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Global Regulatory Framework Report Card: Public And Nonprofit Social Housing Providers

Analytical Approach

Regulatory framework and systemic support (RF) is a recently introduced factor in the enterprise risk profile (ERP) for public and nonprofit social housing providers' (housing providers') ratings. This assessment is different from our view of the likelihood of extraordinary support from a related government when we consider a housing provider to be a government-related entity (GRE); therefore, if there is an uplift provided by the GRE approach, it would not overlap with the RF.

Through RF, we capture ongoing and exceptional systemic support. Ongoing support includes direct grants from the government, access to guarantees from the government, and so on, whereas systemic exceptional support can be provided in the form of a one-off grant program. This is different from our assessment of the likelihood of extraordinary support from a government when a housing provider faces financial distress.

Therefore, RF is a key factor when assessing housing providers' ERPs, because it defines the environment in which housing providers operate in a particular country. In our view, RF influences the positioning of housing providers in their respective markets and has a significant bearing on housing providers' financials. Also, we believe that RF complements the industry risk assessment, which emphasizes comparability of global industry risks in terms of cyclicality and competitive risk without consideration of country-specific aspects.

Our analysis of the regulatory framework and systemic support reflects two main considerations: our view of the public policy mandate and regulatory mechanisms; and our view of the systemic support or negative intervention and fiscal framework.

We first assess to what extent the framework under which housing providers are established in a particular country entrusts them with a public policy mandate that firmly anchors their role and status as essential service providers. We also assess whether the relative strengths of the framework provide a protective, safe, and stable operating environment. Among other factors, regulatory stability and predictability affect the capacity of entities active in the sector to make strategic decisions, including viable and realistic multiyear investment plans. Governmental oversight of the sector and the quality of accounting and public disclosure standards are also key in informing our view of how systemic or individual situations of stress could be detected and remedied if support exists.

In a second stage, we assess the effectiveness of the fiscal framework in providing financial stability, either through various forms of systemic ongoing and exceptional support provided by a government (or associated regulatory authority) or through an adequate revenue/expenditure match or sufficient flexibility and autonomy to redress a potential financial imbalance. Conversely, we also track precedents of systemic negative intervention in order to assess whether such circumstances could recur. We define negative intervention as an action or series of actions performed by a government (or associated regulatory authority) that may have a detrimental effect on the sector's creditworthiness if not adequately compensated.

We generally expect all housing providers within a single jurisdiction to carry the same assessment, but we recognize that there may be situations where two providers (most often two different classes of provider, for example, nonprofit social housing providers and public housing authorities in the U.S.) within the same jurisdiction may carry different assessments as a result of being exposed to a different regulatory framework and systemic support. We acknowledge that in some countries, subnational governments set up most elements of the regulatory framework for social housing providers, hence our RF assessments may vary within one country.

Comparative Analysis Between Frameworks

Our RF assessment for most rated social and public housing providers is strong or very strong. Relatively high assessments reflect in our view the location of the rated entities in developed countries.

Affordable housing, one of the key areas of U.N. Sustainable Development Goals (Goal 11: Make cities and human settlements inclusive, safe, resilient and sustainable), usually has strong public policy presence in these countries and has support across the political spectrum, since it has a direct impact on voters' welfare. The unique status of Kainga Ora as a New Zealand Crown Agency defines the outstanding position of its RF, which we view as extremely strong.

Rated providers in other countries operate more independently. Nevertheless, many receive substantial ongoing support from their respective governments in the form of large/adequate development grants (U.K. devolved regions), guarantees (Netherlands), below par lending from state-related financial institutions (France), or a combination of these (Canada).

In our view, rated housing providers in some jurisdictions receive less systemic support and might even suffer from negative interventions in the form of rent cuts and caps or pressure to increase spending on maintenance or investments (England), or policies that result in reduction in units in the sector (Israel). However, we consider that there is some benefit from stronger than average regulatory oversight (for example, England and Scotland).

The size of subsidized rental housing varies across different nations, with some taking over half of the rental stock in a country. The focus of the housing policy also varies across different countries--for example, some prioritize affordability of rental properties, while others focus on the availability of additional units in response to different demographic factors. The subsidy and ongoing government support also comes in different forms, such as direct state subsidies, capital grants, subsidized funding, often determined not only by the policy focus but also the fiscal space a supporting government has available.

HOW WE INDIVIDUALLY ASSESS THE REGULATORY FRAMEWORK FOR SOCIAL HOUSING PROVIDERS

Country: Australia

Regulatory framework: Queensland community housing providers

ASSESSMENT: 2

Rationale:  Nonprofit housing providers are governed by both federal and state legislation and regulations. Queensland community housing providers (CHPs) and state-owned providers are subject to the Queensland state Housing Act 2003 and Housing Regulation 2003. These Act and Regulations provide powers and responsibilities to the state Department of Housing and Public Works to improve access to safe, secure, appropriate, and affordable housing, and to help build sustainable communities. It allows the department to support CHPs.

Oversight and monitoring mechanisms are well established. The national industry development framework for CHPs provides a national approach to industry capacity and high-level guidance for the development of locally appropriate jurisdictional strategies. The national regulatory system for community housing (NRSCH) and the national community housing standards (NCHS) provide a system for the registration, monitoring, and regulation of CHPs to encourage the development, viability, and quality of housing. They also provide minimum standards for tenancy and asset management, and governance. Queensland CHPs must be accredited and registered to operate.

Within Australia, to be registered as a charity and display a public policy mandate, CHPs must register under the Australian Charities and Not-for-profits Commission (ACNC). This also provides tax advantages to CHPs.

The NRSCH and NCHS set important benchmarks for governance, risk management, strategic planning, construction, development, finance, regulation, and workforce development. The NRSCH enforces a three-tier regulatory approach, based on CHP risk profiles. Tier 1 providers face the highest level of performance requirements and regulatory engagement; tier 2 providers face an intermediate level of performance requirements and regulatory engagement; and tier 3 providers face a lower level of performance requirements and engagement.

Public disclosure of CHPs lags other sectors. Many CHPs' financial reports come under the ACNC requirements that allow them to publish limited financial information. CHPs must follow the Australian Accounting Standards Board, and can elect to be nonreporting entities. Full financial statements are prepared, independently audited, and submitted to the ACNC.

The Commonwealth government provides ongoing support via social welfare, including rental assistance. The Commonwealth established the National Housing Finance and Investment Corporation to provide low cost, long-term loans for eligible CHPs. Both Commonwealth and state government can provide capital grants for housing developments. These are generally ad hoc, and reflect public policy decisions rather than supporting individual CHPs. Like all Australian businesses, CHPs are responsible for the pension payments of employees, but most, if not all, employees are in defined-contribution pension schemes. Any legacy pension risks of state-owned operators would be covered by the State of Queensland.

We do not believe there are major incidents of negative intervention from the Queensland or Commonwealth government on the sector, and we do not expect future negative interventions.

Primary analyst: Anthony Walker 

Country: Canada

Regulatory framework: Province of Ontario social housing providers

ASSESSMENT: 2

Rationale:  Under the Canadian constitution, the authority for housing is vested in provincial governments, which provide a well-established, stable and predictable framework to the housing providers. In the Province of Ontario, the Housing Services Act governs social housing, and designates regional and city governments as service managers and local housing providers as administrators. A service manager may establish, administer, and fund housing programs and services, and may provide housing directly. Local housing providers are typically share-held, nonprofit corporations, which help service managers fulfil their mandate. We consider local housing providers to play an important role in the housing-related public policy of Ontario.

A service manager provides periodic reports to the provincial government principally on the implementation of its housing plan and the administration and funding of its transferred housing programs, which includes the activities of local housing providers. There are clear corporate governance arrangements between an administrator and a service manager. A service manager has a strong oversight of and influence over an administrator's overall strategy and capital plan.

There is well-established, ongoing support provided by Ontario's Ministry of Municipal Affairs and Housing, which distributes the federal housing funding to service managers. A service manager's ongoing support to a housing administrator is embedded in the shareholder direction, which sets out the subsidy that the former provides to latter. It may also provide funding or guarantee for capital expenditure of the local housing corporation.

There is no precedent of adverse negative intervention from the province or service managers and we do not expect any future negative intervention. By law, local housing providers cannot pay dividends to their owners (service managers). Administrators allocate any net profits to capital reserves, which they use for asset maintenance.

Primary analyst: Nineta Zetea 

Country: France

Regulatory framework: French social housing providers

ASSESSMENT: 2

Rationale:   The public housing sector in France plays an important public policy role, which is well defined as providing integration, sustainability, and safety to citizens, while contributing to government targets for emissions reduction. Nonprofit social housing providers own almost 91% of the total social housing portfolio. Cities are also required to have at least 25% of social housing within their boundaries.

Housing providers in France are subject to strong oversight and financial control by a dedicated state agency (ANCOLS), which ensures that those entities comply with the regulatory framework and appropriately deploy the financial support granted by local governments. Additionally, ANCOLS evaluates the audited accounts and annual reports provided by social housing entities and oversees their governance and organizational model, to ensure that their main focus is to offer affordable housing to citizens without any discrimination.

Social housing entities are exempt from property tax (for 15 years) and benefit from low VAT rates. Most of their projects are eligible for very long-term (up to 40 years, or in exception circumstances 50 years) subsidized loans from Caisse des Dépôts et Consignations, one of the French State lending arms, and also from Action Logement Services. There has been some negative intervention in the housing sector by the French government, but the negative impacts were partly compensated. Under its finance bill for 2018, the central government unexpectedly decided to reduce rents for social housing operators from 2018. This measure has limited the flexibility of social housing entities to raise their rents due to national annual caps on rent increases. Measures such as extended refinancing flexibility and additional investment grants have been implemented in order to mitigate the negative effects of the rent cuts.

Primary analyst: Etienne Polle 

Country: Germany

Regulatory framework: German public housing providers

ASSESSMENT: 3

Rationale:  In Germany, the fiscal and organizational responsibility to ensure citizens' access to appropriate shelter lies primarily at local government level. Most, but not all, larger municipalities have established one or more government-owned public housing company to support them in carrying out this task.

Public housing providers are usually organized as limited liability or joint stock companies; rarely as public law institutions. Municipal owners appoint the majority of supervisory board members, select executives, and determine strategic objectives. So-called "co-operation agreements" are often used to agree targets such as maximum rental increases, caps on individuals' rents relative to available income, minimum quotas of welfare/refugee/homeless/disabled tenants, construction objectives, and so on, between a municipality and entities providing local social housing. The affordability and availability of housing features prominently on the political agenda of all larger German cities. Recently, this has resulted in a clear political mandate to expand operations for urban German public housing entities, which are also increasingly used as a tool to "anchor" local rent levels by municipal governments.

Direct transfers of public funds mainly target the construction of new social housing assets. Federal framework legislation has devolved passing the relevant regional laws to the 16 German states. Much of the subsidized funding is provided by the state promotional banks and national promotional lender KfW.

Negative intervention from government is a rare event. Although state authorities have been authorized by federal law to moderately cap rental increases in "tense" markets, this doesn't really target public housing providers, which--in general--voluntarily exercise restraint when hiking rental prices. Public housing companies could in theory be asked by owners to pay (higher) dividends in support of budgets; however, payout levels that could jeopardize the financial stability of providers could presumably be contested in court by creditors.

Primary analyst: Michael Stroschein 

Country: Israel

Regulatory framework: Israeli social housing providers

ASSESSMENT: 3

Rationale:  Social housing providers manage government-owned social housing units under renewable management agreements. They collect from tenants the rents defined by the government and pass them to the government, and in return receive fees for their managing and maintenance activities. As a result, the providers are not exposed to rent collection risks and can better achieve sustainable financial results. According to law, tenants are allowed to purchase their unit, which leads over the years to a reduction of housing units stock, especially where replacement units are not purchased or built at an equivalent rate.

The Israeli government policy on social housing is not well defined and changes frequently according to the political agenda. Demand for social housing is also fulfilled by subsidies to tenants renting units in the free market rather than purchasing additional housing units. This somewhat undermines the role of the social housing provider's public policy in the long term.

The Ministry of Construction signs management agreements with social housing providers and oversees their activities and services. The Ministry of Finance (through the authority of governmental companies) has a strong oversight of the sector, since the state owns most of the assets. We understand that all social housing providers have externally audited reports, which are timely and detailed within the different segments of activities.

Social housing providers receive ongoing and systemic support in the form of inflation-linked fees paid to them for the service they provide under the management agreements. They are not exposed to rent-collection risks, as the rent is only a pass-through item.

Social housing providers have limited flexibility mainly because they cannot modify the rents and are heavily dependent on governmental budgets. We view the overall reduction of units or the government's ability to change management company as a form of negative intervention, which reduces the stability and long-term viability of these companies.

Primary analyst: Yotam Cohen 

Country: The Netherlands

Regulatory framework: Dutch housing associations

ASSESSMENT: 2

Rationale:  Social housing in the Netherlands is provided primarily by housing associations (private and independent nonprofit organizations), which have a legal obligation to give priority to households with lower incomes. About one-third of all housing units (75% of the rental stock) in the Netherlands is classified as social or affordable housing. The Dutch housing associations' mandate is well defined and subject to various rent limits. In contrast, the rents set in the private housing sector are liberalized.

Although the housing associations are independent, with their own objectives and financial responsibilities, they operate within a legal framework set up by the state and supervised by the central government, which sets the rules for social housing allocation. The housing association authority (AW) and Waarborgfonds Sociale Woningbouw (WSW) operate within a vertical supervision framework, whereby WSW is concerned primarily with the business model of the housing associations, whereas the AW oversees their governance. The framework is structured to uphold uniform and transparent oversight of the housing associations to ensure satisfactory sector standards. WSW conducts risk assessments of all the participating housing associations and categorizes all members based on underlying risk metrics. Embedded in this comprehensive framework is also frequent and comprehensive reporting requirements to ensure that financial issues are identified and addressed at an early stage.

Almost all housing associations (98%) are members of the WSW guarantee fund, thereby receiving guarantees on their loans. These housing associations therefore have access to cost-efficient funding to finance their investments, which is the main form of system support received by Dutch housing associations.

In 2013, as a response to the financial crisis, the central government introduced a landlord levy that housing associations (and private companies) have to pay if they let more than 50 housing units classified as social housing. The levy is a property tax based on the market value of the social housing assets on top of the normal property tax, and we consider this a form of negative intervention by the Dutch government.

Primary analyst: Linus Bladlund 

Country: New Zealand

Regulatory framework: New Zealand Crown agency

ASSESSMENT: 1

Rationale:   There is only one Crown agency operating in the social housing sector in New Zealand--Kainga Ora-Homes and Communities (Kainga Ora). It is a near-monopoly provider: it owns or manages about 75% of social housing in the country and houses 4% of New Zealand's entire population.

Kainga Ora operates under an extremely strong public policy mandate and is subject to a clear disclosure and regulatory regime. It was established by Crown legislation and is a designated "public benefit entity." All members of its board are appointed by and are accountable to the minister of housing and minister of finance. Commercial borrowing is governed by a "borrowing protocol" limit set by the ministers. As a regular bond issuer, Kainga Ora publishes investor updates and an annual sustainability financing impact report.

The New Zealand government provides, either directly or indirectly, some 90% of Kainga Ora's income. This indicates extremely strong ongoing support from the government. In 2020, the government established a New Zealand dollar (NZ$) 1 billion liquidity standby facility for Kainga Ora.

Despite the historical transfer of some housing assets to community housing providers (which took place over 2010-2017 under Kainga Ora's predecessor, Housing New Zealand Corporation), we do not see risks of future negative intervention from the government. The stock transfer program was cancelled in 2017.

Primary analyst: Martin Foo 

Country: Sweden

Regulatory framework: Swedish public housing companies and cooperative housing societies

ASSESSMENT: 2

Rationale:  All rental housing in Sweden is considered to have a public policy role, not just rental housing aimed for low income households. Therefore, most rental regulations apply to all landlords (public and private), and tenants have the same rights in terms of rental negotiations, occupancy rights, and so on, regardless of whether the landlord is public or private. Changes in the rental regulatory framework are rare, and when they occur they are generally well prepared and major stakeholders (for example, tenant associations and landlord associations) have been involved in hearings and drafting responses.

There is no dedicated housing regulator, and disclosure and reporting within the sector is similar to that of private companies in Sweden.

There is limited ongoing fiscal support directly from the state to the sector, but central government has been supportive historically in addressing issues such as structural mismatch issues, for example large vacancy rates in areas affected by depopulation, or interest rate subsidies to stimulate new production in times of housing shortage; high financing costs; or insufficient incentives for developers to build new rental housing.

There have not been any past events of major negative intervention in the sector, and we see limited risks of negative intervention to occur in the future given current rent setting scheme.

Primary analyst: Carl Nyrerod 

Country: United Kingdom

Regulatory framework: Registered housing providers in England

ASSESSMENT: 3

Rationale:  We assess the regulatory framework under which providers of social housing in England operate as strong, underpinned by the providers' public policy mandate to provide affordable homes and support their tenants by charging rents below the prevailing market rent.

The terms social housing and registered provider in England are defined in the Housing and Regeneration Act 2008 (as amended), which sets out the objectives of the Regulator for Social Housing (RSH). RSH is a nondepartmental public body that regulates private registered providers of social housing to promote a viable, efficient, and well-governed social housing sector. The RSH is accountable to parliament, with the chair of the board being accountable to the Secretary of State for Housing, Communities, and Local Government.

We consider that the sector benefits from solid ongoing oversight by the RSH. A registered provider has to submit quarterly survey returns providing a forecast of their liquidity position 12-18 months out. The RSH also carries out annual stability checks of registered providers' business plan and annual accounts and undertakes periodic in-depth assessments to assess providers' financial strength, risk profile, approach to value for money, and quality of governance, with RSH publishing regulatory judgements on all the registered providers that own or maintain more than 1,000 homes. In addition, the RSH sets consumer standards in order to protect existing and potential tenants, and the rent settlement is governed under strict rules, limiting the allowance under which the providers can increase the rent for the majority of their tenants. Finally, we estimate that government support is extended to a large proportion of the providers' tenants, through housing benefit payments.

These strengths are offset in our view by the ability providers in England have to develop homes for outright sale, which exposes them to potential volatility in the housing market. Furthermore, while the government provides grant funding via Homes England--an executive nondepartmental public body, sponsored by the Ministry of Housing, Communities, and Local Government or the Greater London Authority--we consider that providers in England receive a relatively low level of grant funding for the development of homes compared with many other regions, typically at less than 15% of the development cost. This means that they fund more of their activities with external debt that needs to be serviced on an ongoing basis.

We consider that prior negative intervention from the U.K. government weighs on the regulatory framework for England. As part of welfare reforms launched by the then government in 2015, English providers were required to reduce their affordable rents over a four-year period from April 1, 2016, weighing on the providers' cash flow generation. While the rent settlement has since been revised, allowing the registered providers to increase their affordable rents for five years from April 1, 2020, we consider it a weakness in the regulatory framework that the government can intervene on the rent standards.

More recently, the U.K. government has pushed for carbon neutrality in the sector by 2050, with only a small amount of government funding available to address this target. We consider that information about potential government funding is limited at present, but we consider that a lack of appropriate support could be seen as detrimental for the sector.

Primary analyst: Karin Erlander 

Country: United Kingdom

Regulatory framework: Northern Irish registered housing associations

ASSESSMENT: 2

Rationale:  We consider that the Northern Irish Assembly places high priority on its social housing policies and agendas, which manifests as very strong political support for registered housing associations increasing the number and quality of social housing stock in the country. Social housing represents nearly a fifth of all housing stock, and as such is a vital public service for Northern Ireland. There is a new strategy under development for social housing supply, due for publication in 2022, which is expected to set out targets for new development and improvements in quality and performance. In line with the U.K.-wide push for decarbonization, we see that Northern Ireland has a strong focus on sustainability and carbon reduction, which we view as highly influential on the social housing market.

We view oversight in Northern Ireland as strong, with the regulatory function forming a part of the government itself, residing within the Department for Communities. The regulatory model draws influence from and parallels with the other devolved nations and England, with minor variations in approach. There are fewer providers in the Northern Irish market, which allows for greater ongoing engagement with the regulator, but this could also suggest less regulatory capacity when compared with larger markets.

Supportiveness for the sector is stronger than in England. Significantly higher levels of grant funding for development (about 40%-50% of costs), as well as the provision of welfare benefits to support rental income for providers, are the primary financial support mechanisms for the sector.

We do not see there being a significant level of negative intervention from the regulator to the sector. However, the rollout of the decarbonization agenda in the U.K. could place additional financial and operational burdens on the Northern Irish social housing sector over the next few decades should additional grant funding not be made available.

Primary analyst: Luke Linnell 

Country: United Kingdom

Regulatory framework: Scottish registered social landlords

ASSESSMENT: 2

Rationale:  We consider the Scottish government to place a high priority on its social housing policies and agendas, which manifests as strong political support to registered social landlords for increasing the number and quality of social housing stock in the country. Social housing represents in excess of 20% of total housing stock in Scotland, and is a vital public service. Recent pronouncements by the Scottish government set out a target of developing at least 70,000 social homes by 2032 and pushing through new legislation for improving housing standards.

Furthermore, we see that Scotland has a strong focus on sustainability and carbon reduction, with energy performance targets that are more stringent than we see in the other devolved nations and England. Furthermore, Scottish policy states that all new social homes will need to be zero emission by 2026.

We view oversight as being very strong in Scotland, with a separate body, the Scottish housing regulator, tasked with regulation of the sector. The regulatory model draws influence and parallels with the other devolved nations and England; however, there are differences in assessments and scoring conventions. The regulator has high levels of engagement with providers, and the scrutiny and oversight of performance, governance, and financial viability is comprehensive and challenging. Regulatory powers are extensive, including facilitating asset transfers and mergers for failing providers.

Supportiveness for the sector is stronger than in England through higher levels of grant funding for development (about 40%-50% of costs) and the provision of welfare benefits to support rental income for providers, are these are the primary financial support mechanisms for the sector. In Scotland, additional benefits paid to tenants under devolved powers also have an indirect benefit to providers through improving the affordability of social housing and reducing arrears risk.

We do not see there being a significant level of negative intervention from the regulator to the sector. However, the rollout of the decarbonization agenda in the U.K. could place additional financial and operational burdens on the Scottish social housing sector over the next few decades should additional grant funding not be made available.

Primary analyst: Luke Linnell 

Country: United Kingdom

Regulatory framework: Welsh housing associations

ASSESSMENT: 2

Rationale:  We consider the Welsh government to place a high priority on its social housing policies and agendas, which manifests as strong political support to housing associations for increasing the number and quality of social housing stock in the country. The Welsh sector represents nearly a fifth of the total housing market, and as such is a vital public service. Over the next 15 years, the sector has committed to building 75,000 properties, as well focusing on modernizing construction methods to increase the development rate. In line with the U.K.-wide push for decarbonization, Wales has a strong focus on sustainability and carbon reduction, which we view as highly influential in the social housing market.

We view oversight in Wales as strong, with the regulatory function forming a part of the government itself, residing within the housing regulation team. The regulatory model draws influence from and parallels with the other devolved nations and England, with minor variations in approach, but maintains a fundamental focus on governance and the financial viability of providers. The size of the market in Wales is considerably smaller than in England and Scotland, which allows for greater engagement between the regulator and providers but could also suggest less regulatory capacity when compared with larger markets.

Supportiveness for the sector is stronger in Wales than in England. Significantly higher levels of grant funding for development (about 40%-50% of costs), specific additional grants for energy-efficient homes, and the provision of welfare benefits to support rental income for providers, are the primary financial support mechanisms for the sector.

We do not see a significant level of negative intervention from the regulator to the sector. However, in Wales, the existence of a cap on increases in rent slightly weakens our view when compared with the other devolved nations. That said, we still see this as less restrictive than in England. However, the rollout of the decarbonization agenda in the U.K. could place additional financial and operational burdens on the Welsh social housing sector over the next few decades should additional grant funding not be made available.

Primary analyst: Luke Linnell 

Country: United States

Regulatory framework: U.S. nonprofit social housing providers

ASSESSMENT: 3

Rationale:  For-profit and private nonprofit social housing providers are common in the U.S., notably with respect to units developed through the low-income housing tax credit (LIHTC) program. Nonprofit social housing providers benefit from public policy mandates, and the LIHTC program accounts for a significant proportion of activities. Such policies and market forces are, however, subject to regular changes that may introduce some degree of uncertainty in the framework. Nonprofit social housing providers are not subject to specific standards of governance, reporting, and disclosure generally; there is some oversight of the sector by governmental agencies. Some standards of reporting, oversight, and disclosure exist for units developed through LIHTC to ensure their long-term financial and physical health and regulatory compliance with program requirements. Generally, the standard of timeliness and oversight for the sector does not provide advance warning to allow for effective responsiveness or proper remediation plan for social hosing providers.

There is limited direct and ongoing operating support to nonprofit social housing providers, such as private and public grants for general funding and to service residential programs for tenants, and indirect tax incentives to build affordable housings. However, financial and operational performances are primarily the responsibility of the housing providers and vary across the sector.

There is no precedent of adverse negative intervention from governments or their agencies and we do not expect any future negative intervention. Social housing developments are typically subject to tenant income and rent limits.

Primary analyst: Ki Beom Park 

Country: United States

Regulatory framework: U.S. public housing authorities

ASSESSMENT: 2

Rationale:  In the U.S., public housing is owned by and provided by local housing authorities, through specific programs targeting low-income tenants, elderly people, and disabled people. Public housing authorities (PHAs) therefore benefit from a strong public policy mandate and operate under a stable and well-established framework that makes them key providers in the sector. There is strong oversight of the sector with high standards of governance, reporting, and disclosure so that sector or individual risks are easily identified. However, when risks are identified they are not always remedied at an early stage.

There is direct and ongoing operational support to PHAs. They regularly receive federal grants in the form of capital and operating contributions to maintain and operate public housing and administer various programs to provide affordable housing to low-income tenants.

There is no precedent of adverse negative intervention from governments or their agencies and we do not expect any future negative intervention. Public housing is subject to tenant income and rent limits.

Primary analyst: Ki Beom Park 

Scores Snapshot

Regulatory Framework Assessments*
Group 1 Group 2 Group 3
Extremely strong Very strong Strong
New Zealand Crown Agency (New Zealand) Queensland community housing providers (Australia) German public housing providers (Germany)
Province of Ontario housing providers (Canada) Israeli social housing providers (Israel)
French social housing providers (France) Registered housing providers in England (U.K.)
Dutch housing associations (the Netherlands) U.S. social housing providers (U.S.)
Swedish public housing companies and housing cooperatives (Sweden)
Northern Irish registered housing associations (U.K.)
Scottish registered social landlords (U.K.)
Welsh housing associations (U.K.)
U.S. public housing authorities (U.S.)
*We currently do not have regulatory framework assessments in groups 4, 5, or 6.

Related Criteria

This report does not constitute a rating action.

Primary Credit Analyst:Eileen X Zhang, CFA, London + 44 20 7176 7105;
eileen.zhang@spglobal.com
Secondary Contacts:Karin Erlander, London + 44 20 7176 3584;
karin.erlander@spglobal.com
Felix Ejgel, London + 44 20 7176 6780;
felix.ejgel@spglobal.com

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