A tale of two cities – rental housing in Budapest and Sofia in the 1990s

The paper describes the findings of a study conductedduring 1997–1998 on changes to the structure of rentalhousing provision in two post-communist cities,Budapest and Sofia. After nearly a decade of `transition' to market economies, the public rentalsectors have shrunk dramatically and becomeresidualised. Despite the rapid privatisation andassociated growth of owner-occupation there is littlesign that the privately rented sector (PRS) isregaining any of its pre-communist stature as theprincipal form of housing provision. There is almostno company landlordism and 80 percent of thelandlords in both cities let out only one property.They are mainly `incidental' landlords who haveinherited or previously owned the property. Few havebought it as an investment. There are few signs ofinstitutional support for the PRS in either city.Despite this common context, the reasons for thedevelopment of the PRS in the two cities aresignificantly different. In both cities the PRSaccounts for about 4 percent of households. But inSofia nearly half the landlords let out their ownhouse for income, depressing their housing consumptionagainst a back-cloth of poverty and desperate need forincome. `Landlords' move in with relatives or to`second homes'. Thus a large number of landlords arealso tenants in another property. In Budapest, unlikeSofia, new entrants to this market have fallen sharplyin the last 18 months. High taxation, falling realhouse prices and over-supply of property, followingthe rapid privatisation of the state rental housingstock, are the underlying problems inhibiting thegrowth of this sector. There is no sign of a return tothe tenure that was the foundation of their urbandevelopment, although explanations for this differbetween the two societies. The `transition to themarket', at least in housing, continues to be parlousand immature.     

Family formation,parental background and young adults’ first entry into homeownership in Britain and Germany

Abstract

Although previous research shows that family dynamics and parental socioeconomic status influence the timing of young adults’ first entry into homeownership, much less is known about how the role of family factors may vary across countries with different housing systems. In this article, we use panel survey data from Britain and Germany to compare how family life course careers and parental socioeconomic background influence young adults’ initial entry into homeownership in these two divergent national contexts. The results show that in Britain, first-time homeownership transitions are tightly synchronized with partnership formation. By contrast, in Germany first moves into homeownership typically occur later around or after the arrival of children. Parental owner-occupation accelerates entry into homeownership in both contexts, while the effects of other parental characteristics are relatively muted. Furthermore, the results highlight how individual socioeconomic factors are critical determinants of entering owner-occupation. This is particularly true in Britain where there is a strong socioeconomic gradient in first-time homeownership transitions.     

Motives for Investments in Housing Rehabilitation among Private Landlords under Rent Control

In economic studies of the private rental sector of the housing market, and in political debates on housing policy, it is often assumed that private landlords are basically guided by rational economic motives. In this paper, which is based on a Danish study of housing rehabilitation activity among private landlords under rent control, it is shown that different groups of landlords exist who have many other motives for buying and maintaining rental property than those assumed in economic theory. It is concluded that private landlords do not behave as economic, rational and efficient actors as is often assumed, and that an understanding of these structures of landlordism is essential to an assessment of the role of private landlords in housing supply, and to an elaboration of public programmes for supporting housing rehabilitation in the private rental sector.     

The decline of a homeowning society? Asset-based welfare,retirement and intergenerational equity in Australia

Researchers have increasingly recognised a link between homeownership levels and retirement policy, particularly in English-speaking welfare states. Housing is central to asset-based welfare policies, which may enable households to efficiently manage life course risks, but may exacerbate wealth inequality and expose them to market volatility. Australia presents an important case for understanding the dynamics of asset-based welfare, with its retirement approach combining high homeownership rates and a limited public pension. This paper investigates emerging generational differences in homeownership in Australia. Recent research has identified declining homeownership amongst younger cohorts. Using cross-sectional data, we explore alternative theoretical explanations for this trend. We find no evidence that declining homeownership reflects changing investment choices or delayed family formation. Instead, recent trends are consistent with intensifying inequalities based on class and care responsibilities. This casts doubt on the viability of Australia as a homeownership society and asset-based retirement policies in a financialised economy.     

Homeowner investor subjects as providers of family care and assistance

Abstract

This article asks: What becomes of the idealized asset-accumulating investor subject rallied in asset-based welfare policy and discourse in the context of mounting social risks facing families? It brings into dialogue two disconnected literatures: one on financialized subjectivities, drawing on post-structuralist and Foucauldian analysis, the other on welfare states drawing more heavily on comparative political economy. Drawing on homeowner interviews in Melbourne (Australia), it identifies how parent homeowners’ devise housing strategies to manage their children’s housing welfare risks. Their housing investment and landlordism strategies align with financialized subjectivities, but other strategies subvert or reject these subject positions. Its first contribution is to specify how an Australian refamilization of welfare responsibilities, including for housing, is unfolding as processes of financialization erode the efficacy of growing state social spending. Its second contribution is to challenge the individual subject of asset-based welfare (ABW) and introduce intergenerational assistance as an under-explored contingency for ABW projects, and further driver for welfare inequalities between and within generations.     

Action–reaction. Survival strategies of tenants and landlords in the private rental sector in Belgium

The private rental sector (PRS) is growing in many Western countries after a period of decline. In Belgium, a renewed policy interest in the PRS emerges and the sector is believed to play an important role in addressing housing needs of low-income households. Steering these households to the PRS is however not without problems. The supply side of the market is not necessarily willing to accommodate vulnerable renters. Landlords and real estate brokers install mechanisms to exclude financially vulnerable households throughout the entire rental procedure. These in turn develop (counter)strategies to get round the obstacles and to increase their chances. In this article, we apply an interactional perspective to study the interplay of strategies developed by both sides of the market. The article is based on 58 in-depth interviews with landlords and brokers, testimonies of low-income tenants from 15 focus groups plus 5 in-depth interviews about the influence of different discrimination grounds on their private rental experiences.     

A relay race: intergenerational transmission of housing inequality in urban China

Abstract

Housing affordability has become a critical challenge worldwide, consequently constraining young generation from entering the housing market. Despite growing attention to housing inequality in China, little research has been undertaken to reveal the extent to which a family of origin contributes to housing inequality among young adults. Family resources could support the young generation to achieve homeownership not only directly through intergenerational transfers of wealth, but also indirectly through intergenerational transmission of socioeconomic characteristics. Using the 2013 Fudan Yangtze River Delta Social Transformation Survey, this study constructs a structural equation model to examine the direct and indirect influence of parents’ resources on the young generation’s housing outcomes. The results show that the direct influence of parents’ homeownership is prominent, whereas the impact of transmitted socioeconomic status is limited. Housing advantages of parents, derived from their superior institutional status during China’s housing reforms, are being transmitted to their offspring, particularly to sons.     

What has debt got to do with it? The Valuation of Homeownership in the Era of Financialization

Based on comparative focus group data from Norway, Denmark and England, this article asks why people take on substantial mortgages to become homeowners. It argues that financialization of the housing market has resulted in a widespread investment philosophy at the household level and changed the way people think and talk about “the home”. High levels of mortgage borrowing have become commonplace and are justified by social valuations of owner-occupation based on beliefs around freedom through homeownership. Like previous research, the study shows that homeownership offers social identity, stability and belonging. But, this is wrapped up in an investor’s language, such that the distinction between homes as socially valued living environments and homes as investment objects has become blurred. This makes it difficult – perhaps impossible – for households to assess the risks involved in home purchases.     

Historicizing housing typologies: beyond welfare state regimes and varieties of residential capitalism

Abstract

Comparative housing scholars have, for many years now, imported typologies from non-housing spheres to explain housing phenomena. Notably, approaches attempting to account for divergent housing tenure patterns and trends have frequently been organized around typologies based on the assumption that a causal relationship exists between homeownership rates and the type of welfare regime or, more recently, the variety of residential capitalism a country exhibits. While these housing-welfare regime approaches have provided important research tools, we argue that the typologies they generate represent cross-sectional snapshots which offer little enduring cogency. Based on long-run data, we show that the postulated associations between homeownership, welfare and mortgage debt are historically contingent. This paper makes the case for employing historicized typologies, proposing a country-based typology linking historical housing finance system trajectories to urban form and tenure, with regional dimensions. We argue the need for typologies which can accommodate longitudinal, path-dependent dimensions, both within and between countries.     

From Asset Based Welfare to Welfare Housing? The Changing Function of Social Housing in Ireland

This paper examines a distinctive and significant aspect of social housing in Ireland—its change in function from an asset-based role in welfare support to a more standard model of welfare housing. It outlines the nationalist and agrarian drivers which expanded the initial role of social housing beyond the goal of improving housing conditions for the poor towards the goal of extending homeownership, and assesses whether this focus made it more similar to the ‘asset based welfare’ approach to housing found in South-East Asia than to social housing in Western Europe. From the mid-1980s, the role of Irish social housing changed as the sector contracted and evolved towards the model of welfare housing now found in many other Western countries. Policy makers have struggled to address the implications of this transition and vestiges of social housing's traditional function are still evident, consequently the boundaries between social housing, private renting and homeownership in Ireland have grown increasingly nebulous.     

Exploring ‘Housing Asset-based Welfare’. Can the UK be Held Up as an Example for Europe?

In the UK, homeownership has become increasingly important as a financial asset used for welfare needs, particularly during old age. It has been suggested that other European countries will follow the example of the UK. Traditionally, homeownership has been regarded positively because of the low housing expenses associated with outright ownership and the financial benefit of having a nest-egg that can be released, if needed, by selling. New mortgage equity release products reduce liquidity constraints and are regarded as promising in the context of changing welfare states. This research focuses on household strategies. It finds that housing assets play a role in households' financial planning in all countries within the study, particularly where welfare levels are low or decreasing. Homeownership was used in the traditional way in all countries, but it is only in the UK that households have adopted mortgage equity release products to cash in their housing equity for welfare needs.     

Longitudinal analysis of the formation and realisation of preferences to move into homeownership in the Netherlands

This study investigates how life course characteristics and housing market circumstances affect the formation and realisation of preferences to move into homeownership. Using a data set from the Netherlands in which data from three cross-sectional housing surveys are enriched with longitudinal register data for the period 1998–2008, we follow aspiring homeowners regarding their actual residential behaviour. We find that only 31 % of the aspiring homeowners became homeowners within 2 years, approximately 13 % moved to rental homes, and the vast majority did not move at all. Insufficient socioeconomic resources and a high house price-to-rent ratio hamper the realisation of preferences to move into homeownership. However, these hampering factors are at least as important as the extent to which individuals prefer to move into homeownership. This last finding suggests that housing tenure preferences cannot be viewed as ‘pure’ preferences.     

Landlord attitudes to the private rented sector in Ireland: survey results

The private rented sector (PRS) in Ireland has grown rapidly over the past decade. A significant element of this growth occurred post-2006 and may be attributed to issues associated with the housing boom and bust. As economic recovery gets underway, severe supply constraints have emerged, putting pressure on the PRS. This paper presents findings of a national survey of landlords undertaken at this time, the first of its kind in Ireland. Despite the current difficulties being experienced in the Irish rental market over 60 per cent of landlords intend to remain in the sector. The survey points to policy changes that could help provide a more stable rental market, for example, the provision of unfurnished accommodation and longer leases. With approximately one-third of landlords expressing the intention to leave, maintaining supply remains a key challenge for the sector.     

The German housing system: fundamentally resilient?

The initial research question was: How can we explain the fact that the German housing system was seemingly unaffected by the financial crisis? The relative macro-economic stability of the German economy is part of the story, but the initial question led to a more fundamental analysis of why there had been no precrisis excesses in the German housing market. The longer term lack of volatility in Germany is just as in need of explanation as the excesses elsewhere. An important part of the explanation may be the particular tenure structure of the German housing market—which is characterized by a low homeownership rate and a large market share for private landlords. This structure was shaped over time by institutional development. In particular, mortgage finance systems and habits did not develop independently of that tenure structure. Equally that tenure structure arises in part from regulation and housing subsidy systems that do not favour homeownership.     

Does locality make a difference? The impact of housing allowance reforms on private landlords

Housing subsidies are used by developed welfare states to ensure their citizens can access decent and affordable housing. This paper assesses the relative importance of individual and area level factors on the degree to which private sector landlords were affected by changes to Local Housing Allowance (LHA) in the UK. The changes were part of the government’s package of measures to reform LHA and reduce the welfare benefit bill. Multi-level modelling techniques have been applied to a longitudinal survey of 788 private sector landlords who had LHA tenants in 19 Local Authorities across GB. The analysis shows that whilst landlords were affected by reforms, area effects were not as pronounced as anticipated. In general, landlords were equally affected regardless of where they operate. The findings suggest tenants in the most affected areas have absorbed increases in their rent shortfall signifying income was not the overriding determinant of demand.     

The Effect of EU-Legislation on Rental Systems in Sweden and the Netherlands

Both Sweden and the Netherlands had housing systems that include broad models of municipal housing (Sweden) or social housing (Netherlands). These broad models, however, came under discussion due to the competition policy of the European Commission. Financial government support – state aid – for public or social housing is considered to create false competition with commercial landlords. The countries chose different ways out of this problem. The Netherlands choose to direct state aid to a specified target group and had to introduce income limits for dwellings owned by housing associations. Sweden instead chose to change the law regulating municipal housing companies and demands that these companies should act in a ‘businesslike way’ and with that aims to create a level playing field. This paper will describe why the two countries chose different options, the development during the first years, and also speculate about the consequences on the longer run and the future role of the public/social housing sector in housing and urban policy.     

Housing Tenure and Neighbourhood Social Capital

Prior research finds a positive association between social capital and community well-being, ranging from decreased crime to greater local economic development and resiliency. Using a nationally representative sample from Canada, this study explores the specific impact of housing tenure (homeownership vs. renting) on three forms of neighbourhood social capital: bonding (trust, exchanges among neighbours and sense of belonging to one’s community), bridging (participation in local organizations) and linking social capital (voting in municipal elections). Findings suggest a positive association between homeownership and forms of bonding social capital and, to a lesser degree, linking social capital, but no clear effect on bridging social capital. Length of residence, having children at home, education, being a visible minority and region also emerged as significant in many models. We argue that exploring further housing stabilization and community-building efforts among rental properties – both public and private – might yield important social capital returns.     

Landlords and housing in depression

Concentrating on the Great Depression in North American cities, but also drawing comparisons with the lesser depression of the 1890s, and with a different experience of depression in 1930s Great Britain, this paper argues that more attention should be paid to the role of, and problems faced by, private landlords, who still provided the majority of housing in most cities. Following a review of the crisis of housing construction and finance in early 1930s North America, the situations of different kinds of landlord (working class, philanthropic, speculative) are discussed. The overall effect of depression, in reducing levels of home ownership and changing the character of landlordism from investment to speculation, is contrasted with the outcome in Great Britain, where depression was associated with the growth of home ownership.     

The distribution of housing wealth in 16 European countries: accounting for institutional differences

Housing wealth is the largest source of household wealth, but we know little about the distribution of housing wealth and how institutions have shaped this distribution. Subsidies for homeownership, privatisation of social housing and mortgage finance liberalisation are likely to have influenced the distribution of housing wealth in recent decades. To examine their impact, we describe housing wealth inequalities across occupational classes for two birth cohorts aged fifty and older. The analysis is conducted across 16 European countries with divergent welfare states and housing systems using the fourth wave of the survey of health, ageing and retirement in Europe (SHARE; 2011/2012). Our results indicate that the expansion of homeownership in a market-based housing system is associated with a more unequal distribution of housing wealth across occupational classes, as an increasing number of ‘marginal’ owners are drawn into precarious homeownership. Such a pattern is not found in housing wealth accumulation regimes with a less market-based provision of housing. When the state or the family drive homeownership expansion, a de-coupling of labour market income and housing consumption results in a more equal distribution of housing wealth.     

‘You can’t put your roots down’: housing pathways,rental tenure and precarity in older age

Abstract

In light of housing affordability concerns, we examine older people’s experiences of renting within a context of enduring home-ownership norms and aspirations. Adapting Clapham’s housing pathways framework, we ask: How is rental tenure experienced by older people who have encountered precarity in their housing history? Drawing on interviews with 13 older tenants, we observe the uneasy relationship between tenure insecurity and housing quality, and tensions between choice and luck in experiences of renting in later life. Three pathways related to renting in older age were apparent: life-long renting; loss of homeownership through adversity; and deliberate decisions to transition to renting. We note that challenges encountered in current and previous housing situations lead to diverse narratives of precarity in later life. These precarious experiences can be exacerbated by intersecting uncertainties associated with health, financial and personal circumstances. Older tenants’ housing pathways and experiences illuminate ways in which precarity can disrupt opportunities for ageing well and ageing in place.