Public Expenditure for Housing: The Italian Case

Publicly financed positive action for housing may be justified on several grounds. One would hardly, however, consider as a good reason the pressure of the middle class to improve their living standards. In Italy, that pressure brought about a 25-year exemption from income tax on buildings for any nonluxury new housing, thus heavily damaging the source of revenue for local financing, particularly in expanding areas. The effectiveness of the low-cost housing programme financed through a 1 per cent tax on payrolls and additional State contributions, has been reduced by the fact that local authorities, who have to provide the land and the infrastructures, are increasingly indebted and finding it difficult to finance them, and by the complicated procedures for land condemnation and for the construction of these houses. The new law of 1971, which broadens the scope of the low-cost housing policy, has been impaired by similar factors and by additional bureaucratic complications, so that papers, rather than houses, have been produced. A much simpler solution, in which, at each regional level, global conventions—including land procurement, infrastructures, housing construction and/or urban renewal—are arranged with large contractors, is suggested.