Comparing Homeowner Societies: Can we Construct an East-West Model?

Distinguishable patterns of mass homeownership have emerged across industrialised societies in recent decades, and have become increasingly central in comparative analyses of housing systems. This paper examines the nature of differences and similarities within and between two particular groups of societies where owner occupation dominates housing demand and policy systems, one constituted of English-speaking, Anglo-Saxon societies, and another of East Asian societies. The paper considers the potential of forming loose models based on core divergences in terms of systems, regimes and socio-ideological relationships. The aim is to further illustrate interactions between housing systems and welfare regimes in international contexts. Comparisons of housing and welfare elements are broadly related between societies, rather than quantitatively isolated, as systems are substantially variegated across the East Asian region. However, a loose system-model provides considerable insight into convergence within the group in regards to how housing systems have served a minimal social-welfare regime type.     

Race,class and spatial dimensions of mortgage lending practices and residential foreclosures

The American dream of homeownership for low‐income minority households has been sustained by reliance on a complex web of public programs and private institutions during the past several decades. This paper explores the racial, class and spatial dimensions of mortgage lending practices and residential foreclosures for underserved neighborhoods in Cuyahoga County, Ohio using multiple regression analysis with a spatial‐lag model. This paper shows different spatial dimensions of subprime and government‐backed loans. It reveals that subprime loans are the most influential factor explaining neighborhood foreclosure rates. This paper also demonstrates that neighborhoods with low‐income and minority households have a higher likelihood of experiencing higher rates of foreclosure. We recommend introducing targeted government programs in areas avoided by traditional lenders. These programs could reduce the foreclosure rate for homeowners that have the ability to sustain their homeownership.     

Rethinking Federal Housing Policy

Problem: Federal housing policy is made up of disparate programs that a) promote homeownership; b) assist low-income renters’ access to good-quality, affordable housing; and c) enforce the Fair Housing Act by combating residential discrimination. Some of these programs are ineffective, others have drifted from their initial purpose, and none are well coordinated with each other.

Purpose: We examine the trends, summarize the research evaluating the performance of these programs, and suggest steps to make them more effective and connected to each other.

Methods: We review the history of housing policy and programs and empirical studies of program effectiveness to identify a set of best principles and practices.

Results and conclusions: In the area of homeownership, we recommend that the federal government help the nation's housing markets quickly find bottom, privatize aspects of the secondary mortgage market, and move to eliminate the mortgage interest deduction and replace it with a 10-year homeownership tax credit. In the area of subsidized rental housing, we recommend that the current system of vouchers be regionalized (or alternatively, converted into an entitlement program that works through the income tax system), sell public housing projects to nonprofit sponsors where appropriate, and eliminate some of the rigidities in the Low Income Housing Tax Credit program. In the area of fair housing, we recommend that communities receiving Community Development Block Grants be required to implement inclusionary zoning programs.

Takeaway for practice: In general, we recommend that federal policy build on proven programs; focus on providing affordable housing for low- and moderate-income families and provide the funding to meet that goal; avoid grandiose and ideological ambitions and programs; use fewer and more coordinated programs; offer tax credits, not tax deductions; and promote residential filtering.

Research support: Partial funding support was provided by the National Science Foundation.     

On the Path to Homeownership: Money,Family Composition and Low-income Households

In Norway, as in many other countries, homeownership is encouraged politically, and a majority of the households become homeowners at some stage in their life cycle. Many households move house when circumstances change, and it is often at this point that they also make their tenure choice. This paper employs a bivariate probit framework to model the transition rate from renting into homeownership. Using a sample of initial renters, subsequent tenure choice is analysed jointly with the stay-move decision. A particularly important question in this context is whether low-income households face differential constraints on entering owner occupation that could be addressed by policy change. The empirical model includes financial characteristics, household characteristics and changes in household characteristics as explanatory variables. Changes in household composition are particularly important in explaining variations in both tenure choice and mobility. Hence, the common practice of estimating housing market behaviour using a panel of intact households potentially obfuscates important determinants of that behaviour. The paper proceeds by using the equivalent of a Chow test to show that a hypothesis of equal coefficients in samples of low- and high-income households is firmly rejected. Thus low-income households do behave differently. Short-term variations in income appear to have little effect on people's capacity to enter owner occupation. However, low-income households are more dependent on past savings for successful entry. This suggests a rather different policy approach if owner occupation is to be expanded.     

The Determinants of Home Price Appreciation Among Community Reinvestment Homeowners

Homeownership is considered an effective wealth creation mechanism for low-income households. This study examines the appreciation of homes purchased with community reinvestment loans in a national pilot in the USA called the Community Advantage Program (CAP). Homes purchased between 1998 and 2002 are found to have appreciated at a median annual rate of 5.4% between the time of purchase and spring 2003. This is less than the national house price appreciation index of 7.0% (covering 1998–2003) but higher than other types of investments such as the Dow Jones Index (2.78% annual growth rate) and the average rate on a 6-month CD (4.34%) over the same time period. The median increase in net housing wealth of the Community Advantage homeowners is $17 492. Returns have been particularly impressive for the lowest-income borrowers. Borrowers with less than $20 000 in annual household income at the time of purchase had a median down-payment of $1790 and have experienced a median equity increase of $24 724. Price and equity appreciation rates for African Americans are solid, but are about 10% lower than for whites.     

Local housing-market effects on tenure choice

The main objective of thepresent study is to find out which marketfactors affect homeownership attainment aftercontrolling for individual human capital. The1980 and 1990 individual Census data (PUMS) inthe U.S. are used to investigate the contextualinfluences on choosing two types of housing:single- and multi-family housing. Trichotomoustenure choice models are applied to fourrepresentative age groups. The study takesadvantage of the multi-level design, allowingrelationships between individual and housingmarket characteristics to vary from place toplace. One finding is that market variations aswell as individual characteristics affecttenure choices. The authors argue that researchon homeownership attainment should not onlyconsider individual or household attributes butshould be sensitive to spatiality thatrecognizes market effects. The conclusion isthat housing research needs to be comprehensiveenough to understand the complex interactionbetween the individual's human capital and themetropolitan housing-market characteristics.     

Intersections of inequality in homeownership in Sweden

Abstract

Inequalities relating to ownership of housing have become a major issue de jour in many Western societies. This article examines how the distribution of homeownership in Sweden relates to two factors widely seen as significant to such inequalities, namely parental tenure status and place of birth. We use longitudinal registry data to examine the bearing of these two factors on individual-level tenure progression since the beginning of the 1990s for persons at different stages of their housing careers. We extend existing understandings of Swedish homeownership patterns by demonstrating that inequalities relating to place of birth and parental tenure intersect with one another in ways that substantially advantage certain subgroups while disadvantaging others, and by demonstrating that experiences of entry into homeownership have in recent years been changing in markedly different ways for these different subgroups. Overall, Swedish homeownership inequalities, far from dissipating, appear to be hardening along existing lines.     

DIY Dreams and the Potential of Home

Despite the cultural and economic importance of do-it-yourself (DIY) home improvement, questions about its role in the production and consumption of home have been traversed in only a limited way in the housing studies literature. We consider New Zealanders’ DIY house improvement intentions and what these ideas for house modification reveal about the idealized relationships they have with their dwellings. We focus on homeowners’ thinking and dreaming about the ways the material and symbolic “potential” of home can be achieved by engaging in DIY projects. We theorize our work using the literatures on house and home, self-provisioning activities, leisure work and cultural intermediation, particularly the important roles played by family, friends and print and electronic media in advancing ideas for DIY projects.     

Age differentiation in the effect of household situation on first-time homeownership

To become a homeowner, it is necessary tohave sufficient resources and stability in thehousehold situation. In existing studies,household type is often used as a proxy forlevel of stability. Household types with a highlevel of commitment (married couples withoutand with children) are regarded as stablehouseholds, and singles and cohabitors as lessstable households. In this paper, it is arguedthat stability can be reached not only bymaking a commitment, but also by growing older.Increasing age brings stability into the livesof singles and cohabitors. Age also matters forthe structure of resources and costs ofdifferent household types. From a combinationof theory on age and theory on homeownership inthe life course, five hypotheses are derived.They are tested on retrospective data by usingdiscrete-time event-history analysis. From amodel with interaction effects, it can be seenwhether the probability of becoming a homeownerdiffers between household types in differentage groups. The results show that marriedcouples have the highest probability ofbecoming homeowners in age group 18–24, whereasthe probability is highest for cohabitors inage group 25–29, and in age group 30–34 forsingles. This supports the idea that peoplebecome homeowners either when they make acommitment, or when stability is createdthrough the passage of time in a lesscommitting household type.     

Naturalization and the transition to homeownership: an analysis of signalling in the Dutch housing market

Abstract

This article pioneers in investigating a citizenship premium for homeownership of first-generation immigrants, using Dutch register data from Statistics Netherlands (N?=?106,187). I hypothesize that naturalization favourably influences the risk-calculation of lenders through positive signalling among employed migrants, who are likely to meet the basic financial criteria for credit. Results confirm that, all else constant, employed immigrants who have naturalized are 26% more likely to be homeowner. Additional analyses specifically designed to isolate endogeneity bias show that the effect is smaller, but still reveal an increase in the probability of homeownership after naturalization. Citizenship acquisition matters less for migrants with a native-born partner, suggesting that legal status discrimination may be an underlying mechanism. I find no evidence that the relevance of citizenship is conditioned by cultural distance of the origin country or the post-2008 economic crisis. I conclude that naturalization matters in the housing market, but that its relevance cannot be generalized to all migrant groups.