Italy is a country where housing sits at the top of people’s worries and aspirations. Yet we spend far less than others to address the social problem of housing. How can we explain this paradox? In the past, social policies were centered around the pension of the male breadwinner, who typically owned his own home. Today there is fear of helping immigrants, and a reluctance to give money to municipalities governed by a political coalition different from one’s own. Let us hope that the housing plan for young people announced by Giorgia Meloni truly includes the construction of the student residences at subsidized prices originally envisaged by the NRRP and never implemented, as well as public housing, which has all but disappeared since the Fanfani plan of 1949. Blanket subsidies for construction only serve the industry lobby. Housing is an issue of equality, mobility, and social cohesion—and must be addressed as such.
If there is a country in which housing is at the center of people’s attention, that country is Italy. Eight out of ten households living in the peninsula reside in a home they own, on which they have invested their life savings: over 60% of households’ net wealth is invested in real estate—more than in France and Germany, double the level in the United States. Time-use surveys show that Italians spend almost two hours a day cleaning their homes—much more than elsewhere. Needless to say, it is mostly women who shoulder this burden, often in addition to paid employment. In 2006, Silvio Berlusconi, by promising the abolition of the property tax (ICI) on primary residences just days before the election, nearly managed—missing by only a few thousand votes (25,000 to be exact)—to overturn the predictions of a resounding electoral defeat. And it is no coincidence that Italy is the homeland of the most convoluted home-renovation subsidy ever conceived: the 110% Superbonus, which has opened a gaping hole in our public accounts.
Housing and Social Mobility
Housing is, in fact, a watershed in people’s lives. It is one of the most sung-about words because individual and family well-being depends on it. Let me go home is the refrain of a beautiful Michael Bublé song: as in his lyrics, far from home one feels lonely even when surrounded by millions of people. Housing conditions determine the ability to reconcile private life and work—especially now that remote work, literally “working from home,” is so widespread. For those renting—especially young people—housing absorbs more than a third of the household budget. For those buying, the mortgage payment determines how tight their budget constraint is. Local cost of living trends are largely determined by housing prices. Social mobility is closely linked to where one lives; often a move of just one neighborhood is enough to change one’s destiny. The right to education means, above all, access to affordable student housing (which is not the case for those built in Milan for the Milano-Cortina Olympics). In short, housing is the primary source of social inequalities.
An Italian Paradox
And yet in Italy—the country where everyone, absolutely everyone, puts housing at the top of their concerns and aspirations—policies aimed at combating poverty and promoting equality of opportunity ignore housing entirely. We are the country in Europe that allocates the least resources to housing subsidies for indigent families. Eurostat data tell us that Italy spends, as a share of GDP, one-third of what Spain spends on “housing benefits,” one-tenth of Sweden, one-twentieth of France and Germany, and an astonishing one-two-hundredth of the United Kingdom. We disburse the so-called “rent contribution and accessory expenses” on average two years after households have incurred those costs, making the instrument inaccessible to those who cannot afford to go into debt. True, we have relatively generous mortgage interest tax deductions. But they increase inequality instead of reducing it: poorer families have incomes below the tax threshold and therefore have no way to make use of those deductions.
We have not built public housing, except in symbolic numbers, since the Fanfani plan of 1949, which together with the INA-Casa program produced nearly 350,000 public housing units. The NRRP could have been an opportunity to finance large-scale subsidized housing interventions, but public-housing construction programs in municipalities were the first to be cut in the Meloni government’s revisions of the plan. At the Rimini meeting, Prime Minister Giorgia Meloni announced a housing plan for young people, entrusted to Minister Salvini, but so far the only plan he has floated (among the thousands of public utterances he offers daily) concerns the construction of the Messina Strait Bridge. Not exactly the same thing.
Housing for Young People and Immigrants
Why does our social protection system ignore housing? In the past because it focused on protecting a male breadwinner who almost always owned a home. Today because in many cases the main beneficiaries of assistance would be immigrants, who are overrepresented among those seeking housing with low incomes. But when one admits a million immigrants over the course of a legislative term—as envisaged by the labor-migration quotas introduced by the Meloni government—one cannot fail to consider that their integration depends first and foremost on providing housing at prices they can afford. With immigration come people, not just “pairs of hands.” It is irresponsible not to think about housing for newcomers.
Our welfare system also ignores housing because it has not yet adapted to demographic decline. Today all efforts should be focused on trying to halt plummeting birth rates. Housing plays a crucial role in this context. Young people can hardly start a family and have children while forced to live with their parents because they cannot afford a home of their own. As we document, rents in provincial capitals have risen by an average of 30% in five years, with peaks of 40–50% in Milan and Florence.
Responsibilities of the State and Local Authorities
Another reason Italy is “cross-eyed” when it comes to housing is that subsidized-housing policies are delegated to municipalities—just as anti-poverty policies were for decades. Today, population growth occurs only in large cities—and with it, the demand for housing. Resources for public housing should be concentrated precisely there rather than scattered in a thousand streams. This is true even when the political color of those governing the major cities differs from that of the national government, as is currently the case in Italy. National housing policies should not take local political alignments as their reference point but rather housing prices, which in cities like Milan have reached levels higher than in many European capitals, as we extensively document in this issue of eco.
Clearly, the municipalities involved must also do their part, despite the budget cuts they have suffered in recent years. They could do so by taxing—at least to the same extent as other European countries—the capital gains of large landowners whose land-use designation is changed, for example allowing it to be converted into residential use. National regulations make it possible to require extraordinary contributions from private actors amounting to at least 50% of these gains, but the principle is largely ignored because of strong pressure from construction lobbies, and because the Regions have adopted the rules on extraordinary contributions (Article 16 of Law 164 of November 2014) in an evasive and partial manner.
A Flywheel Only for the Construction Lobby
Construction lobbies have also succeeded in obtaining massive state aid over the years by feeding the narrative that supporting construction stimulates a country stuck at “zero-point-something” growth. The claim that construction is the engine of the economy has no foundation; it is simply the legacy of a worldview from the first half of the last century, when services had a limited role in the economy and what counted were the “things” produced—preferably large and visible to all, such as houses and construction sites. A worldview, to be clear, that permeated the five-year plans of Stalin and Mao Zedong, with their obsession for tons of cement, iron, and steel produced; what they were used for was less important. In 1960, construction accounted for 14% of Italy’s GDP; in 2020, before the Superbonus “high,” just over 4%; services—i.e., the “immaterial economy”—today account for 72% of GDP.
This is certainly not the kind of anachronistic concentration of public resources on construction that we need. Housing is a social problem. It is a problem of equality of opportunity, mobility, and social cohesion. It must be addressed on this level.
P.S. The next issue, on newsstands November 15, will focus on in-work poverty.
