3. Housing

People need sufficient space in their homes for privacy and health, and to fulfil all the functions that a home should provide, such as space to study, spend time with family or entertain (OECD, 2011[1]). In 2017, 11.6% of OECD households were living in overcrowded conditions, on average (Figure 3.2) – based on a definition that takes into account the different needs of different household members (see Box 3.1). Overcrowding rates exceed 30% in Mexico, Latvia and Poland, falling to 2% or less in Ireland and Japan. Between 2010 and 2017, overcrowding rates fell by 1 percentage point or more in around one-third of OECD countries, and by 2.6 percentage points for the OECD average. The most significant falls occurred in Slovenia (-19.8 percentage points), Lithuania (-19.1) and Latvia (-14.2). By contrast, overcrowding increased by one percentage point or more in Italy (3.4 percentage points), the United Kingdom (2.6), the Netherlands (2.2) and Austria (2.0).

When a high share of disposable income is spent on housing, this reduces what households can afford to consume and save to support other aspects of their well-being. In 2018, households in 34 OECD countries had, on average, 79.2% of their disposable income available after housing costs (Figure 3.3). This falls below 76% in New Zealand, the United Kingdom and the Czech Republic, but is above 82% in Korea, Estonia and Hungary. Since 2010 there has been little movement in the OECD average, but this masks divergent country trends. For example, housing affordability fell in Portugal (-2.7 percentage points) and Finland (-2.3), but improved in Hungary (up 3.8 percentage points) and the Slovak Republic (2.3).

Low-income households are particularly vulnerable when a high share of their income is devoted to housing costs, since this limits spending on other basic essentials, such as food, health care and education. The measure of housing cost overburden shown below focuses on the share of households in the bottom 40% of the income distribution who spend more than 40% of their disposable income on housing (i.e. rent and mortgage costs). In the average OECD country, 18.2% of lower-income households were overburdened by housing costs in 2017 (Figure 3.4). Greece, Chile, Spain and Luxembourg had the highest overburden rates (over 29%), while rates were lowest in Korea, Latvia, the Slovak Republic and Switzerland (below 9%). Between 2010 and 2017, the OECD average overburden rate was broadly stable. However, changes varied across countries: the largest increase in overburden rates occurred in Chile (17.0 percentage points), Hungary (15.3), Luxembourg (12.7) and Greece (10.5), whereas Lithuania, the United Kingdom and Ireland experienced the largest falls (of more than 5 percentage points).

A lack of basic sanitary facilities, such as an indoor flushing toilet, is a clear sign of poor quality of housing and poses a high risk to health (Eurofound, 2016[3]). Since the majority (95.6%) of households in OECD countries have an indoor flushing toilet for their sole use (OECD, 2019[4]), the indicator shown below focuses on poorer households – defined as those having an income below 50% of the median equivalised disposable household income of their country. In 2017, fewer than 3% of poor households lacked basic sanitation in around two-thirds of OECD countries (Figure 3.5). However, in Mexico, Lithuania and Latvia, over 25% of poor households lived without indoor flushing toilets. By contrast, nearly all poor households in Germany, Iceland, Norway, Sweden, Switzerland, the United Kingdom and the United States had such facilities in their dwelling.

Between 2010 and 2017, access to basic facilities for poor households improved in most OECD countries. The OECD average share of poor households lacking an indoor flushing toilet fell from 8.8% in 2010 to 6.8% in 2017. The greatest improvements occurred in Estonia (a fall of 12.5 percentage points), Latvia (-11.4), Hungary (-11.3) and Korea (-8.0). However, in Mexico and Belgium, the share of poor households lacking an indoor flushing toilet for their sole use increased by 1.5 percentage points or more.

Internet access in the home can support social connections, provide access to job opportunities and to both public and private goods and services, and support the development of human capital among household members. In 2018, more than 80% of households in 29 OECD countries had access to broadband internet services, on average (Figure 3.6). Overall, the range was from fewer than 60% in Mexico, to more than 95% in Korea, the Netherlands and Iceland. Between 2010 and 2018, almost all OECD countries experienced a large increase in internet access. The OECD average rose by more than 20 percentage points, up from 63.1% in 2010 to 85.2% in 2018. The largest gains took place in Turkey (49 percentage points) and Greece (35). By contrast, Korea and Sweden started from a relatively high base in 2010, and as a consequence experienced only small increases (2.6 and 7.3 percentage points, respectively).

Several of the measures explored in this chapter, such as housing cost overburden and poor households without access to basic sanitary facilities, are deprivation measures. Since they are measured at the household level, it is challenging to calculate differences in deprivation rates between population groups (such as men and women, the young and old, or people of different education levels). Where data have sufficient spatial resolution, however, regional differences in housing conditions can be assessed.

The differences in high-speed internet access between urban and rural areas are large in most OECD countries (Figure 3.7). In Greece, Portugal, the Slovak Republic, Spain, Lithuania, Hungary and Ireland, the gap in high-speed internet access between large urban areas and rural areas exceeds 11 percentage points. By contrast, the smallest differences (below 1 percentage point) are in Iceland, the Netherlands and the United Kingdom. A similar pattern exists when comparing small urban areas and rural locations – though these gaps tend to be less pronounced than those for large urban areas.

References

[3] Eurofound (2016), “Inadequate housing in Europe: Costs and consequences”, https://doi.org/10.2806/810142.

[5] Eurostat (2019), Statistics Explained: Housing cost overburden rate, https://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Housing_cost_overburden_rate (accessed on 23 December 2019).

[2] Eurostat (2019), Statistics Explained: Overcrowding rate, https://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Overcrowding_rate (accessed on 23 December 2019).

[4] OECD (2019), Better Life Index, http://www.oecdbetterlifeindex.org/topics/housing/.

[1] OECD (2011), How’s Life?: Measuring Well-being, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264121164-en.

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