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Financing the inclusive city: a case study of the Danish model of affordable and social housing

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Normally, the task of providing affordable and social housing falls to local governments and their administrations. Municipalities must single-handedly work out how to deliver and finance affordable and social housing in a city context that is often dominated by a free market paradigm. However, cities operating in free market economies often prioritise attracting talent and investment, which often contradicts efforts to provide affordable and social housing, as the capital gains achievable from these are diminutive in comparison with the gains from other, more profitable development and infrastructure investments.

 

The logic follows that private capital always chooses the investments with the highest returns. As affordable and social housing rarely yield high returns, the task of providing it falls on municipalities; however, these are often strained for public finances and face a multitude of conflicting investment demands. The question is then: How can cities provide affordable and social housing with a shortage of fiscal resources and a multitude of conflicting political demands? This report presents a self-governing and -financing model of providing affordable and social housing.

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