Higher Education Strategy Associates

Learning From Other Policy Areas: Housing

Sometimes, I think we spend too much time trying to learn from policy in other countries and not enough time learning from related policy areas in our own country.

Take housing, for instance – probably higher education’s closest relative in policy terms. Choosing a home, like choosing an undergraduate degree, is a major decision with enormous financial implications, but both can be foreseen many years in advance, allowing people to plan for the purchase. Shelter and education are both considered to be “rights,” but we ask people to pay for them both. In addition to their status as public goods, a substantial benefit of both housing and higher education are private. The subsidy picture is a similar mix of non-repayable aid for the poor (grants in our field, social housing and housing vouchers in the other), and assistance via loans for everyone else (CSLP, CMHC insurance). Finally, both are to some degree positional goods; not every degree is from Harvard, not every house is in Westmount, and the location of your alma mater/house determines its value to a substantial degree.

So, what can we learn about ourselves from looking at housing?

First, education policy is big on encouraging savings – so why is there no Canada Education Savings Grant equivalent for housing? (Ok, arguably the home mortgage interest tax deduction in the U.S. is pretty close.) But in Canada, I’d guess the reason we don’t is that everyone would think it’s a stupid idea to help those most able to help themselves. So why doesn’t that logic apply to education too? Hmmm.

Second, housing policy also has a much more limited view about the state’s role in minimum provision. There is a “right to housing,” but that tends to mean things like emergency shelter, a spot in sometimes quite decrepit social housing, etc (that is to say, a good which is significantly inferior in quality to what most people have). In higher education, on the other hand, that right is seen as a right to a shot at just about any form of education, provided you think you can pay back the loan.

Third, there is the way that loan assistance is targeted. Student loans are needs-tested, but CMHC mortgage insurance isn’t. Why is that? Should there be a needs test on loans? Should we introduce one on mortgage insurance? Why would we do one and not the other?

Obviously, there are some differences between the two sectors which make some policy differences natural. The most is the nature of the underlying asset; a lender can repossess a house but can’t repossess a degree. But the similarities are enough that wonks in both fields could benefit from spending more time learning from one another.

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One Response to Learning From Other Policy Areas: Housing

  1. Pingback: An Avalanche of Nonsense | HESA

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