing.[14] After all, only 22 per cent of the dwellings are reserved for this social housing only at 22 per cent and financial sustainability depends to a large degree on university students renting the remaining flats. In the end, this sustainability depends in case of any PPP, especially in times of economic crises, on who ultimately bears the financial risk, i.e. whether in case of project failure the financial damage end up with the public sector partner.[15]Whether such an approach is, however, a practicable solution in cities beyond the economically powerful, industrial hubs in northern Italy, remains questionable. In less prosperous cities, private actors might be more hesitant to enter into public-private partnerships that require large initial investments that potentially bear higher economic risks in economically weaker contexts. It is questionable whether Turin’s approach is equally feasible in rural municipalities, as private partner investment is usually more likely in urban areas due to a better cost-benefit ratio compared to peripheral territories.[16] Another caveat regarding the exportability of this practice from Turin to other contexts is linked to the fact that much of its positive aspects were arguably enabled by the special role played by the city’s public officials.[17] Civil servants at the urban planning department in charge of the project had previously been employed by the Piemonte region and therefore had extensive background knowledge plus direct contacts at the regional level which facilitated smoother implementation.
Despite these specificities of the Turin case, public-private partnerships generally offer the possibility of an asymmetric, decentralized approach and give municipalities that are hard-pressed for accommodation in public housing the opportunity to individually address the need to alleviate at least some of the burden. For local governments to ensure adequate and accessible public housing is particularly important against the background of the past and present economic crises which have increasingly challenged the traditional Italian housing model based on home ownership.[18]
References to Scientific and Non-Scientific Publications
Caruso N, Policies and Practices in Italian Welfare Housing: Turin, up to the Current Neo-Liberal Approach and Social Innovation Practices (Springer 2017)
Copiello S, ‘Achieving Affordable Housing through Energy Efficiency Strategy’ (2015) 85 Energy Policy 288
Poggio T and Boreiko D, ‘Social Housing in Italy: Old Problems, Older Vices, and some New Virtues?’ (2017) 4 Critical Housing Analysis 1
The World Bank, ‘Municipal Public-Private Partnership: Framework – Project Summaries Part 2’ (2019) <https://ppp.worldbank.org/public-private-partnership/library/municipal-public-private-partnership-framework-project-summaries>
[1] Teresio Poggio and Dmitri Boreiko, ‘Social Housing in Italy: Old Problems, Older Vices, and some New Virtues?’ (2017) 4 Critical Housing Analysis 1, 115.
[2] Nadia Caruso, Policies and Practices in Italian Welfare Housing: Turin, up to the Current Neo-Liberal Approach and Social Innovation Practices (Springer 2017) 34.
[3] ibid 43.
[4] ibid 37.
[5] ibid 44.
[6] Poggio and Boreiko, ‘Social Housing in Italy’, above, 120.
[7] ibid 118.
[8] The World Bank, ‘Municipal Public-Private Partnership: Framework – Project Summaries Part 2’ (2019) <https://ppp.worldbank.org/public-private-partnership/library/municipal-public-private-partnership-framework-project-summaries>.
[9] Sergio Copiello, ‘Achieving Affordable Housing through Energy Efficiency Strategy’ (2015) 85 Energy Policy 288.
[10] The World Bank, ‘Municipal Public-Private Partnership’, above, 41.
[11] Copiello, ‘Achieving Affordable Housing’, above, 293; The World Bank, ‘Municipal Public-Private Partnership’, above, 42.
[12] Copiello, ‘Achieving Affordable Housing’, above, 289.
[13] The World Bank, ‘Municipal Public-Private Partnership’, above; Poggio and Boreiko, ‘Social Housing in Italy’, above, 117.
[14] Interview with Emanuele Padovani, Associate Professor, Department of Management, University of Bologna (7 May 2021).
[15] Statement by Emanuele Padovani, Associate Professor, Department of Management, University of Bologna (LoGov Country Workshop, Local Responsibilities and Public Services, 28 April 2021).
[16] Statement by Emanuele Padovani, Associate Professor, Department of Management, University of Bologna (LoGov Country Workshop, Local Responsibilities and Public Services, 28 April 2021).
[17] Interview with anonymous expert, Department of Political Science, University of Milan (21 June 2021).
[18] Statement by Marco di Giulio, Research Associate, Department of Political Science, University of Genova (LoGov Country Workshop, Local Responsibilities and Public Services, 28 April 2021).