The provision of safe and secure housing for people who might not otherwise be able to afford it is fundamental to the civic health of any country or jurisdiction.
Questions about how to best allocate the finite resources of housing stock available for this purpose, though, are evergreen, and continue to rumble on both in Jersey and across the globe.
Policymakers have a range of options available to them for determining the amount of rent that should be paid by social housing tenants, but famously disagree on the most optimal choice.
Jersey, for example, use what is referred to as the “market-based rental model”.
This model, introduced in 2013 through the Housing Transformation Programme, sets rents at a percentage of ‘market value’, which is the rent tenants would be paying for their housing on the private market.
READ: More islanders can access social housing as eligibility changes come into force
The cap was initially set at 90% of market value before shifting to 80% in 2022 following amendments to the 2022-2025 Government Plan.
Over 5,000 of Jersey’s approximately 6,400-strong social housing stock are owned and managed by Andium Homes; a wholly States-owned, not-for-profit housing company.
Andium are permitted to apply annual rent increases within a range of 2.5% and 4%, as long as any increase stays within the 80% market value ceiling.
A review of social housing rents conducted in January found that the system was generally working well to deliver its stated aims of affordability for low-income tenants and financial viability for housing providers.
Although several problems were identified – including unintended “rental drifts” for historic tenants and rising operational costs on the business side – it was decided that only “modest” changes were necessary to keep the ship on course.
Explained below are some examples of how alternative social housing rental models are used in other jurisdictions.
England
In England, social rents historically hover at around 50% of the market rate, but aren’t determined exclusively by market forces.
Instead, a “government formula” takes into account factors including property characteristics, market values and local income levels within the area.
Types of social housing – often called council housing – include local authority and housing association.
Social housing stock, though, is scarce – and according to charity Shelter there are over 1.3 million households currently languishing on social housing waiting lists.
United States, New Zealand, and Ireland
These jurisdictions deploy an “income-based” model, wherein rents are capped at an agreed percentage of the tenant’s income.
In the USA, rents are capped at no more than 30% of the tenant’s gross income, while in New Zealand rents are set at 25% of household net income, rising to 50% for higher-income households.
Both countries’ governments then step in to cover the difference between the capped and market rent.
In Ireland the premise is broadly similar, but rent is set on a more ad-hoc basis and subject to changes in household circumstances.
The January housing report considered this system as a potential “major change” to Jersey’s existing social housing rents policy.
The review acknowledged that an income-based model “promoted equity by basing tenant contributions on ability to pay rather than market rents or fixed thresholds.”
But it also found that implementing a new system would be “administratively complex” and could lead to rents falling below market levels, thereby “reducing rental income for social housing providers.”
“The operational complexity and legal implications make it highly impractical within current policy and legislative frameworks”, it concluded.
Never mind then!
Australia and Canada
Both the Aussies and Canadians use a “dual” rental model for social housing, in which two separate models run alongside each other.
In Australia, rent is capped at 25% to 30% of gross income, and welfare payments meet the difference between the capped rent contribution and the full market rent.
For Canada it’s the reverse, with rents principally dictated by market prices, and income-based models only coming into play for low-income households.
From there, a government subsidy fills in the blank between what is called ‘rent-geared-to-income’ and market rent.
Like England, both countries currently face widely reported deficiencies in social housing stock – an issue that some argue undermines the subtlety of the approach.
The Netherlands
For the Dutch, it is simple, the Woningwaarderingsstelsel (Housing Valuation System) is a “characteristics-based” model that takes into account quality indicators as various as available amenities and energy efficiency.
Effectively a ‘points system’, the policy helps determine a “maximum” permissible rent for tenants living in social, or ‘regulated’, housing.
An Affordable Rent Act was introduced there in 2024 that expanded the points system to accommodate a greater number middle income tenants who felt left out in the cold by an increasingly expensive private rental market.
Scotland
By comparison, the Scots take a slightly more relaxed approach – and don’t currently have an official policy or formula for the setting of social housing rents.
Instead, social housing providers allocate rents based on a combination of local discretion, national guidance and tenant input.
It’s not a hard-and-fast rule, but rents in these cases generally reflect property size, location, management, maintenance costs and tenant affordability.
Scotland do, though, have a separate tier for mid-market properties – here employing a traditional market-based model, with rents set at around 20% above social housing rents or 80% of median private sector rents.
Germany, France, Finland and Austria
The four countries here employ a “cost-based” model, with rents reflecting the costs of constructing and maintaining the property in order to facilitate long-term cost recovery.
This model – generally viewed as one of the more ‘welfare-friendly’ options – for the most part manages to avoid the ‘means-tested’ element integral to other rent-setting systems.
By accepting public subsidies, German landlords – for example – agree to strictly cost-based rents which allow for a modest profit.
Similar models – with notable permutations – exist in France and Finland.
The pièce de resistance, however, of the cost-based model can be found in Austria and its capital city, Vienna.
Much like England and the NHS, Vienna is inextricably linked with its world-leading provision of social housing: astonishingly, over a quarter of its population are social tenants.
For these tenants rents remain abnormally because a large percentage of social housing stock is owned by the city, who set prices using funding tied to a fixed 1% of income taxation.
Despite being dethroned in 2025 by Copenhagen, the Alpine capital city enjoyed a winning streak as the ‘Most Livable City’ in the world, according to the Economic Intelligence Unit’s Global Liveability Index.
It begs the question: dare Jersey take note?