Home ownership as a (crumbling) fourth pillar of social insurance in Australia

Australia is seen as being at the forefront of shifts to an explicit asset-based policy in its approach to maintaining post-retirement living standards, having initiated a move away from an unfunded retirement income system to a universal, funded system in the early 1990s. This move supplemented a considerable implicit asset-based policy based on home ownership. This paper examines the potential that asset-based welfare has to protect households from poverty after retirement by focusing on the role of home ownership in preventing poverty among older Australians and on likely future trends in asset accumulation. It suggests that, although asset-based welfare has the potential to ease the fiscal constraints faced by the state, it may well lead to poorer social insurance outcomes for households with limited saving capacity over their lifetime. Older households who miss out on home ownership are shown to be multiply disadvantaged: they have lower non-housing wealth, lower disposable incomes and higher housing costs in retirement than homeowners and they have significantly higher after-housing poverty rates. Projections suggest that this group will grow in size in the coming decades. These outcomes suggest that Australia’s asset-based welfare system is crumbling.     

Impacts of contrasting housing policies on low-income households in Australia and the Netherlands

This paper aims to contribute to the debate in comparative housing studies about the significance of national housing policies by considering what can be learnt from analysing the consequences of different policy paths. In particular, the paper looks at the evidence of the long-run impacts of different housing strategies adopted to assist lower-income households in Australia and the Netherlands, using housing affordability as a measure of their impact. Australia is an example of a country that has promoted mass home ownership across the income distribution supplemented by a very small public housing system. In contrast, the Netherlands has relied more on a large and diversified social housing sector. The comparative analysis shows that there are many similarities in the patterns of affordability among low-income households in the two countries despite the use of different policy means. In the past, both countries had good success providing secure and affordable housing for poorer households. Now, lower-income households are experiencing greater affordability problems that are linked to societal changes and the retrenchment of government housing assistance in both cases. However, the study also finds that affordability problems among lower-income households are worse in Australia because of the greater reliance on private housing in that country.     

A private rental sector paradox: unpacking the effects of urban restructuring on housing market dynamics

The private rental sector (PRS) is growing in many advanced economies due to declining home ownership and retrenchment in social housing. This paper examines changes in the PRS in the context of housing market change and ongoing urbanisation processes. Using the example of Australia, it identifies a paradox when examining detailed changes in PRS composition between 1996 and 2011. Increasing demand from higher and lower income households has occurred alongside increasing concentration of supply in mid-market segments. The paper discusses possible explanations of this mismatch. It suggests that middle/higher income households rent through a mixture of constraint and choice in areas with a high level of amenity, adding to understanding of gentrification of inner-city areas. Urban restructuring, evident in increased land values in inner areas of large cities, has resulted in limited ‘filtering down’ of older housing into low-rent private rental stock and a concentration of investment in supply in mid-market segments with greatest prospects for resale and rental.     

The downside of home ownership: Housing change and mortgage arrears in the republic of Ireland

Recent debates concerning the existence of social divisions within home ownership hold implications for analyses of housing policy. This is especially true in situations where housing policy has been driven by an overt support for home ownership. In particular, the consequences of expanding home ownership among low‐income groups needs to be examined. This paper argues that an appropriate framework for such an investigation requires a three tiered approach encompassing housing policy, institutional behaviour and the housing experiences of households. Adopting a ‘structures of housing provision’ approach (Ball, 1983; Ball & Harloe, 1992), this paper examines the consequences of extending home ownership in the Republic of Ireland over the period 1970–90. Moving from an overview of housing policy and institutional activity in housing finance, the paper addresses the issue of mortgage arrears through an analysis of building society management practice and household experiences.     

Private Renting in a Home-owning Society: Disaster,Diversity or Deviance?

The rise in private renting in home ownership societies has been variously interpreted as increasing risk and insecurity and providing more flexible housing options for an increasingly diverse resident cohort. Drawing on an original survey and in-depth interviews with private renters in two cities in a classic home ownership society (Australia), there is clear support for the “disaster” interpretation in respect of low-income households renting in outer urban areas, with financial stress and insecurity reflecting and compounding disadvantage. For many others, private renting can be interpreted as a “constructive coping” strategy in the context of urban housing market restructuring. A sizeable cohort of private renters explicitly prioritises living in a desired inner/middle city location over owning. One – albeit relatively small group – appears “deviant” from the home ownership norm in associating private renting with greater lifestyle freedom. The paper contributes an understanding that location and lifestyle are of paramount importance to many private renters rather than housing tenure per se.     

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.     

Housing supply in Ghana: a study of Accra, Kumasi and Berekum

This is a study of housing supply in three urban areas in Ghana: Accra the capital city, Kumasi, the most important provincial city, and Berekum, a small town. The sample of over 1600 households is divided into renters, recent owners, and longer established owners. The last group is divided into those who have and those who have not extended their home in the previous 6 years. The data provides an insight into who is supplying houses (and extensions), what sort of housing they are building, their reasons for building and the problems encountered in achieving ownership. The study shows that house ownership is available to much lower income households than expected, especially when traditional compounds are built; that owners are relatively old, have large households and occupy considerably more rooms than renters, and build houses larger than they need and let the remainder to tenants or relatives. There is a great need for housing finance because land is currently inappropriate for collateral against a building loan. Research is needed to develop a means by which land could be used as collateral for a loan without unravelling the customary non-marketability of land.     

The rhetoric and reality of housing choice: The role of urban consolidation

In Australia, growth at the fringe has been seen as an inevitable response to a lack of affordable housing in the inner and middle zones of the major metropolitan cities. Urban consolidation was seen as one way of improving housing affordability and increasing housing choices and, at the same time, constraining outward growth. It will do so only if households forego past preferences for ownership of a detached house. This paper examines the contribution urban consolidation has made to meeting affordability and choice objectives by providing some insights into whether households are trading off tenure choices for lifestyle choices based on location and dwelling type. It also provides information on the extent of spatial polarisation of income that has contributed to the observed outcomes.     

Home ownership and political activism: An interpretative approach

This paper explores the relationship between home ownership and community‐based political activism. It is based on 31 intensive interviews and a case study of community activism in an inner urban neighbourhood of Melbourne. This paper argues that a causally adequate relationship between home ownership and political activism can be specified, grounded in the economic, political and cultural meanings of home ownership. Attention is drawn to the multifaceted nature of this causal relationship, as households bestow a varying range of meanings on home ownership at different times as circumstances change.     

Property-based welfare and European homeowners: how would housing perform as a pension?

Notwithstanding current market volatility, there has been exceptional expansion in owner-occupied housing sectors and increases in house prices across European countries in recent decades. In the EU, individual wealth held in housing equity, especially among older people, has been considered a substantial reserve that could be tapped into to meet future pension needs as the ageing of the population becomes a greater stress on European welfare states. This paper seeks to take the notion of ‘property-based welfare’ further by examining, in principle at least, how home ownership may function as a pension across EU states. This firstly involves very approximate estimates of the types of, and rates of, income homeowners could hypothetically generate from their homes, including forms of income in kind. Secondly, criteria are identified to estimate how ‘adequate’ such potential incomes are in relation to working incomes and in bringing retired households above poverty levels. Thirdly, different circumstances across EU member states with regard to existing housing and pension arrangements are examined. Broad national groupings appear evident, with housing income having least impact in older member states in central and northern Europe. The paper concludes that while the potential outcome of housing wealth is country specific, in many cases, greater dependency on home ownership in welfare provision, particularly if it is used as a substitute rather than a complement to existing arrangements, may have adverse consequences for many.     

The Great Australian Dream reconsidered: A review of Kemeny

This paper evaluates Jim Kemeny's analysis of the causes and consequences of mass home ownership in Australia. The first part of the paper summarises Kemeny's position, and the second questions the adequacy of some of the key theoretical and historical aspects of his argument. The critique pivots on three theoretical themes: firstly, Kemeny's apparent failure to recognise that home ownership is simply a category of consumption which is given historical, political and economic specificity by the social relations of housing provision; secondly, Kemeny's tendency to ‘fetishise’ home ownership; and thirdly, the problematic way in which Kemeny attempts to account for state housing policy formulation. Historical material is presented to show how these theoretical and conceptual problems result in Kemeny developing a questionable explanation of the development of mass home ownership in Australia, and tentative policy implications are offered. Although the paper concentrates on Kemeny's contribution to Australian housing studies, many of the points raised in the review are of particular relevance to other countries with high home ownership rates.     

‘Deliberative development’: Australia’s Baugruppen movement and the challenge of greater social inclusion

Abstract

German Baugruppen are the most well-known of the collaborative, self-organized alternatives to speculatively produced multi-residential housing, delivering housing at a significant price discount to market. However, Baugruppen have been criticized for excluding less affluent households with financing and social capital barriers identified by Hamiduddin and Gallent as reinforcing socio-economic stratification. Collaborative, self-organized housing is, however, under-researched and there has been scant attention to financing. Collaborative, self-organized multi-residential housing in Australia is known as ‘deliberative’ development to differentiate it from ‘speculative’ development. We draw on case studies of deliberative development in Australia to reveal how projects are financed and how financing impacts on social equity considerations. Proponents of contemporary deliberative development in Australia are deeply concerned about housing affordability and declining rates of home ownership. This has focused attention on development financing as a key to systemic change paving the way for inclusion of less wealthy households.     

The rhetoric and reality of housing choice: The role of urban consolidation

Abstract

In Australia, growth at the fringe has been seen as an inevitable response to a lack of affordable housing in the inner and middle zones of the major metropolitan cities. Urban consolidation was seen as one way of improving housing affordability and increasing housing choices and, at the same time, constraining outward growth. It will do so only if households forego past preferences for ownership of a detached house. This paper examines the contribution urban consolidation has made to meeting affordability and choice objectives by providing some insights into whether households are trading off tenure choices for lifestyle choices based on location and dwelling type. It also provides information on the extent of spatial polarisation of income that has contributed to the observed outcomes.     

Encouraging Mortgage Lending in 'Underserved' Areas: The Potential for Expanding Home Ownership in the US

This study estimates the size of the potential US home owner market and examines the relative default risks associated with expanded home ownership among lower-income, 'underserved' households. Using the 1990 SIPP database, a logit model is developed that predicts the likelihood that a renter household will move into home ownership during an 18-month period. Parameters are estimated using a white, suburban renter sub-population. These are then applied to a nationally-representative sample of renter householdsto produce an aggregate,expected number of transitions into home ownership. The difference between this expected number and the actual number of transitions represents the baseline estimate of the number of additional transitions that might be expected were lending practices and conditions prevailing for whites in suburban areas to be applied everywhere else. The relative default risks are assessed of these potential home owners and the renter households who moved into home ownership by applying a well-known default probability equation. The resulting distributions of default probabilities are then compared, using low- and median-priced housing cost assumptions and for several income groups. In the extended phase of the analysis, an estimation is made of various pools of prospective home owners that might be tapped with more aggressive lending policies. These prospective home owners have both a large propensity to make the move into home ownership (relative to those that actually do), and do not present above average default risks were they to do so. The baseline analyses indicate that just over 600 000 (2.1 per cent) more US renter households would become home owners during the period if they could buy low-cost homes and the underwriting practices and opportunitiesfound in white suburban areas were applied uniformly across the nation. If they were limited to purchase of a median-cost home, this figure drops slightly to 522 000 (1.85 per cent). Extended analyses suggest that up to 2.71 million low-to-moderateincome renter households (7.6 per cent of all renter households) should prove more attractive to mortgage lenders than the average first-time home buyer and possess a relatively high probability of moving into home ownership.     

Growth and change in one person households: Implications for the housing market

As a result of several demographic and social trends, the one person household accounts for approximately one quarter of all households in Australia and is expected to further expand to one-third by 2021. After couple families, the single person living alone is the most numerous household form. The paper differentiates one person households by life course stage and considers their likely housing demand in terms of tenure, dwelling type and number of bedrooms. Original analysis of the 1996 ABS 1% Household Sample File has been undertaken. Home ownership increased over the life course for singles, but not to the same extent as for other households. Moreover, there is some evidence to suggest that, household income aside, people living alone may prefer flats, units or apartments over detached houses. The paper suggests that our understanding of housing careers needs to incorporate the possibility of one or more spells as a one person household.     

A GEOGRAPHY‐SPECIFIC APPROACH TO ESTIMATING THE DISTRIBUTIONAL IMPACT OF HIGHWAY TOLLS: AN APPLICATION TO THE PUGET SOUND REGION OF WASHINGTON STATE

ABSTRACT: This study contributes to the debate about tolls’ equity impacts by examining the potential economic costs of tolling for low‐income and non‐low‐income households. Using data from the Puget Sound metropolitan region in Washington State and geographic information systems methods to map driving routes from home to work, we examine car ownership and transportation patterns among low‐income and non‐low‐income households. We follow standard practice of estimating tolls’ potential impact only on households with workers who would drive on tolled and nontolled facilities. We then redo the analysis including broader groups of households. We find that the degree of regressivity is quite sensitive to the set of households included in the analysis. The results suggest that distributional analyses of tolls should estimate impacts on all households in the relevant region in addition to impacts on just users of roads that are currently tolled or likely to be tolled.     

Growth and change in one person households: Implications for the housing market

Abstract

As a result of several demographic and social trends, the one person household accounts for approximately one quarter of all households in Australia and is expected to further expand to one‐third by 2021. After couple families, the single person living alone is the most numerous household form. The paper differentiates one person households by life course stage and considers their likely housing demand in terms of tenure, dwelling type and number of bedrooms. Original analysis of the 1996 ABS 1% Household Sample File has been undertaken. Home ownership increased over the life course for singles, but not to the same extent as for other households. Moreover, there is some evidence to suggest that, household income aside, people living alone may prefer flats, units or apartments over detached houses. The paper suggests that our understanding of housing careers needs to incorporate the possibility of one or more spells as a one person household.     

Achievement of home ownership among post‐war Australian cohorts

Entry costs to home ownership have been rising in Australia since the mid‐1950s but home ownership rates had not fallen by the mid‐1980s. Drawing from a national life history survey carried out in 1986–87, this paper shows that median ages for first time home buying have been declining among successive cohorts over the post‐war era. The paradox of rising entry costs and earlier home buying may be explained by rising labour force participation among women immediately after marriage and awareness of the increasing financial returns from long‐term home ownership. Among the later cohorts, early entry to home ownership appears to have been associated particularly strongly with wives' employment after marriage and husbands' incomes. The findings suggest that access to home ownership in the future may be increasingly limited to young adults having high household incomes.     

Private Renter Households: Who Are The Long-Term Renters?

Despite the perception that Australia's private rental market serves principally as a short-term transitional housing tenure, 40 per cent of households in this sector have rented for longer than ten years. This paper enlarges the housing career concept by proposing two types of long-term private renters: continuals (always rented since leaving the parental home) and returners (rented, purchased home, rented again). By using the multivariate statistical technique, CHAID, the analysis demonstrates that continuals and returners form ten distinct renter segments, defined largely by differences in age, marital status, source of income and household income. In the main, continual segments feature renters in the 30–44 year age group, not yet married or, if married (or formerly married), reliant on social security payments. In contrast, most returners earn private incomes, and tend to be older than the continuals (generally over 45 years). The segment most strongly associated with returning to rental housing exhibits the highest household income level, prompting speculation that some households may choose renting over ownership. The analysis further reveals that continual longterm renters encounter a disproportionate share of housing difficulties, including high rents, poor affordability and excessive residential upheaval.