From disinvestment to reinvestment: Tax arrears and turning points in the east village

The gentrification process is often conceived as establishing a ‘new urban frontier’. Despite the dismissive cultural connotations of this imagery there may be an underlying economic rationale to the frontier theme. After a discussion of the dynamics of disinvestment in the housing market and the relationship between disinvestment and reinvestment, we analyse tax arrears data in order to investigate the turning point when disinvestment is superseded by reinvestment in New York City's East Village. We establish a technique for identifying the historical and geographical origins of reinvestment associated with gentrification and for tracing the geographical diffusion of this process in the urban landscape. In the East Village, the closing of the gentrification frontier line occurred much earlier than is generally thought.     

Housing careers,asset accumulation and subsidies to owner occupiers — A microsimulation

Owner occupiers in the UK housing market receive considerable central government subsidies, namely through provision of tax relief upon mortgage interest, through exemption of private house sales from capital gains tax and through tax advantages relative to those who pay rent out of their net incomes. This paper sets out a framework for assessing the incidence of these subsidies upon different groups of owner occupiers over time, and suggests how regional fluctuations in house price inflation, size of house purchase loan and residential mobility behaviour affect the incidence of exchequer subsidy.     

Financial Soundness Indicators for Owner Occupiers

Real house prices in Denmark turned downwards in 2007 after a sustained period of growth. The associated increases in borrowing left Danish owner occupiers as the most highly indebted in the OECD countries. With the downturn, signs of financial fragility in the housing market and in financial institutions are emerging. An analysis of the financial soundness of owner occupation and the impact on financial stability is topical. This paper employs a unique set of individual tax statistics data at the family level to estimate and follow certain ratios over the recent housing market cycle. The ratios for the 30–39-year-old owner occupiers, who may have bought recently and therefore are the most indebted, are examined. Both their housing wealth/income ratios and their net liability/income ratios had increased to ‘all-time high’ levels in 2005, while their influence remained at the same high level over the whole cycle. The ratios presented can be utilised as a set of financial soundness indicators both for categories of households and for the housing market to predict financial unsoundness, and to provide an early warning in the context of changes in the economic environment.     

Gentrification or social renewal? Effects of public supported housing renewal in Denmark

This paper analyses social change, particularly the processes of social decay, in obsolete and deteriorated housing in the older housing stock in Denmark between 1986 and 1996. These changes are compared with the development which has occurred in similar kinds of housing that have been physically upgraded through a government program for housing renewal.

The study shows that this kind of housing attracts a quick turnover of residents and a tendency towards more unemployed or lower income occupants. It is also used by young people as their first home when moving away from their parents.

It is also shown that public supported housing renewal stops this type of housing pattern and increases the share of households that have high incomes. The changes, however, are not considerable and there are also many unemployed people among the newcomers. These changes depend to a large degree on the size and tenure of the renewed dwellings. In private renting, particularly co‐operatives and in larger dwellings the socio‐economic composition of residents undergo greater changes than in smaller dwellings in non‐profit or public housing. Extensive renewal often results in high rent compared with rent from the regulated housing market in Denmark. As a result the renewed dwellings have difficulties in competing with other kind of dwellings. For that reason residents of this type of housing primarily consist of welfare or pension recipients or others who receive high housing benefits. A minority of people with higher income also use these dwellings but mostly as temporary housing as after a few years they often move to owner‐occupied housing.     

Home ownership,foreclosure and compulsory auction in the Federal Republic of Germany

This paper outlines the financial difficulties which home owners in the Federal Republic of Germany (FRG) have been experiencing over the 1980s. The discussion is preceded by a brief outline of the housing market for owner‐occupied dwellings. The paper then outlines the scale of the problem of home owners in financial difficulties and refers to house prices, housing finance and state subsidies. The extent to which the growth of home ownership has brought owner‐occupation within the reach of middle and lower income households, and the particular conditions of the housing market which affect those home owners who run into financial difficulties are considered. Reference is also made to research which has been carried out into the particular plight of households threatened with compulsory auction proceedings. In the conclusion possibilities for reform of housing finance arrangements and compulsory auction proceedings are outlined.     

More and better credit: Housing policy reform in Bolivia

Access to financing for housing in Third‐World countries is in very limited supply and formal‐sector housing finance is only available to a small proportion of the (higher‐income) urban population. Typically, the great majority of households in developing countries rely entirely on their own savings. Since investment by owner‐occupiers is usually three to four times their annual incomes, the inability to borrow against future earnings using the house as collateral prevents them from satisfying their housing needs and inhibits investment in housing. Consequently, a variety of lending policies and practices have been suggested and attempted in many countries to make housing finance more accessible to borrowers. This paper describes recent attempts by the Bolivian government to improve the supply of funds available for low‐income housing credit through the examination of the Fondo Nacionale de Viviendas Sociales (FONVIS), an entity designed to improve access to mortgage credit among low‐income households and funded through a mandatory payroll tax. The impact of FONVIS on problems of affordability and housing supply is estimated using data from the organization's data banks as well as those culled from recent household surveys. In addition, the paper includes a discussion of the most salient problems with FONVIS’ current procedures and regulations, such as its unnecessary control over housing design standards and the exclusion of informal‐sector workers. The paper concludes with recommendations regarding how to make FONVIS more responsive to the housing conditions of the poor, assuming that the current administration wants to continue using a mandatory payroll tax to support the credit market.     

HOUSING REHABILITATION AS AN URBAN POLICy ALTERNATIVE

Economic and social changes in central cities have made physical decay widespread, and housing rehabilitation has become an increasingly important strategy for reversing this decay. The principal factor which affects the design and impact of housing rehabilitation programs is the income group at which they are targeted. Programs directed at the housing poor face a series of problems related to the lack of resources of these groups, while the principal problem of programs aimed at middle-income groups is reversing the pattern of neighborhood disinvestment. All types of rehabilitation programs share problems of low productivity due to the complexity of the rehabilitation process and to the overall lack of resources committed to them. As a part of a larger community development process, housing rehabilitation programs must embrace and reconcile the sometimes conflicting goals of maximum physical revitalization and the provision of improved housing services for the poor. This does not require radical new programs but rather a sophisticated mix of existing approaches coupled with the funding commitments necessary to execute them. The current trend towards fiscal retrenchment will seriously interfere with further efforts to utilize housing rehabilitation as an effective tool for revitalization.     

Suburban Housing Resale Prices and Housing Market Restructuring

This study shows that in the suburban rings surrounding Cleveland, Ohio average resale prices are sustained through capitalization of quality–price preferences for housing and school quality. Average housing resale prices are highest where local fiscal capacity is built upon a strong residential–nonresidential property tax base and where the total valuation resulting is capitalized into housing stock prices. High total valuation per pupil enables school districts to maintain satisfactory per pupil expenditures that contribute to the sustainability of resale prices. Nonetheless, regional restructuring, population growth, access to superior housing, open space and other amenities in the peripheral, inner– and outer–edge suburban rings are redirecting investment away from the contiguous ring suburbs where the levying of high effective millages is causing total valuations per pupil to fall. Diminishing school district quality and shrinking tax bases in the contiguous suburbs are harbingers of suburban distress and housing disinvestment.     

House prices and income tax in the Netherlands: an international perspective

A sharp drop in prices on the home owner market is not only hard to predict but also the reason why many politicians would prefer to implement any tax changes gradually, if at all. Against this backdrop, the present study explores the relationship between a change in the personal income tax treatment of home ownership and a change in house prices. First, based on a literature study, it identifies the factors in the development of house prices. Then, using data from several European countries, it compares the effects of personal income tax reform on the development of house prices. As the comparison reveals, the method and timing of adjustments in the tax system have a strong influence on house price development. Furthermore, econometric modelling of the Dutch home owner market suggests that when the restrictions on tax concessions are less stringent, the real decline in house prices is not as steep and does not last as long.     

Private Rental Housing in Hong Kong

This paper examines selected aspects of housing policy and its influence on private rental housing in Hong Kong. Its ambitions are modest, in part because so little research has been conducted on the sector, as a consequence of the small size of the sector as well as the concentration of socio-political, economic and policy analyses on the other major housing sectors, namely public renting and home ownership. It is argued that a fundamental function of private renting, to provide a functional substitute and counter-balance to distortions in the market for private home ownership, has been systematically undermined in Hong Kong. In spite of its historical importance in meeting Hong Kong people's housing needs, the sector's decline has been steep and it can now be fairly described as a marginalised tenure, despite incomplete structural adjustment post- Asian Financial Crisis. It is suggested that a fundamental reason for the decline of the private rental sector has been the impact of government policy, which undermined the private rental sector and thus an important element of the market mechanism in housing provision. The government's ideology of home ownership has also functioned to transfer lower middle-income families into the owner occupied sector. Although the Hong Kong government has not been as overtly hostile to this sector as governments have been elsewhere, it nevertheless also seems to envisage no real role for the private rental sector in a housing delivery system molded by policy preference for home ownership, rather than fostering viable economic competition by also facilitating an efficient private rental sector.     

Who leaves rental housing? Examining possible explanations for ethnic housing segmentation in Uppsala,Sweden

Swedish cities are not only segregated but also segmented along ethnic lines; i.e., different ethnic groups are unevenly distributed across the different tenure segments in the housing market. Immigrants are generally overrepresented in rental housing and underrepresented in home ownership and tenant–owner cooperative housing. In this paper, an attempt is made to evaluate the importance of socioeconomic resources in explaining this segmentation, using the Uppsala housing market as a case. By means of binary logistic regression an evaluation is made of the relative importance of socioeconomic resources and ethnic background, while controlling for demographic factors, in explaining whether a person leaves rental housing for home ownership or cooperative housing or remains in the rental segment. The results show that the socioeconomic situation of the individual is indeed very important. A high income and a stable position in the labor market seem to be crucial in order to advance in the housing market. Demographic and socioeconomic factors cannot, however, fully account for the differences found between Swedes and immigrant groups such as Africans and Eastern Europeans. The results imply that ethnic discrimination cannot be ruled out as an explanation for the underrepresentation of immigrants in the cooperative and owner-occupied segments.     

Deconcentrating Poverty Through Homebuyer Finance Programs

Abstract: The federal government attempts to reduce the spatial concentration of the poor through the implementation of its many housing initiatives, guiding recipients toward economically integrated neighborhoods. Merging HMDA, GSE, and Census 2000 data, this analysis assesses the extent to which the government's homebuyer finance programs have accomplished the deconcentration of the poor. The research finds that the expected benefits of various forms of housing assistance have not fully materialized. The efforts to help very low‐income homebuyers are helping these households move into economically integrated neighborhoods but the movement toward this economic integration, especially by racial and ethnic minorities, has fallen short of distributing these households in a manner that parallels the availability of affordable housing in the market.     

Affordable housing in border cities: The work of Esperanza de Mexico in Tijuana

This paper explores the socio-economic conditions that produce the lack of affordable housing in cities along the U.S.-Mexico border and describes various efforts to tackle this issue. Specifically, the paper evaluates publicly funded initiatives such as Casas Urbi and Homex, privately funded projects, as well as community based initiatives such as the work of the non-profit organization Fundación Esperanza de Mexico in the city of Tijuana. The paper interrogates the use of self-build construction systems, volunteer support, community empowerment, ecological programs, and affordable financing as a framework for future affordable housing developments in the area.     

Causes of disinvestment in New York City's housing

A model of the housing market in cross-sectional disequilibrium is developed and tested with data on New York City census tracts. The sampled tracts experienced substantial declines in the multifamily housing stock. The empirical tests attempt to measure the relative importance of social and economic factors which contribute to disinvestment and abandonment. The findings indicate that social factors such as large concentrations of children from broken homes and low rates of family formation are at least as important as economic factors measured by family income and unemployment.The author is grateful to Professor Frank Mittelbach for comments on an earlier draft.     

Public Policy and Renewal of Old Housing: The Case of Nord-Pas-de-Calais

The rules and laws enforced in France in 1977 regarding the policy of old housing renewal have extended public intervention to the whole housing stock built before 1948. It came as a complement to the 1962 Malraux Law which exclusively concerned old city centres whose architectural value was preserved. Has the objective put forward to improve old housing by maintaining their residents (tenants and owner occupiers) been reached? The public policy of old housing renewal and its consequences on social occupancy are analysed in their relation to the ownership structure and to the property strategies of the actors who finance this rehabilitation. The paper examines Nord-Pas-de-Calais, one of the regions in France where the old housing stock is the lowest in quality. As for the social changes in the occupancy of these neighbourhoods, our 1995 study confirmed the results obtained in 1988. Four years after the end of the improvement programmes, these neighbourhoodshave retained a residential function for working-class occupants. However, two new trends emerged. On the one hand, despite a better integration of old housing in the policies implemented by local authorities since the 1982-83 decentralisation law, the incentive role of state aids to renewal is increasingly limited. On the other hand, property disinvestment has only been partially reduced. Some housing units remain unimproved and some buildings remain unoccupied. The housing supply is higher than the demand. Ownership of old housing is undermined by demand for housing estates in suburban areas.     

Housing,Home and Neighbourhood Renewal in the Era of Superdiversity: Some Lessons from the West Midlands

Following two decades of new migration, the EU is now home to the most diverse population ever. Much new migration has occurred into superdiverse escalator areas already experiencing high levels of deprivation. In the UK, housing market renewal areas (HMRA) had a particular challenge to address housing market failure and the high population turnover often associated with new migration while meeting the needs of established residents. Lack of knowledge about the diverse housing needs of residents risked hampering renewal efforts. This paper uses qualitative data collected from a superdiverse sample of settled and new residents located in the Urban Living HMRA in the West Midlands to examine the ways in which they conceptualise home. The paper argues that understanding the ways in which diverse residents conceptualise home and home making, offers potential for policymakers to understand how residents' needs can be met.     

Alternative strategies for urban redevelopment: A case study in a squatter housing neighborhood of Ankara

Since the 1980s, the redevelopment of squatter housing settlements has been a primary policy focus of the local and central authorities in Turkey. Their strategies have adopted two different models: one approach was not effective at generating redevelopment activity and produced low quality living environments, and the other approach resulted in dislocation and gentrification. The literature stresses three issues. First, redevelopment sites are areas where market forces failed; thus, they are perceived as high risk, low-demand, and low-return investments with high transaction costs. Second, institutions that lower transaction costs boost market forces and increase economic performance in property development. Third, local authorities remain active in urban redevelopment; despite having no direct tools for local economic development, they do have tools for urban development. This study reformulates the basic transaction cost thesis and hypothesizes that local authorities can boost urban redevelopment by making changes to institutions or ‘the rules of the game’ by increasing information flow, positive externalities and perceived returns and by decreasing transaction costs, negative externalities and risks, all of which motivate land owners and house-builders. To test this hypothesis, I have conducted household surveys and semi-structured interviews with house-builders in a squatter housing neighborhood undergoing a gradual transformation. The goal of this study was to search for the impacts of the local authority’s strategies on homeowner inertia, private sector disinvestment and the implications of urban redevelopment. My findings revealed that the local authorities can produce desirable results for less attractive neighborhoods with the help of marketing, institutional strategies and effective land use planning without leading to dislocation and gentrification. Overall, this study suggests that ‘institutional’ strategies are crucial for urban policies and future urban redevelopment activities.     

我国中低收入家庭住房政策改革诌见

通过文献分析法、比较研究法,总结和分析了具有代表性的欧美国家的中低收入家庭住房保障体系,其主要形式为:供给补贴、需求补贴、控租金、建立租赁市场、建立金融支撑体系。我国当前应通过租赁市场、税收杠杆、贷款保险及中介服务体系的建立和公积金改革来加快中低收入人群住房保障体制的建设和发展。     

The continued retreat of non-profit housing providers in the Netherlands

After the abolishment of object subsidies for housing construction and renovation in the mid 1990s, Dutch housing associations, the main non-profit housing providers in the country, heavily relied on market activities, such as selling homes to owner occupiers, to generate income for their social activities and to contribute to urban development policies. This worked well, which was one of the main reasons that these housing providers could adopt a wide field of operations, including not only the management and development of affordable housing for low-income groups, but also housing in other market segments, plus activities regarding care, welfare, local economy, employment and education. Recent economic and political developments, however, have caused housing associations to return on this path. Central in this paper is a research among Dutch housing associations about their values, strategic positioning and strategies. The research was executed in two waves (conducted in 2010/2011 and in 2013/2014, respectively), each consisting of a panel survey and interviews with selected panellists. This paper presents the results of the second wave. It is expected that after the first wave of the research, new regulations, such as the national implementation of European rules on state support and the introduction of a new property tax, have resulted in a further retreat from non-social housing activities. The analysis shows that this is indeed the case, but that the main shifts in priorities have not taken place directly after the credit crunch, but in later years.     

Band-aid or Panacea? The Role of Private Rental Support Programs in Addressing Access Problems in the Australian Housing Market

Australia has a significant private rental market with over a quarter of households renting their home from a private landlord. Many of these households are on low incomes and receive assistance from private rental support programs provided by each Australian state and territory. In spite of these large numbers, little is known about the effectiveness of policy initiatives to assist low-income private renters. Limited knowledge of the private rental support programs stands in stark contrast to the detailed research on programs established to address homelessness and problems within the public housing sector. This paper addresses this lacuna by reporting on the suite of initiatives currently funded by state governments to assist low-income households (for example, bond loans and rental deposits, advice and help with removal expenses). Based on a comprehensive study of Private Rental Support Programs (PRSPs) commissioned by the Australian Housing and Urban Research Institute, it is argued that though policies to assist vulnerable tenants are acknowledged as a success by practitioners and clients, their effectiveness as a policy instrument is undermined by wider structural changes in the housing market. The paper concludes that the stress faced by many vulnerable households is likely to intensify over the coming years thereby compounding the pressure on state Housing Authorities to provide more comprehensive packages of support that extend beyond just a ‘one-off’ form of assistance.