Abstract
Price inflation has outbalanced the income of residents and buyers in major post-industrial city-regions, and real estate has become an important driver of these inequalities. In a context of a resilient inflation of home values during the last two decades in the greater Paris Region, it is critical to examine housing price dynamics to get a better understanding of socioeconomic segregation. This paper aims at presenting spatial analysis of the dynamics of segregation pertaining to inflation, analyzing price and sellers and buyers data. Using interpolation techniques and multivariate analysis, the paper presents a spatial analysis of property-level data from the Paris Chamber of Notaries (1996-2012) in a GIS (159,000 transactions in suburban areas, single family homes only). Multivariate analysis capture price change and local trajectories of occupational status, i.e. changes in balance between inward and outward flows of sellers and buyers. We adopt a method that fits the fragmented spatial patterns of suburbanization. To do so, we remove the spatial bias by means of a regular 1-km spatial grid, interpolating the variables within it, using a time-distance matrix. The main results are threefold. We document the spatial patterns of professionalization (a rise of executives, intermediate occupation and employees) to describe the main trends of inward mobility in property ownership in suburbs, offsetting the outward mobility of retired persons. Second, neighborhood trajectories are related the diverging patterns of appreciation, between local contexts of accumulation with a growth of residential prices, and suburbs with declining trends. The maturity of suburbanization yields a diversified structure of segregation between the social groups, that do not simply oppose executives vs. blue collar suburbs. A follow-up research agenda is finally outlined.
Highlights
In France, continuous inflation of residential real estate for the last 20 years and after the financial crisis has remained a paradox: while the evolution of both price to income ratio and rent to price ratio [1] should discourage homebuyers and investors in French metropolitan areas, housing markets have remained active and the price trend did not reverse [2, 3], a situation that Timbeau [4] analyzed as a “resilient bubble”
We elaborate on Piketty’s statement (2013), that real estate assets have become a main driver of socio-spatial inequalities among households, the flow of investment by households being instrumental in the dynamics of asset capitalization and segregation
We argue it is critical to get a better understanding of the shape and dynamics of inequalities in the outer-suburbs of Paris, by the means of exploring the actual role that typical suburban single family homes, residential estates and subdivisions, have in property ownership, for instance on upward or downward mobilities [78], for two main reasons:
Summary
In France, continuous inflation of residential real estate for the last 20 years and after the financial crisis has remained a paradox: while the evolution of both price to income ratio (i.e. affordability index) and rent to price ratio [1] should discourage homebuyers and investors in French metropolitan areas, housing markets have remained active and the price trend did not reverse [2, 3], a situation that Timbeau [4] analyzed as a “resilient bubble” This issue forms the basis of our research. We assume that the price inflation regime has been produced by an unprecedented flow of credit and transmission of assets (i.e. intergenerational transfers) fueling price inflation and inequalities
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