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Case Study
Finance

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

Urban populations are growing, putting pressures on housing markets and prices. In the process, poorer segments of the urban population are pushed out of the city cores towards the peripheries, resulting in increased housing segregation. In an era of increasing economic inequality and decreasing economic mobility, housing segregation can make bad conditions worse.

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. Yet, cities operating in free market economies often prioritise attracting private investments and highly skilled talents. 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.

This presents a dilemma, as municipalities 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.

This case study was written by Dr. Luise Noring and is a co-publication of ICLEI, City Facilitators and Copenhagen Business School.

English

2018