High Homeownership Rates Research Articles

Understanding Homeownership Rates: the Impact of Co-residence Patterns

The socio-demographic context, which includes the co-residence patterns associated with the decisions of young adults on whether to live in the parental household or enter homeownership or renting, is directly reflected in homeownership rates at the aggregate level as a consequence of these decisions. However, the way in which tenure statistics are reported also matters in this respect. This applies specifically to household-level statistics, which are most often used to characterise housing systems. It is therefore possible to ask whether countries with high homeownership rates and, simultaneously, high shares of adult children living with their parents are truly high-homeownership societies. This study identifies the countries for which the reported tenure statistics are more influenced by demographic conditions as compared to other countries. These are the Mediterranean countries and the Central and Eastern European countries (with some exceptions).

Home-ownership and unemployment: revisiting the Oswald hypothesis from a regional heterogeneity perspective

Home-ownership may create both positive and negative externalities. As an example of a negative externality, the so-called Oswald hypothesis suggests that a high home-ownership rate creates frictions in the economy and thus increases the unemployment rate. We approach this hypothesis from a novel perspective by taking into account regional differences in population density and dwelling composition. Using municipality-level panel data, we find that although the phenomenon identified by the Oswald hypothesis may not be omnipresent, it may manifest itself, particularly in semi-urban areas where the share of large ownership dwellings is high. We also find that in-migration to these areas is lower, which is consistent with the view that the home-ownership rate may affect migration flows and, thus, economic dynamics.

Has the High Rate of Home Ownership in China Affected Residents’ Subjective Evaluation of Social Status?

Objective measures of social status based solely on socioeconomic resources have inherent limitations, impeding an accurate assessment of residents' social status issues. As a result, subjective social status has gained considerable significance in the maintenance of social order and stability. Using 2018 China Family Panel Studies (CFPS) data, we employ the Probit model to empirically examine the effects of home ownership in China on their subjective social status and their influencing mechanism. Our findings indicate that individuals with housing have higher subjective evaluations of their social status compared to individuals without home ownership, and individuals with multiple suites have higher happiness and life satisfaction. Further mechanistic analysis revealed that individuals with home ownership were able to accumulate household wealth and alleviate the sense of relative deprivation compared to individuals without home ownership, thus enhancing their subjective evaluations of their social status.

Belgium’s Successful Ride on the Elephant? The Diverging Effects of High Homeownership Rates on Inequalities

ABSTRACT This paper studies the contradictory effects of pro-homeownership policies on inequalities through the case of Belgium. While the literature describes high homeownership rates as levellers of wealth inequalities, this paper finds, using national microdata from ECHP and EU-SILC, that different mechanisms underlying homeownership growth have had contradictory effects on economic inequalities, even in the absence of a housing crisis or increase in income inequalities. Inequalities in the weight of rental costs have risen for newly contracted rental agreements in the last decade, while wealth inequalities are rising because of an increasingly exclusive mortgage-credit market. Current measurements of wealth inequalities are based on the distribution of net wealth, thereby missing the evolution of the difference between mean wealth and no wealth and the dynamic nature of wealth accumulation. Therefore, inequalities are rising in Belgium as poorer renters are increasingly constrained by rental costs when they are increasingly excluded from accessing homeownership.

Income‐poor, asset‐rich? The role of homeownership in shaping the welfare position of the elderly

AbstractThe study explores the distribution of elderly households in terms of combinations of different levels of income and wealth and relates to the typically greater homeownership rates in this group than in the younger generation. Using microdata from the Luxembourg Wealth Study for 12 countries it demonstrates that ‘income‐poor, asset‐rich’ elderly households are a quite marginal category. However, the identification of this group is crucial from the policy perspective, as it constitutes a target for actions aiming at increasing the ability of the elderly households to use housing wealth in such a way as to improve their financial well‐being. The results also suggest that higher homeownership rates among elderly households, as compared to non‐elderly households, are not accompanied by proportionally greater household wealth. Nevertheless, when the level of data aggregation is reduced, there is some evidence that homeownership is positively associated with the welfare position of the elderly.

Accelerating housing inequality: property investors and the changing structure of property ownership in Luxembourg

This paper tracks the arrival of investors in the housing market of Dudelange, Luxembourg. In so doing, it focuses on the socio-economic changes accompanying the transformation of homes into assets, since the first apartment was built in the city in the mid-1960s until 2018. Drawing on complete land registry data, we chart the structure of apartment ownership in the context of the city’s transition from an industrial to a financialised economy, with particular attention to three characteristics of buyers: age at purchase, country of birth and occupation. We investigate how homeowner characteristics have shifted over time in a context where housing policies have incentivised investor activity and demand. We highlight how three policies put in place in the early 2000s to encourage real estate investments seem to have strengthened the position of the group already most advantaged on the Luxembourg housing market: those born in Luxembourg and over 45 years of age. Given that this group has on average the highest median incomes and the highest homeownership rates, we argue that these policies that incentivised property investments are likely to have accelerated housing (and wider) inequalities in an overheated housing market.

The Gender Wealth Gap in Europe: Application of Machine Learning to Predict Individual‐level Wealth

AbstractThis article provides comparative estimates of the gender wealth gaps for 22 European countries, employing data from the Household Finance and Consumption Survey. The data on wealth are collected at the household level, while individual‐level data are needed for the estimates of gender wealth gaps. We propose a novel approach using machine learning and model averaging methods to predict individual‐level wealth data for multi‐person households. Our results suggest that random forest performs best as the predicting tool for this exercise, outperforming elastic net and Bayesian model averaging. The estimated gender wealth gaps tend to be in favor of men, especially at the top of the wealth distribution. Men have 24 percent more wealth than women on average. We also find that a high home ownership rate is associated with a smaller country‐level gender wealth gap. Our estimates suggest that the individual‐level wealth inequality is on average 3 pp higher than the household‐level wealth inequality in multi‐member households.

Does urban agriculture lead to gentrification?

Urban agriculture, experiencing a resurgence across the Global North, features prominently in food system sustainability and urban resilience discourse, planning, and policy. Research, however, indicates that racialized gentrification tends to accompany urban agriculture, similar to a phenomenon documented with other green space. This study used remote sensing to map home (N = 478) and community (N = 130) gardens across Detroit, an emblematic legacy city undergoing significant redevelopment. Despite being a city in which seventy-eight percent of the residents are Black, spatial regression revealed that gardens in Detroit are actually more prevalent in non-Black-neighborhoods. Community gardens predominate in neighborhoods where residents are younger, wealthier, and college-educated, while home gardens are more numerous in areas with high rates of home ownership. Modeling also indicated that gardens are in areas with limited access to fresh produce. Contrary to the literature, we did not find a correlation between the presence of gardens and potential gentrification. Gardens, however, are consistently more prevalent in neighborhoods that have stabilized after experiencing high rates of vacancy, foreclosure, and housing demolition. These results have three important implications. First, redevelopment processes in legacy cities such as Detroit, through urban agriculture and other green infrastructure, are likely to lead to garden distributions different than those found in cities with more typical development trajectories. Second, the research calls into question generalized assumptions that expanding green space inevitably leads to gentrification, necessitating deeper investigation of these dynamics in diverse urban settings. And finally, racialized narratives around gardens and redevelopment risk undermining long-standing connections between Detroit’s gardens and environmental justice.

International Real Estate Review

Social housing projects often face the “not-in-my-back-yard” (NIMBY) backlash from the local community who oppose and reject their construction. Considering the prevalence of NIMBY, this study examines the factors that influence the attitude of the public towards social housing construction under high home ownership rates. We conduct an ordered logistic regression analysis by using 14,275 responses from the 2015 Residential Status Survey in Taiwan. The results show some interesting findings. First, home ownership and families with a child under 18 are two of the most influential variables that have significantly negative influences on the approval of social housing construction. Renters and people with physical and mental disabilities are however more supportive of social housing. Secondly, residents in buildings with high development intensity are very supportive of the construction of social housing. Thirdly, satisfaction with neighborhood environment has a positive impact on social housing approval. Finally, residents who live in dense cities tend to support the construction of social housing. However, residents who live in satellite cities of a metropolitan region are less supportive. The results of this study reveal a regional difference in the approval of residents for social housing construction.

Inclusive or Elusive Housing? Homeownership among Muslims in Norway

Abstract Norway has a unique political focus on homeownership as a key to welfare and happiness. “Eierlinja” in Norwegian housing policy aims for a very high rate of homeownership leading to social integration of the communities enabling them as active citizens. Paradoxically, Muslim immigrants are 43%-93% less likely to own a house compared with non-immigrants, resulting in a potential increase in marginalisation of the groups who do not own their own home. To bridge this gap, we advocate a two-dimensional intervention. First, policy intervention that helps these communities to attain homeownership and, second, policy intervention that helps improve their social outcomes.

Housing differentiation and subjective social status of Chinese urban homeowners: evidence from CLDS

Chinese urbanites’ housing differentiation is a subject that attracts increasing scholarly attention. Previously, housing differentiation was measured by access to homeownership and housing tenure. Given high Chinese homeownership rates, however, heterogeneity among urban Chinese homeowners should be further decomposed. Many studies identified links between housing differentiation and social stratification, but few have examined residents’ responses to their homes. Based on the China Labour-force Dynamics Survey (CLDS), this study decomposes homeowners’ housing differentiation along three dimensions: housing conditions, housing wealth, and neighbourhood environment. We also examine the impacts of these dimensions on homeowners’ subjective social status (SSS). Significant differentiation is found among homeowners in housing conditions, neighbourhood environment, and housing loans. Furthermore, housing wealth and neighbourhood environment affect homeowners’ perceived social status. These findings advance housing differentiation studies and have important implications for policies aimed at reducing social inequality and housing poverty.

New synchronicity indices between real and financial cycles: Is there any link to structural characteristics and recessions in European Union countries?

AbstractIn this paper, we examine the comovements and relationships between real, credit, house, and equity price cycles in European Union countries looking at their link to structural characteristics and their predictive power for future recessions. We make use of new within country synchronicity indices, finding that among the different credit cycles and between the house price cycle and the real cycle, there is a relatively high level of synchronicity. Credit and gross domestic product (GDP) fluctuations seem to be less synchronised, mostly because credit volumes tend to lag the real cycle by several quarters. The high rates of private homeownership tend to be associated with larger cycles in GDP, credit, and house prices. Higher loan‐to‐value ratios, seen as a proxy of borrowing constraints, and a higher percentage of flexible‐rate mortgages, could also indicate that a country is more sensitive to shocks and possibly increase procyclicality and increase cycle volatility. Finally, the procyclicality of the credit and housing market to the GDP cycle can be linked to the fluctuation in current accounts and their misalignments with respect to the theoretical equilibrium value. Some synchronicity measures and, above all, the credit cycles may also be considered for signalling future recessions.

Urbanization in Kazakhstan: desirable cities, unaffordable housing, and the missing rental market

ABSTRACT Kazakhstan’s cities are hubs of economic opportunity and prosperity. But despite the Government’s ambitious targets, the pace of urbanization remains slow. This study focuses on two key constraints: (i) the very high cost-of-living in Kazakhstan’s cities, and (ii) the near absence of a rental housing market outside of the capital, Nur-Sultan. The findings show that the two urban centres of Almaty and Nur-Sultan are 190% and 240% more expensive to live in than the national average. Housing is the primary driver of the disparity: after adjusting for inflation, housing costs tripled in Nur-Sultan and quadrupled in Almaty between 2001 and 2015. As a result, housing costs for the local population in these areas are more unaffordable than famously exclusive cities such as San Francisco and Vancouver. Demand elasticities imply that rural and low-income households are especially unlikely to relocate to high-priced areas where employment prospects are better and average incomes are higher. Regional convergence in wage rates remains slow but appears to be proceeding most quickly in Nur-Sultan, where rental housing is most prevalent. The findings suggest that high rates of home ownership and the high cost-of-living in cities lead to exclusion of lower-income households and restrains economic growth. Highlights Urbanization in Kazakhstan is proceeding very slowly, despite ambitious government targets. The high cost-of-living in the urban areas of Nur-Sultan and Almaty deters many potential domestic migrants. This is driven almost entirely by housing costs: housing in high-demand cities is seriously unaffordable for most people, even among those already living in cities. High home ownership rates and an abnormally small rental market further reduce domestic mobility.

Affordable Housing, Disasters, and Social Equity

Problem, research strategy, and findings: The Low-Income Housing Tax Credit (LIHTC) is the most common financing mechanism for subsidized housing production in America. We investigate how and to what extent states are currently using the LIHTC to prepare for and recover from disasters. We systematically code guidelines in the 2017 LIHTC qualified allocation plans from 53 states and territories to identify disaster-related provisions. Twenty-four states and territories include provisions for preparedness or recovery in their allocation plans, of which 13 include only preparedness provisions, 3 include only recovery provisions, and 8 include both types. Preparedness provisions address project design and siting, whereas recovery provisions direct credits to disaster-affected areas or the replacement of damaged units. Using t tests, we compare three sets of states—those without any disaster-related provisions, those with either preparedness or recovery provisions, and those with both types of provisions—across measures of housing cost, demographic composition, disaster exposure, and political ideology. States with higher homeownership rates, lower home values, and lower rents are more likely than other states to have either or both types of provisions. Future research should investigate state adoption of disaster-related LIHTC provisions to better inform affordable housing policy.Takeaway for practice: State governments could mitigate disaster-related hazards and help speed recovery by including locally relevant preparedness and recovery provisions in their LIHTC allocation plans. These provisions could encourage resilient construction, weigh the social costs and benefits of LIHTC construction in floodplains, or waive program rules to address postdisaster housing shortages.

Multiple home ownership in Chinese cities: An institutional and cultural perspective

China is a country of homeowners, where >80% of households own their homes and >20% of urban households own multiple homes. China achieved this unprecedented high rate home ownership in a short period of three decades. While we have a growing understanding of homeownership in general we are less clear about the process and outcomes of multiple home ownership in China. This paper examines the patterns of and driving forces for multiple home ownership, and explores the implications for housing inequality in Chinese cities. While socio-economic factors appear critical in China as is the case in the West, we argue for an institutional and cultural perspective to better understand multiple home ownership in China. The empirical analyses using 2015 China Household Finance Survey show that households who received housing subsidies, have urban registration, experienced demolition and resettlement, have school age children attending key schools, and have sons are more likely to own multiple homes. By focusing on the institutional and cultural forces, this paper better explains the unprecedented high rate of multiple homeownership in Chinese cities, and demonstrates how various housing policies in China have unintentionally contributed to multiple homeownership and thus housing and wealth inequality.

Parental “love” on time: strength and timing in homeownership transfer

With substantial parental support, China’s 1980–1996 birth cohorts, termed “the millennials” in this paper, have achieved an extremely high homeownership rate. This study is an attempt to explain the strength and timing of intergenerational transfer of housing-related wealth in China. The 2011–2013 China Household Finance Survey shows three dominant types of housing-related wealth transfer with increasing strengths overtime: no substantial help from parents, partial help from parents to cover down payment for housing mortgage, and full help from parents in the form of homeownership transfer. Chinese parents are found to be impurely altruistic, son-preference oriented, and risk-avoiding in their decisions of transferring wealth to married children. Consequently, wealth transfers tend to benefit the less accomplished sons who have better parent–child relationships, fewer siblings, lower-risk marriages, and stronger commitment to repaying aging parents. Emotional altruism, relational ethnics, and rational calculations are the underlying logics that govern intergenerational relations in the Chinese family.

Housing Problems and Social Work Advocacy in a Home-Owning Society

This study examines housing problems in Singapore’s residualized social housing sector within a public housing system with a high rate of homeownership, and the challenges for social work practice and advocacy. Focus groups were conducted with 51 social workers from seven community-based Family Service Centers. They highlighted problems with access and stability in social housing, and pressures to purchase housing in a home-owning society. Social work interventions focused on the individual and encountered many challenges. While the social workers articulated the structural origins of housing problems, they did not see themselves having a direct role in policy advocacy. Possible reasons include constraints on resources and skills, the role that has been prescribed for social workers within the housing system, and the use of bureaucratic discretion which limits social workers’ policy knowledge and participation. In Singapore and other places where housing policy encourages homeownership over accessible social housing, advocacy must target both the policy sources of housing problems and the policy barriers to social work intervention. Future research can examine how the interaction of homeownership and social housing policies affect low-income people, and the way policy impositions and organizational factors combine to shape social work advocacy.

Mutual Benefit: How Vocational Training Programs Utilize Employer Engagement and Refugee Strengths to Facilitate Integration

Successful integration of newly arriving refugees requires the engagement of the receiving community and active facilitation of integration through provision of employment, access to housing, and protection of basic rights. Understanding how local entities effectively facilitate integration is important for policymakers and scholars interested in identifying best practices and replicating outcomes. This study examines the integration outcomes of refugees who participated in a vocational hospitality training program in Chicago, Illinois between 2008 and 2012. In particular, we explore the integration experiences—using employment, housing, and homeownership—of Bhutanese origin refugees who represented the largest country of origin group in the hospitality course. We find that the Bhutanese refugees who participated in the course had high rates of homeownership, stable employment, higher wages and experienced socioeconomic upward mobility—positive indicators of integration. In our analysis, we identify three reasons the program is successful in facilitating integration: a practice of selective enrollment, active employer engagement, and informed industry selection. Importantly, our findings suggest a positive benefit for employers in addition to refugee employees.

Economic precariousness: A new channel in the housing market cycle

AbstractDemographic and institutional elements, as important drivers of the housing market, should not be neglected because it is not only financial and monetary elements that matter in the case of the housing market. In this context, one relationship, which still remains unclear, is the relationship between the housing and the labour markets. Some research has been undertaken to support the hypothesis that high rates of homeownership lead to high unemployment via increases in the reservation wage. However, further research is needed to address the possible implications of the institutional settings of the labour market in the dynamics of the housing market. The aim of this paper is to bring some light on the link between both markets. In particular, this contribution explains how the housing cycle could be “amplified” via a new channel, that is, economic precariousness, which is closely related to job insecurity. Subsequently, we provide evidence in the case of five developed economies, Ireland, the Netherlands, Spain, the United Kingdom, and the United States, over the period 1985–2013.

Homebuyers, Liquidity Constraints and Private Market Solutions – European Best Practices

Even though the cost for owner-occupied homes fell sharply in the last years, homeownership rates in the EU remain sluggish. Sound economic policy would promote homeownership especially as rents are on the rise. Policies that facilitate schemes such as equity release options, housing saving plans and crowdlending seem promising. Low and temporary subsidies could jump-start private market solutions in those areas. Enabling many individuals to buy a home is sound, since individually-owned homes are a major driver of individual wealth accumulation. Moreover, higher homeownership rates can encourage growth.