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.     

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.     

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.     

Cultural Expectations of Homeownership. Explaining Changing Legal Definitions of Flat ‘Ownership’ within Britain

Following the break-up of privately rented flats in both England and Wales, and Scotland, two distinct property ‘ownership’ systems emerged. Each sought to provide individual ‘ownership’ of the flat and collective management of the block in which the flat was contained. Leasehold ‘ownership’ effectively retained the previous landlord-tenant relationship because of a peculiarity in English law that only allows ‘positive covenants’, such as maintenance obligations, to be enforced on the first purchaser of a flat, not subsequent purchasers. Although in Scotland outright individual ownership of a flat was legally possible, the management arrangements covering the common parts of the building have not proved satisfactory. Neither legal arrangement put in place an ‘ownership’ or ‘governance’ regime which matched popular cultural expectations of what individual homeownership should constitute. The scale of and scope of property law reform over the last 30 years illustrates how these popular cultural expectations have demanded due recognition within the British property system.     

Sharing Equity with Future Generations: An Evaluation of Long-Term Affordable Homeownership Programs in the USA

Shared equity initiatives provide homeownership opportunities to low- and moderate-income families who buy homes at below-market prices. The appreciation that can be earned by resellers is limited to preserve the homes' affordability at resale. This article analyses affordability, personal wealth, security of tenure, and mobility outcomes for seven shared equity programs across the USA. Homebuyers earned returns that were competitive with what they would have received if they had invested in stocks or bonds. In addition, homes remained affordable to lower income buyers over time as the homes were resold. Homeownership under these programs was sustainable: there were very low delinquency and foreclosure rates and many families who sold their homes were able to use their sales' proceeds to purchase market-rate homes. Owners also showed little evidence of being locked in place, and moved to new homes at rates near the national average.     

Housing Wealth and Housing Decisions in Old Age: Sale and Reversion

Population ageing brings new challenges to long-term household economic decisions. In the event of old-age dependency, housing assets become a key self-insurance device. However, little empirical evidence has been reported regarding an individual's expectations of having to use their housing wealth for such a purpose. This paper draws upon two complementary data sources to empirically examine: (1) the influence of housing assets on an individual's willingness-to-sell (WTS) their dwelling for care purposes, and (2) the willingness to take out a reverse mortgage contract loan in the event of old-age dependency. The paper's findings suggest that homeowners' WTS in old age is unaffected by their income or housing assets and is, rather, determined by socio-environmental housing characteristics and the individual's health and personal needs. Conversely, the study finds that the uptake of home reversion loans is largely dependent on income or education, but not on a household's housing assets.     

Shared Equity Homeownership: A Welcomed Tenure Alternative Among Lower Income Households

Shared equity homeownership (SEH) is a form of resale-restricted, owner-occupied housing for lower income households that remains affordable in perpetuity. This study explores the evaluations of and reception to SEH relative to existing tenure options by potential beneficiaries of a SEH program in Nashville, TN. Fourteen focus groups with 93 participants were conducted among lower income renters, prospective homebuyers, and delinquent homeowners. Findings revealed that 73 per cent of participants expressed interest in SEH. Participants perceived that SEH was more likely to deliver individual, community, and economic benefits than rental or homeownership options in the market. However, participants also maintained concerns about program design, development, and location of shared equity homes. Findings suggest that SEH development may be viable in localities with relatively affordable housing markets, and a large proportion of targeted beneficiaries comprehend and perceive a need for this tenure alternative.     

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.     

Constructing Renters as a Threat to Neighbourhood Safety

The physical and social organization of the urban environment plays a central role in the formation of individual perceptions of crime. This paper examines how the presence of rental housing is constructed as a risk to neighbourhood safety by urban homeowners. The presence of the ideology of homeownership fosters a social context in which renters are constructed as disinvested and irresponsible individuals. As a result, renters are perceived to pose both an indirect and direct threat to the safety of a neighbourhood. Data from 23 semi-structured interviews with urban homeowners are used to illustrate this process. The paper concludes by considering how these perceptions adversely affect tenants and perpetuate spatial patterns of inequality.     

Does the ethnic gap in homeownership vary by income? An analysis on Dutch survey data

Lower levels of homeownership among immigrant populations have frequently been related to the particular financial constraints that immigrant households can face. Various problems have been raised with this explanation for the ethnic gap in homeownership rates. This paper responds to these criticisms by sensitizing the financial constraints explanation to the possibility of differential effects of ethnicity depending upon level of income. The hypothesis that the ethnic gap is stronger for lower income groups is tested through logistic analyses of the housing tenure of Turkish and Moroccan immigrants and a comparison group of native citizens in the Netherlands. High-income Turks are revealed to have comparable rates of homeownership to high-income natives, whereas in low-income groups a large ethnic gap exists. The ethnic gap in homeownership among low-income groups could not be explained by other financial constraints (education, couple’s earning status, parental resources). Housing preferences and discrimination are possible explanations for this ethnic gap among low-income households.