Owner-occupied Sector Research Articles

Do rent controls and other tenancy regulations affect new construction? Some answers from long-run historical evidence

The (re-)introduction of tenancy regulation in the form of rent controls, tenant protection or supply rationing is back on the agenda of policymakers in light of rent inflation in many global cities. While rent controls promise short-term relief, economists point to their negative long-run effects on new construction. This study presents new long-run data on both rent regulation and housing construction for 16 developed countries (1910–2016) and finds that more restrictive rental market legislation generally has a negative impact on both new housing construction and residential investment. This is especially true for strict rent controls and housing rationing measures in the post-1960 period. Tenancy security can on average also dampen construction activity. The negative effect is overall less significant and strong in magnitude than expected and may have been offset by exemptions for new construction, by compensating social housing construction and by a flight of new construction into the owner-occupied sector. Still, on average, rent controls came at the cost of less construction activity.

Constructing segmented rental housing indices: evidence from Beijing, China

PurposeThis paper aims to construct rental housing indices and identify market segmentation for more effective property-management strategies.Design/methodology/approachThe hedonic model was employed to construct the rental indices. Using the k-means++ and REDCAP (Regionalisation with Dynamically Constrained Agglomerative Clustering and Partitioning) approaches, the authors conducted clustering analysis and identified different market segmentation. The empirical study relied on the database of 80,212 actual rental transactions in Beijing, China, spanning 2016–2018.FindingsRental housing market segmentation may distribute across administrative boundaries. Properly segmented indices could provide a better account for the heterogeneity and spatial continuity of rental housing and as well be crucial for effective property management.Research limitations/implicationsResidential rent might not only vary over space but also interplays with housing price. It would be worth studying how the rental market functions together with the owner-occupied sector in the future.Practical implicationsResidential rental indices are of great importance for policymakers to be able to evaluate housing policies and for property managers to implement competitive strategies in the rental market. Their constructions largely depend on the analysis of market segmentation, a trade-off between housing spatial heterogeneity and continuity.Originality/valueThis paper fills the gap in knowledge concerning segmented rental indices construction, particularly in China. The spatial constrained clustering approach (REDCAP) was also initially introduced to identify regionalised market segmentation due to its superior performance.

A systematic analysis of the spatial migration patterns and the linkages between market components in Greater Manchester, United Kingdom

PurposeThis paper aims to bring together research on housing market area, submarket and household migration into a systems approach that helps us gain a better understanding of the structure and dynamics of a housing market and identify housing problems for a large metropolitan area.Design/methodology/approachThe paper uses a geographic information system (GIS)-based method with simple quantitative techniques, including spatial analysis, location analysis, house price clustering and cross-tabulation. The analysis is based on migration data from the 2011 Census, house price data from the Land Registry in 2011 for Greater Manchester at the ward level and the output areas level.FindingsThe results show that different submarkets and housing market areas had different patterns of spatial migration and connections with other areas. Through a systematic analysis of migration and house price in combination, it also found a close connection between destination submarkets and the ages of migrants and identified specific problematic patterns for a large metropolitan area.Research limitations/implicationsThe interactions between the owner-occupied sector and the social and private rented sectors are arguably an important omission from the analysis. Also, it is acknowledged that clustering ward units based on price differentials is subject to distortions in terms of specification, size and shape. Moreover, the use of the large samples may result in very small p-values, leading to the problem of the rejection of the predefined hypothesis.Practical implicationsA systematic analysis of migration and house price in combination may be used to gain a better understanding of the housing market dynamics and identify housing problems systematically for a large metropolitan. It may help to identify low-demand areas, high-demand areas and assist planners with decisions in allocating suitable land for new housing constructions.Social implicationsThe GIS-based method introduced in the paper could be considered as an effective approach to provide a better basis for determining policy interventions and public investment designed to allocate land resources effectively and improve transport systems to change existing problematic migration patterns.Originality/valueThis paper fills a gap in the international literature in relation to adopting a systems approach that analyses migration and house price data sets in combination to systematically explore migration patterns and linkages and identify housing problems for a large metropolitan area. This systems approach can be applied in any metropolitan area where migration and house price data are available.

Housing tenure and neighbourhood satisfaction in transitional urban China: Evidence from Changchun

Housing tenure is widely accepted as an influential factor on neighbourhood satisfaction in developed countries, where tenure choices are largely dichotomous (homeowner or renter) and are subject to market forces. However, in urban China, housing reforms in 1998 have allowed the intersection of both market and institutional forces and created diverse tenure types in the owner-occupied sector, which may have mixed effects on individuals' neighbourhood satisfaction. This study therefore examined neighbourhood satisfaction among owners of four housing tenure types—commodity housing, privatized danwei housing, Economic and Comfortable Housing, and resettlement housing—in Changchun, China. Data for this study came from a city-wide sample of 1,722 homeowners living in 93 neighbourhoods in Changchun and from the Census. The findings show that housing tenure type significantly affects neighbourhood satisfaction. Commodity housing owners are the most satisfied with the determinants of neighbourhood satisfaction resembling those in western countries. However, among the other three government-subsidized homeowner groups, neighbourhood satisfaction levels are affected, although to different extents, by institutional forces. Nuanced results suggest that institutional forces can promote certain owner groups’ neighbourhood satisfaction.

Does Social Policy through Rent Controls Inhibit New Construction? Some Answers from Long-Run Historical Evidence

The (re-)introduction of rent regulation in the form of rent controls, tenant protection or supply rationing is back on the agenda of policymakers in light of rent inflation in many global cities. While rent control as social policy promises short-term relief, economists point to their negative long-run effects on new construction. This paper present long-run data on both rent regulation and housing construction for 16 developed countries (1910-2017) and 44 developing countries since the 1980s to confirm the economists’ view generally, albeit with certain reservations. The negative effect of regulation can be offset by exemptions for new construction, by compensating government construction and by a flight of new construction into the owner-occupied sector. The overall magnitude of the effect is therefore not as high as expected and shows non-linearities. But, although rent control is usually introduced with good social-policy intentions, it generally risks to crowd out its object of regulation through inhibiting new construction.

Changing patterns in residential preferences for urban or suburban living of city dwellers

Many cities in the western world have recovered from the urban crisis after the industrialization period and have become attractive places to live and work. It seems obvious to conclude that the preference for urban living has increased. But is this really the case? The (increased) preference for urban living may also be driven by demographic, socio-economic and socio-cultural changes in the population rather than by a structural change in residential preferences. In depth analysis of the stated residential preferences in Amsterdam in the period 2003–2017 indeed show that residential preferences are quite stable. The analysis does show a small decline in the preference for moving at all: slightly more households in Amsterdam prefer to stay put. This can mainly be explained by the growing owner-occupied sector. When households want to move, their preference for moving to the region is fairly stable. Only families with older children seem to have become more urban orientated. The education level is one of the key variables that explains the stated preference for moving to the region of Amsterdam: the higher educated more often prefer to stay. Their share in the population has increased and this does influence the residential preference at an aggregate level towards a more urban orientation.

Analysing the Energy Efficiency Renovation Rates in the Dutch Residential Sector

The housing stock has a major share in energy consumption and CO2emissions in the Netherlands. CO2emissions increased 2.5% year-on-year in the first quarter of 2018. Higher CO2emissions were principally due to raised gas consumption for heating in the residential and service sector1. Energy efficiency renovations can contribute considerably in reducing energy consumption and achieving the EU and national energy efficiency targets. However, based on recent research2, the renovation rates in the Dutch social housing sector are not adequate to achieve the energy efficiency targets. Moreover, the deep renovation rates are almost negligible in this sector. The Dutch housing stock consists of the owner-occupied sector and rental sector (social housing and private rental houses) with shares equal to 69.4% and 30.6%, respectively. Considering the major share of the housing sector in energy consumption, the aim of the current study is to evaluate and compare the renovation rates in these sectors and the potential contribution of each one in achieving the energy efficiency targets. By renovation rate, we mean the percentage changes in the number of the identical houses moving from one energy label to the more efficient energy labels. The Netherlands Enterprise Agency (RVO) and Statistics Netherlands (CBS) databases are used to conduct the statistical analysis. The results show that the renovation rates are almost the same in these three sectors, despite the expectation of much higher renovation rates in the social housing sector.

Risks in home-ownership: a perspective on the Netherlands

Purpose: Risk in home-ownership from mortgage providers’ perspectives within the euro zone has received more attention than individual home owner’s perspectives in the literature following the financial crisis in 2007/2008. The purpose of this paper is to explore the risk factors in home-ownership from the individual household’s perspectives within the owner-occupied housing sector of the Netherlands. Design/methodology/approach: The paper adopted a broader review of extant literature on the different concepts and views on risk in home-ownership. These concepts are unified into a framework that enhances our understanding of the perceived sophisticated risk within the owner-occupied sector in the Netherlands. Findings: From the perspective of the home owner, two main types of risks were identified: mortgage default and property price risk. The paper has unearthed a quantum number of factors which underline the above risks. The mortgage default risk factors include the initial amount of mortgage loan taken out, the future housing expenses and the income development of the owner-occupier. Family disintegration is also identified as one of the main causes of mortgage default in the Netherlands. Property price risk is influenced by income, interest rates and conditions in the social and private rental sectors. Research limitations/implications: Findings of the paper are based on review of the extant literature in the context of the Dutch housing market. Possible rigorous situational analysis using other tools are recommended for further research. Originality/value: This paper contributes to the much needed body of knowledge in the owner-occupied sector and provides a better understanding of risk in home ownership from the individual perspectives.

What do housing wealth and tenure have to do with it? Changes in wellbeing of men and women after divorce using Australian panel data

Homeownership, as a way to build up housing wealth, is believed to play an increasingly important role in terms of providing welfare to citizens. However, homeownership does not always act as a nest-egg; it can be a source of financial anxiety as well. In this paper we investigate how homeownership and housing wealth impact on the relationship between divorce and subjective wellbeing (life satisfaction, happiness, financial satisfaction). Using longitudinal data for Australia we find that homeowners are more negatively affected with respect to wellbeing by divorce than tenants, amongst others because the owned house becomes a financial burden. We further find that gender moderates the impact of homeownership and tenure change upon divorce on wellbeing. When women move from an owned to a rented house, divorce has a smaller negative effect on happiness and financial satisfaction than when women stay in the owned house. For men, staying in the owned house or moving within the owner-occupied sector increases happiness, but moving to the rental sector from the owned house increases financial satisfaction. Furthermore, for men, housing wealth mitigates financial stress when remaining in an owner-occupied house after divorce. We conclude that the potential role of homeownership as a welfare resource – in this case for subjective well-being – seems rather limited to those who already possess other resources (e.g. financial security) and therefore cannot be expected to substitute more traditional forms of welfare.

The dynamisation and subsequent vulnerability of the Dutch owner-occupied sector. An analysis of 1986-2012

This article investigates the backgrounds to changing residential mobility of Dutch owner-occupiers from 1986-2006 and during the 2008-2018 crisis. The Oaxaca-Blinder decomposition is used to disentangle the main factors at work. Households of all age groups and family types have become more mobile in 1986-2006, with the highest increase amongst the youngest age groups. Nonetheless, ageing of owner-occupiers has dampened the growth between 1986 and 2006, because older owner-occupiers usually move less frequently than younger age groups. Had this ageing process not taken place, the overall increase in mobility would have been much higher (about 3.5 percentage points) than the 1.4 percentage point observed. The overall compositional effect remains negative despite a shift from traditional families with children towards more singles and couples without children, who are more mobile. During the crisis of 2008-2012, high residential mobility rates amongst the young age groups took a sharp negative turn. Combined with their increased presence among owner-occupiers, this implies that the contemporary Dutch owner occupied sector is more vulnerable to economic shocks.

Risks in home-ownership

Purpose: Risk in home-ownership from mortgage providers’ perspectives within the euro zone has received more attention than individual home owner’s perspectives in the literature following the financial crisis in 2007/2008. The purpose of this paper is to explore the risk factors in home-ownership from the individual household’s perspectives within the owner-occupied housing sector of the Netherlands. Design/methodology/approach: The paper adopted a broader review of extant literature on the different concepts and views on risk in home-ownership. These concepts are unified into a framework that enhances our understanding of the perceived sophisticated risk within the owner-occupied sector in the Netherlands. Findings: From the perspective of the home owner, two main types of risks were identified: mortgage default and property price risk. The paper has unearthed a quantum number of factors which underline the above risks. The mortgage default risk factors include the initial amount of mortgage loan taken out, the future housing expenses and the income development of the owner-occupier. Family disintegration is also identified as one of the main causes of mortgage default in the Netherlands. Property price risk is influenced by income, interest rates and conditions in the social and private rental sectors. Research limitations/implications: Findings of the paper are based on review of the extant literature in the context of the Dutch housing market. Possible rigorous situational analysis using other tools are recommended for further research. Originality/value: This paper contributes to the much needed body of knowledge in the owner-occupied sector and provides a better understanding of risk in home ownership from the individual perspectives.

Planning and best practice guidance: A route map to help householders with their energy saving retrofits

This paper presents the experience of delivering a local authority led, solid wall insulation focused energy efficiency scheme. The aims are to present the national and localised policy context in which the scheme was developed, and to identify the major challenges that have arisen during the delivery phase of the scheme. Four key themes are identified: planning consents and traditional construction; customer engagement and knowledge; industry transition; and national policy drivers. The examination of these key areas of challenge focuses on the issues for delivery at scale within the private owner-occupier sector. The following section considers Bristol City Council's solutions to improving customer experience and the industry's ability to improve its understanding of building physics to drive improvements in the quality of installations. The paper concludes by drawing together the challenges and solutions: making suggestions of improvements for energy literacy for customer engagement and empowerment; developing installer training and a kitemark, or industry standard, to drive quality in the industry; as well as suggestions on how a more holistic approach to energy retrofitting could deliver the former and see real savings for energy and CO2.

Individualisation and familisation in Japan's home-owning democracy

Japan's post-war housing system has been dominated by family-owned housing. However, the centrality of family home ownership has declined since the 1990s. Housing careers and family formation patterns have diverged leading to the re-organisation of boundaries separating owning and renting. Using Japan as a focus, this paper explores the role of individualisation and familisation in transforming homeowner societies. On one hand, the individualisation of younger generations in Japan has encouraged a notable increase in one-person households living in private rented housing. On the other hand, a growing number of young households have purchased houses with assistance from their parents. This has been interpreted as an intergenerational familisation of access to home ownership. There is also an increasing number of unmarried adults living in their parents’ homes, which reflects the individualisation of younger cohorts and simultaneously the familisation of adult children's early housing careers. Moreover, it has recently been pointed out that Japan's system of extended family households and the related practice of transferring family properties across generations, has not declined. This paper argues that individualisation and familisation are combining to reorganise the ‘edges’ of home ownership, by helping determine who can enter owner-occupied housing sectors, and who is excluded.

Selective mobility, segregation and neighbourhood effects

Selective mobility, segregation and neighbourhood effects

Selective mobility, segregation and neighbourhood effects

Selective mobility, segregation and neighbourhood effects

Selective mobility, segregation and neighbourhood effects

Selective mobility, segregation and neighbourhood effects

Market orientated housing policies and the position of middle-income groups in the Netherlands

As a result of the poor economic climate and neo-liberal policies, the welfare state in many European countries is becoming more residual and is directing its efforts at seriously deprived households. This development is affecting the middle-income groups, who enjoy less protection than before and are therefore forced to become more self-supporting. We can find a good illustration of this trend in the changing position of these groups on the Dutch housing market. The market orientated EU policies are denying middle-income households access to the social rented sector. Meantime, these households are already encountering accessibility problems in the owner-occupied sector due to the economic crisis and the tougher mortgage conditions set by the financial institutions. This paper describes the housing policy changes against this background and analyses the position of middle-income groups on the Dutch housing market.

Public mortgage guarantee: instrument to cope with impacts of the financial crisis on the owner-occupied housing market evidence from the Netherlands

The global credit crunch had a deep impact on the mortgage markets in Europe, including the Netherlands. When the credit crunch transformed into a debt crisis, this impact deepened. The impact of the credit crunch and the debt crisis (together: the global financial crisis) on the Dutch housing market is described here. The Dutch government started to react with a stimulating policy but since 2010 austerity measures have become dominant. The National Mortgage Guarantee (NHG) has been applied as an instrument to shelter home-owners against the hardship of the financial crisis. In this paper the role of National Mortgage Guarantee in the Netherlands is analysed. Particular emphasis is placed on the role of this guarantee as an instrument to cope with the impact of the financial crisis on the national owner-occupied housing market. The performance of NHG in 2010 is elaborated. The conclusion is that NHG has made the Dutch owner-occupied housing sector more resilient during the financial crisis.

Housing Pathway Divergence in Japan's Insecure Economy

The housing system in post-war Japan has consistently driven the growth of the owner-occupied housing sector, where many people have followed a conventional life-course in terms of ascending the housing ladder towards homeownership. Since the 1990s, however, a more insecure economy combined with the reorientation of housing and social policies has led to divergence in people's housing pathways. The conservative nature of public policy has largely been maintained, advantaging middle-class family households in accessing homeownership. However, in response to economic stagnation and within the context of pervasive neo-liberalism, the government has moved sharply towards accentuating the role of the market in providing housing and mortgages. Neo-liberal policies have become more pronounced while conservative institutions have firmly been ingrained in Japan's post-war society. Conventional middle-class families, protected by conservative policies in moving up the housing ladder, have maintained their relatively advantageous positions in the market economy. Neo-liberal policy has especially affected the housing conditions of specific groups who have been beyond the protection of conservative institutions, i.e. unmarried individuals, low-income households and those in unstable employment. The combination of conservative and neo-liberal approaches in policy practices has thus had strong diverging effects on people's housing opportunities. This paper explores the fragmentation of housing paths in Japan's insecure economy with particular reference to transformations in housing and social policies.

Shifting East Asian Approaches to Home Ownership and the Housing Welfare Pillar

Despite diversity in market and policy frameworks, late twentieth century housing systems across industrialised economies in East Asia became increasingly focused on facilitating home ownership. Governments became characteristically interventionist in the housing sector, which was assumed to play broad economic, political and welfare roles. Despite the influence of the public sector, housing provision was largely commodified rather than de-commodified. Home ownership was perceived to enhance economic development, social solidarity and the asset base of family centred welfare provision. This view was bolstered by house price increases during an era of rapid economic growth. Expanding owner-occupied housing sectors ostensibly offset underdeveloped citizenship rights and public spending, and stimulated increases in middle-class home-owning households, who were provided an economic stake in ‘developmentalist’ government objectives. The Asian Economic Crisis of 1997/98 however, strongly impacted on property markets across the region leading to increasing divergence in approaches to home ownership and welfare provision. This paper examines housing systems and policy regimes in Japan, Singapore and Hong Kong to illustrate new strategies that have emerged in the twenty-first century that reflect diversifying orientations towards housing policies and property-based welfare.