Changing urban housing markets in advanced economies

Abstract

For decades, the main distinguishing feature of urban housing markets in advanced economies has been suburbanization. Many people with middle and higher incomes have left the city and settled in the suburbs. The spending power associated with the city centre is lost to the suburbs, which have become increasingly prosperous. The Americans have a word for the legacy of this trend. They call it the ‘doughnut city’: empty buildings, derelict areas, crime, and vandalism in the centre; and wealth, happiness, and family life in the suburbs. In the post‐industrial arena, we can observe a process of re‐urbanization which is leading to a revival of the urban economy. This revitalization can be explained by the transformation from industrialization to knowledge‐intensive business services stimulated by the ICT revolution. In this paper we examine the different views and the evidence on the impact of ICT on housing functions and on urban configurations. We contend that a change is occurring in the temporal and spatial relationship between housing and employment and that network cities and urban networks seem an obvious perspective for many urban areas in the decades to come. We describe this strategic urban transformation and the changing urban housing markets and present the approach adopted by the Dutch government: urban restructuring and re‐differentiation of the housing stock in less popular urban districts. We sketch the impact of the changing urban and regional economy for urban planners and housing officials. As a result of urban revitalization we see new opportunities for urban housing markets and urban developments, and new challenges for urban and housing policies.