Opening the Door to Social Housing in the US: Learning from the Italian Model

Author: Ben Metcalf

International models for social housing have gained relevance in the US in recent years. Policymakers and practitioners, increasingly frustrated by slow market-rate housing construction and limited funding for affordable housing, are exploring alternative models abroad. This summer, I had the opportunity to study one of these models, spending seven weeks in Italy as the inaugural UC Berkeley-affiliated Fellow in Social Housing at the American Academy in Rome. This fellowship provided an interesting opportunity to explore historic social housing communities, some nearly a century old, and visit in-progress social housing projects. My fellowship included collaboration with the Sapienza University of Rome, where I engaged with Italian faculty and participated in knowledge sharing convenings.

Italy is typically not the first place United States housing professionals look to for inspiration. Cities like Copenhagen, Vienna, and Singapore often receive more attention for their highly developed social housing models. However, it feels daunting to replicate these models in the US, since they are grounded in long histories of substantial public investment in social housing. In contrast, Italy’s approach to social housing–which has been more intermittent and not accompanied by sustained public investments–could offer a more relatable model. Italy and the United States share other similarities: high homeownership rates, difficulties in unlocking new market-rate rental housing, and political polarization.

In this commentary, I briefly describe the history of 20th century Italian social housing, highlighting some of the reasons it may have stood the test of time better than contemporaneous US public housing. I also lift up a successful modern-day example of Italian social housing that may warrant further exploration in the US context.

Social Housing Defined

Social housing is typically understood as housing that serves lower or moderate income households and is financially assisted in some way by the government. Social housing frequently sits on land contributed by the public sector, with rents affordable to low- and/or moderate-income households and built-in tenant protections. Social housing typically serves a mix of incomes, which helps to cross-subsidize the development. While it has historically been used as a synonym to the American term “affordable housing,” its contemporary usage typically implies something distinct from the more deeply subsidized affordable or public housing model in the US.

Context and Governance

Italy’s initial foray into social housing began in the early 1920s alongside programs emerging across Europe in response to the pressures of urbanization. However, it was not until after World War II that substantial funding was made available through the “Ina-Casa” program and its successor “Gescal” program, funded by both the national government and compulsory contributions by workers and their employees. These programs produced some 800,000 homes between 1951 and 1970. Although job creation was the primary political motivation, these housing programs were also described as a response to a crisis of urban immigration and were intended to provide higher quality housing with amenities like indoor plumbing and heating. ¹ The Italian social housing model relied heavily on regional and municipal governments to oversee implementation and ensure alignment with existing regional and urban plans.

While 1930s era public housing in the US was directly inspired by European social housing models that preceded it, it was constrained by particularly American politics and sensibilities. Powerful homebuilding and real estate lobbies invoked the specter of communism to constrain its funding and narrow its mission. In addition, federal funding for public housing in the US bypassed states and required cities to form new autonomous public agencies (Public Housing Authorities, or PHAs). While this autonomy gave PHAs a freer hand in implementation, it did not require integration with broader citywide services, amenities and regional plans.

Planning and Typology

Italian social housing, at least in the major cities, was typically integrated into pre-existing urban master plans and built at-scale with a focus on quality design, using longstanding construction methods and resulting in mid-density walkable communities. In Rome, the agency responsible for implementing social housing investments was headed by professional architects who saw this as an opportunity to construct quality housing that would feel like a natural extension of the existing city fabric. To make that possible, Italian social housing incorporated transit access and a range of commercial and civic amenities. For example, the 1950s era Ina-Casa Tuscolano neighborhood in Rome incorporated schools, shops, and churches in a design centered around six- to eight-story courtyard buildings housing over 18,000 people. ²

Public housing in the US less frequently leveraged pre existing public land holdings and instead relied heavily on eminent domain, reflecting a historic linkage between public housing, slum clearance, and urban renewal efforts. Government officials used the prospect of new federal funding for public housing to demolish existing neighborhoods, removing existing dilapidated housing stock and displacing entire communities – disproportionately Black, brown and immigrant – in order to address perceived concerns of crime, wayward morals, and economic disinvestment. Designing communities in the wake of cleared urban neighborhoods, American planners accordingly felt empowered to work from a clean slate – for example, embracing newer building technologies of concrete and steel that ruptured the surrounding vernacular architecture, or breaking with the urban street grid in order to create disconnected superblock islands. While this offered some design benefits, over the longer term it often furthered a sense of isolation and stigmatization, compromising the long term success of these communities and leading to comprehensive redevelopment efforts. ³

Target Population

In Italy, social housing was reserved for lower-income working families and the families of workers employed in a relatively wide range of middle class professions, including civil servants, service workers, and manufacturers.⁴ Subsequent generations have continued to choose social housing, with the same families often spanning generations of occupancy in a given building.

By contrast, US public housing served narrower segments of the population. In its initial decades, public housing employed a “separate but equal” logic of distinct Black-only and white-only public housing communities, with Black-only housing often intentionally sited in more resource-poor, amenity-constrained locations to reinforce racial segregation. Furthermore, public housing focused on serving households with the lowest incomes – due at first to an informal bias that housing should be reserved for those most in-need, and later to legislative mandates expressly reserving public housing for only the poorest households.⁵

Homeownership Focus

Italy’s social housing investments were undergirded by a presumption that they should offer residents a path to homeownership. A large share of newly built social housing was immediately converted to homeownership, while communities initially constructed as rental communities gave tenants an option to buy after residency of five to ten years.⁶ While this significantly reduced the overall stock of social rental housing over time, the whole or partial conversion of housing to owner-occupation mitigated inconsistent public investment by motivating residents to remain and reinvest into their communities.⁷

By contrast, US experiments with homeownership initiatives in the public housing inventory rarely made it to scale. Instead, incentives for homeownership have been provided outside the public housing system, manifested through federal guarantees that unlocked favorable mortgages and generous tax benefits for owners of market-rate housing.

Restarted Commitment

Italy’s investment in new social housing had largely halted by the 1980s as the political climate and the government’s budget priorities shifted, mirroring a broader shift across Europe and the US. However, in the late 2000s, federal regulatory incentives restarted Italy’s social housing efforts with the creation of funds which have since amassed more than €3 billion in investment capital to fuel a new generation of social housing construction. This in turn led to the growth of a new category of nonprofit social housing intermediaries, such as the Fondazione Housing Sociale (FHS) in Milan. FHS serves as a technical advisor to developers and property managers by, for example, creating a widely adopted framework used to quantify the financial and economic benefits of social housing.⁸

Fund investors, working in coordination with advisors like FHS, have unlocked social housing opportunities in high-demand areas without direct national government funding. Yet they have done so in ways that draw on the successful at-scale social housing practices of the past century – building middle density, mixed-income and mixed-tenure walkable communities. This time, however, private nonprofits have a much larger role. Capital primarily comes from corporate entities such as banks, pension funds, and insurance companies seeking socially responsible investment opportunities offering a 2-3% real return over a thirty year term. These funds are complemented by the active partnership of regional governments, who contribute capital (as hard loans that require repayment but are made at low to no interest rates), free land, tax exemptions, and other indirect benefits like zoning relief and expedited approvals.⁹

If funding gaps remain, groups like SHF typically raise funds through the sale of entry-level condo units. Condo units are sold at or near market prices, and the profits cross-subsidize larger social housing projects. SHF makes social housing rental units available at rents set above operating costs, but 20 to 30% below comparable market rents. This means that these projects are typically located in communities with higher market rents and for-sale prices (often in northern cities like Milan). When financially feasible, FHS will further lower rents on 10% of units to deeply affordable levels, relying on an internal cross-subsidy to cover operating costs.

Redo Merezzate in Milan is an example of this new generation of social housing projects. Opened in 2019, it was planned and built with FHS involvement on land contributed by the Lombardy regional government and is connected to downtown Milan via rail and bus lines. It offers 615 units and a range of amenities across a network of connected buildings, including a grocery store, gym, and event space. Of the 615 units, 211 were offered for sale as entry-level condominiums, 68 were set aside as deeply affordable rental units, and the remainder were reserved for low- or moderate-income households who could afford rents at 30% below comparable market rate units. Other than a commercial construction loan for the condos, the project is financed entirely by a social housing investment fund, with about one-third of the capital sourced from national investors and two-thirds from regional investors.

The project’s designers aimed to construct small, simple units while incorporating quality exterior design and community spaces,such as a basketball court, community gardens, and a book lending library,all of which were tightly linked to engagement of the residential community. Of note, FHS and an on-site social manager helped residents determine community spaces and uses, and trained residents on a web-based app designed to facilitate community connections. This was most apparent through a series of ten pre-occupancy workshops, which residents were obligated to attend beginning six months prior to move-in and concluding after one year of occupancy.¹⁰

Conclusion

While Italy’s contemporary social housing model has limitations, such as the obligation to eventually repay investment funds (rather than reinvest into future social housing communities) and regional disparities in the viability of the model, it demonstrates an interesting middle ground between deeply subsidized housing and conventional market-rate housing. It also builds on Italy’s successful legacy of designing lasting large-scale social housing communities that have delivered benefits to generations of residents and communities.

Looking at these historic Italian social housing communities and studying Italy’s contemporary efforts in places like Redo Mezzerate can offer lessons for the US as we navigate our housing crisis, and should encourage us to grapple with important questions: How can we innovate to more effectively expand the supply of affordable housing? Can the US unlock new sources of lower-cost capital from corporations and/or public agencies? Can we make public lands more readily available for housing development? Can we better integrate income mixes and tenures? What are the design strategies that increase the likelihood of long-term success? What role should governance models and tenant participation plan in these efforts? Returning to building affordable housing at scale is a challenge, but Italy’s experience suggests that innovative approaches can make an impact.

Acknowledgements

I’d like to thank Elena Fu who provided research assistance as part of an academic internship as well as Sarah Karlinsky, Carolina Reid, and Geraldine Slevin for their review of this commentary. I am also grateful to Dan Solomon and Robert Davis for their support of the UC Berkeley Social Housing Fellowship which enabled me to undertake a field study project to Italy in May and June of 2024. This commentary does not represent the institutional views of UC Berkeley or of the Terner Center’s funders. Funders do not determine research findings or recommendations in Terner Center’s research and policy reports. 

 

Endnotes

¹ Padovani, L. 1996. ‘Italy.’ Pp. 188-208 in P. Balchin (ed.) Housing policy in Europe. London: Routledge.

² Pilat, S. Z. (2014). Reconstructing Italy: The Ina-Casa neighborhoods of the postwar era. Routledge.

³ Vale, Lawrence (2018). After the Projects: Public Housing Redevelopment and the Governance of the Poorest Americans. Oxford University Press and Chaskin, Robert and Mark Joseph (2015) Integrating the Inner City: The Promise and Perils of Mixed-Income Public Housing Transformation.. University of Chicago Press.

⁴ Pilat, S. Z. (2014). Reconstructing Italy: The Ina-Casa neighborhoods of the postwar era. Routledge.

⁵ Chapter 6 of Schwartz, A.F. (2021). Housing Policy in the United States (4th ed.). Routledge, Penner, Barbara: The (Still) Dreary Deadlock of Public Housing Places Journal (Oct 2018) and Bauer, Catherine “The dreary deadlock of public housing — how to break it,” Architectural Forum (June 1957)

⁶ Poggio, T. (2012). The housing pillar of the Mediterranean welfare regime: Relations between homeownership and other dimensions of welfare in Italy. In R. Ronald & M. Elsinga (Eds.), Beyond homeownership: Housing, welfare and society.

⁷ Poggio, T., & Boreiko, D. (2017). Social housing in Italy: Old problems, older vices, and some new virtues? Critical Housing Analysis, 4(1), 112-123.

⁸ Cariplo Foundation. (2016). A program for social housing. Abitare Sociale 1, and Pogliani, L. (2016). A new frame for social housing in Italy. Working paper, ENHR 2016 conference. Belfast, 28 June to 1 July.

⁹ Interviews by the author with FHS staff, June 2024

¹⁰ See: https://www.fhs.it/progetti/residenze/redo-milano/