Marriage-induced homeownership as a driver of housing booms: evidence from Hong Kong

Abstract

Buying a home for marriage is customary in many societies. Traditionally, therefore, young couples getting married is a key driver of demand for homeownership. Yet the idea of marriage-induced demand for homeownership is a relatively underexplored component of housing price change. We examine the role of marriage-induced demand for homeownership in Hong Kong, a relatively self-contained housing market with fewer options for migration than most large cities. We use an instrumental variable strategy to test the hypothesis that more unmarried individuals at the prime age for marriage increases housing prices. We find that an additional one thousand marriage-aged but unmarried individuals leads to a seven per cent increase in housing prices. These findings confirm the importance of demographic factors such as cohort size and marriage rates on housing price projections, housing needs assessments, and housing policy.     

Changes in transitions from private renting to homeownership in the context of rapidly rising house prices

A period associated with the emergence of the current housing crisis in Britain provides a testbed in which to investigate household tenure choice in the context of rapidly rising house prices. We compile a bespoke data-set combining data from the British Household Panel Survey and sources of local and national housing and mortgage market information covering the period 1994–2008. During this period, we observe three key changes in behaviour associated with the emergence of the housing crisis: (i) increasing acceptance of long-term renting; (ii) the emergence of local house prices as a factor inhibiting entry to homeownership at district level; and (iii) the cessation of moving to a lower cost district as a strategy to enter homeownership. We interpret these findings as some private tenants reducing their aspiration for homeownership, and those seeking entry to homeownership shifting strategy from moving to cheaper districts in favour of staying put and saving.     

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.     

Investigating housing tenures beyond homeownership: a study of informal settlements in Kolkata,India

Improving the lives of households in informal settlements is a major development challenge. Though ownership is the predominant housing tenure arrangement pursued in national and international housing policies, there is a growing consensus that forms of tenure beyond homeownership may provide greater benefits to some households. In Kolkata, informal settlements (bastis) are the primary source of affordable housing for the urban poor. Relying on detailed household survey data, we investigate the utility gained from the diversity of housing tenure arrangements in bastis and the factors that increase the length of time a household lives in a settlement, using multinomial logit and ordinary least squares regression specifications. Our analyses show that in comparison to ownership, leasing or renting benefits large households and new migrants. Our findings suggest that policies targeted at households who rent and lease, along with improving housing and supporting infrastructure, can be effective mechanisms for improving household well-being.     

Tenure type landscapes and housing market change: a geographical perspective on neo-liberalization in Sweden

Abstract

Discussions of tenure mix have received renewed interest as many have suggested that neo-liberalization has made way for gentrification of neighbourhoods and increasing segregation. Yet, few scholars have studied country-wide changes in tenure mix, due to the lack of data and appropriate methods. In this article, we propose to use tenure type landscapes to analyse changes in housing policy. We do so while acknowledging the evolution of housing policies in Sweden since 1990. Using individualized and multi-scalar tenure type landscapes to measure change in neighbourhoods, we analyse housing clusters in 1990 and 2012. We show that the tenure landscape in 1990 at the height of the welfare state was fairly diverse and mixed. During the next 22 years, however, the landscape changed to become more homogenized and dominated by ownership through tenure conversions and new housing. We argue that awareness of these changes is essential to understanding present and future segregation and gentrification processes.     

Housing market dualization: linking insider–outsider divides in employment and housing outcomes

Abstract

Past decades of economic growth, relatively widespread employment security and expanding mortgage markets promoted growing homeownership. Recent years have witnessed this growth undercut across advanced economies, evidenced by a rise in other tenures and increasing housing precarity. Studies have shown that these housing outcomes follow more fundamental changes in labour markets. By adapting the established concept of labour market dualization to housing, this paper examines how employment and housing positions are intertwined under late capitalism, and how their relationship has changed through the Global Financial Crisis. Examining the salient case of the Netherlands through household-level data from the LISS panel, we demonstrate that being a labour market ‘outsider’ vastly increases the likelihood of being an ‘outsider’ across housing market dimensions, in terms of housing equity, affordability and prospective asset accumulation. Comparing housing and labour dualization over 2008 and 2016, we further show that the share of multiply disadvantaged households has grown substantially, both among labour market insiders and outsiders.     

Collateral Damage? Transforming Subprime Slum Dwellers into Homeowners

Homeownership has been elevated to the position of a superior form of tenure, offering seemingly limitless benefits from capital gain to more abstract notions of security, empowerment and good citizenship. The international discourse on housing policy has mirrored this privilege, particularly evident with the celebration of Hernando de Soto and his promotion of formal property rights as the solution to global poverty. Formalisation schemes are said to provide a route to economic prosperity by transforming ‘slum dwellers’ into ‘homeowners’, offering a route to access formal credit and ending the undercapitalisation of the poor. Drawing on the example of de Soto-inspired MKURABITA titling scheme in Tanzania, this paper questions the favour of ownership policies in the Global South in the wake of the subprime crisis.     

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.     

Housing Consumption and Housing Inequality in Chinese Cities During the First Decade of the Twenty-First Century

During the first decade of the twenty-first century, Chinese cities have experienced the unprecedented housing development and marketization, which has profoundly changed housing consumption. Using the latest census data, this paper provides the first evaluation of housing consumption in Chinese cities during 2000–2010. Not surprisingly, housing consumption has improved significantly over time, especially in the first five years due to more rapid marketization. Yet, housing inequality has increased significantly over time, especially across education groups. There is also significant spatial inequality at provincial level; yet, it has generally declined over time except inequality in homeownership and subsidized housing. Improved housing consumption and a complex pattern of housing inequality are two main characteristics of housing consumption during this decade.     

Neighbourhood inequality spillover effects of gentrification

Previous research has considered how gentrification may alter the racial composition, income composition and income segregation within a neighbourhood. An increase in income segregation at the neighbourhood level may be evidenced by a reduction in income inequality, which may harm low-income households. We examine how the influence of gentrification, with respect to changes in income inequality at the neighbourhood level over time, may spill over into surrounding neighbourhoods as lower-income households' location choices change. We use data from the 30 largest Core Based Statistical Areas in the US from 2000–2010 and find that areas bordering newly gentrified neighbourhoods experience an increase in income inequality (potentially benefiting low-income households). This effect appears to be concentrated in relatively smaller CBSAs, where lower-income households may have less mobility, and in surrounding neighbourhoods that are themselves relatively lower-income.     

Housing costs,poverty and inequality in Australia

Housing costs have long been recognised as a factor contributing to poverty, and poverty researchers have estimated poverty using income before and after deducting housing costs. This paper examines the treatment of housing in the literatures on poverty and housing and applies the before and after housing costs approach to examine the extent of both poverty and income inequality in Australia and how they have changed since the early 2000s, focusing on the role of housing costs in the periods before and after the global financial crisis (GFC). Account has been taken of changes in the income measure used by the Australian Bureau of Statistics in its household income surveys as these have been shown to have a marked impact on empirical estimates. The findings indicate that taking account of housing costs leads to greater increases in both poverty and inequality between 2003–2004 and 2007–2008 and to smaller reductions in both since the GFC in 2007–2008.     

Linking Integration and Housing Career: A Longitudinal Analysis of Immigrant Groups in Sweden

This study investigates the extent to which immigrant groups are integrated in the Stockholm region through an analysis of their housing careers. Housing conditions are linked to many important life course events, as well as to the resources and preferences of each individual family. Housing conditions influence integration, but factors related to integration can also be a cause of housing conditions. In the study, we take a truly longitudinal approach to housing careers by exploring differences in the timing of career-related events between several immigrant groups and native Swedes. The objective of the study is to explore whether the housing careers of immigrant groups follow family and work careers in a similar way as the native population. The data are derived from a longitudinal individual-level register-based data-set maintained by Statistics Sweden. The analysis is carried out by way of survival analysis. Our results confirm that there are substantial ethnic differences in housing careers that cannot be attributed to family composition or career. Our results also highlight three important factors that reduce the differences between native Swedes and immigrants groups in the tendency to enter homeownership: university degree, type of municipality and duration of stay in Sweden.     

Parental marital dissolution and the intergenerational transmission of homeownership

Abstract

Children of homeowners are more likely to enter homeownership than are children whose parents rent. We investigate whether this association is dependent on parental divorce, focusing on parental assistance as a conduit of intergenerational transmission. Event history analyses of data for England and Wales from the British Household Panel Survey (BHPS) show that the intergenerational transmission of homeownership is stronger for children of divorced parents compared with children of married parents. Such an effect may arise from two channels: (1) children of divorced parents are more in need of parental assistance due to socio-economic disadvantages associated with parental divorce; and (2) compared with married parents, divorced homeowning parents (mothers) rely more on housing wealth, rather than financial wealth, for assisting children. Findings support both explanations. Children of divorced parents are furthermore less likely to co-reside. We find limited evidence that when they do, co-residence is less conductive to homeownership compared with children from married parents.     

Evaluating Tenure Mix Interventions: A Case Study from Sydney,Australia

Policies of tenure mix, by removing concentrations of social housing or through the application of inclusionary zoning-type powers to new developments, are being pursued throughout Australia and in the USA, the UK and New Zealand. Implementing this tenure mix policy agenda requires significant intervention into urban areas that currently have concentrations of social housing, through programmes of regeneration or renewal. Despite this policy agenda, research on the benefits of tenure mix has produced inconclusive evidence, both in Australia and internationally. The paper reports on research undertaken in Sydney, New South Wales, Australia, which tests a method of evaluating tenure mix policy. The exploratory method uses dwelling price data as a proxy for measuring amenity or ‘neighbourhood quality’ changes from tenure mix interventions.     

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.     

Young People,Homeownership and Future Welfare

Homeownership has become a ‘normalised’ tenure of choice in many advanced economies, with housing playing a pivotal role in shifts from collective to asset-based welfare. Young people are, however, increasingly being excluded from accessing the housing ladder. Many are remaining in the parental home for longer, and even when ready to ‘fly the nest’ face significant challenges in accessing mortgage finance. This under-30 age group has become ‘generation rent’. As this policy review emphasises, this key public-policy issue has created a source of inter-generational conflict between ‘housing poor’ young people and their ‘housing rich’ elders. To fully understand the complexities at play however, this paper argues that we need to look beyond the immediate housing-market issues and consider how housing policy interacts with broader social, economic and demographic shifts, and how it is intimately connected to debates about welfare. This is illustrated with reference to the UK, although these debates have international resonance.     

Mixed Messages about Mixed Tenure: Do Reviews Tell the Real Story?

Mixed tenure is the predominant development and regeneration strategy and is a key component of UK housing and urban policy. It is purported to provide wide-ranging social, environmental and economic benefits to residents. While there is a large literature on mixed tenure, policy makers are likely to rely on reviews and summaries of the evidence rather than primary studies. But can they rely on such reviews? Using systematic review methods this paper critically appraises recent reviews for the evidence that mixed tenure policies and strategies have achieved any of these expected benefits. Of the six UK reviews of primary studies, most drew on less than half the available primary studies, none provided a critical appraisal of individual studies and made no comment on conflicting evidence between and within studies. While the reviews gave indications of the deficiencies of the evidence base, rather than focus on the implications of these deficiencies, four of the six reviews emphasised the positive effects of tenure mix.     

Housing of Limited Property Rights: A Paradox Inside and Outside Chinese Cities

This paper develops a prototypal theoretical framework for analyzing property inalienability and applies it to housing of limited property rights in China, which includes so-called ‘small-property-rights housing’ in the countryside (SLPR housing) and the affordable housing programme in the city (ALPR housing). The integrated analysis of ALPR and SLPR housing focuses on inalienability restrictions to ownership entitlement. By preserving current property use, inalienability can address externality, public good and even macro-economic problems that arise from property sales. Both ALPR and SLPR provide good empirical support for the theoretical hypotheses. Moreover, they demonstrate some important functions of inalienability in a transitional economy, including helping to maintain macro stability as well as being an important tool for implementing partial reform strategy. Inalienability is also a second-best tool to protect private property rights against the intervention of local political forces. However, various problems with ALPR and SLPR housing show that inalienability is also a rough tool that needs to be improved or replaced in order to achieve micro-economic efficiency.     

Tenant Empowerment Through Innovative Tenures: An Analysis of Woonbron–Maasoevers’ Client's Choice Programme

According to the recent Housing Memorandum (MVROM, 2000 MVROM 2000 Mensen-Wensen-Wonen: wonen in de 21e eeuw [What people want, where people live: housing in the 21st century] The Hague Ministry of Housing, Spatial Planning and the Environment  [Google Scholar] ), Dutch housing associations are expected to actively improve the control of tenants over their dwellings and their living environment and offer them more possibilities to choose their own type of tenure. Before the publication of the Memorandum, associations had already developed various innovative types of tenure, for example fixed rent contracts, tenant maintenance programmes and different forms of sale with discounts and risk-reducing conditions. With the introduction of these tenures, associations aim to contribute to their social objectives by improving tenants' satisfaction with their dwellings and to improve the market position of their stock as well. Our paper discusses innovative types of tenure that have been developed by the Dutch housing associations and their benefits and risks for tenant and landlord. We focus on the ‘Client's Choice’ programme that has been developed by the association WoonbronMaasoevers, which is recognised as a front-runner in offering households a wide range of choice in tenure and which is also illustrative of many of the benefits and risks of the innovative tenures.

We conclude that many of the innovative tenures, including the Client's Choice programme, can contribute to tenant empowerment and freedom of choice. However, low-income households will mostly have to keep relying on (social) rented housing and other forms of empowerment. For the landlord, the Client's Choice programme has the benefit of increasing cash flow, which can be used for (social) housing investments. However, there are also substantial financial risks, concerning the rate of sales, the development of market values and the potential costs of having to buy back all the dwellings at the end of their economic lifespan. Thus, the implementation of the Client's Choice programme on a large scale should be accompanied by measures to control or provide for these risks.