Potential Homeowners Research Articles

Field diagnosis of the criteria for selecting affordable housing in less developed countries: evidence from homeowners and renters in Ghana

Purpose In the Global North, affordable housing has evolved and thrived, and it is now gaining traction in the Global South, where governments have been vocal supporters of the concept. Therefore, this paper aims to investigate the important criteria for selecting affordable housing units in Ghana. Design/methodology/approach A quantitative research approach was used, and a survey was administered to the residents. The data was analysed using both descriptive and inferential statistics. The relative importance index technique was used to rank the important criteria, and the EFA technique was used to create a taxonomy system for the criteria. Findings The hierarchical ranking of the most significant criteria for selecting affordable housing includes community safety, waste management and access to good-quality education. Furthermore, the important criteria for selecting affordable housing are classified into two groups, namely, “sustainability criteria” and “housing demand and supply and social service provision”. Research limitations/implications This study has implications for the real estate industry and construction stakeholders, as this will inform decision-making in terms of the design of affordable housing and the suitability of the location for the development. Originality/value These findings provide a baseline to support potential homeowners and tenants in their quest to select affordable housing. Furthermore, these findings will aid future longitudinal research into the indicators or criteria for selecting suitable locations for the development of low- and middle-income housing.

SHOW APARTMENTS AS ‘AESTHETIC TRAPS’: RISK, ENCHANTMENT AND ILLUSORY HOMES IN LONDON’S OLYMPIC PARK

This article offers a new analysis of the ‘show apartment’ as a device to disguise the power imbalance between prospective buyers of new off-plan homes and the global network of institutions that drive property development and mortgage-finance industries. Applying Gell’s notion of the ‘aesthetic trap’ to an ethnographic account of show apartments in a new neighbourhood in London’s Olympic Park, the article demonstrates how show apartments are an illusory form at the apex of a process of risk and commodification that disguises and normalises the risks to which potential homeowners are exposed.

Can people on low incomes access affordable housing loans in urban Africa and Asia? Examples of innovative housing finance models from Reall’s global network

While delivering decent, affordable housing at scale is essential to global sustainable development, one formidable blockage is a lack of accessible housing finance for end users. People on low incomes have been perceived by lenders as high risk. They are excluded from financial systems and are forced to self-build using informal credit at exorbitant rates. This article engages with this problem, discussing practical examples and potential ways forward. It does so through case studies of models from Reall (a UK-based international development organization and social enterprise that promotes affordable homes) and its partner organizations in India, the Philippines, Nepal, Mozambique and Pakistan. The article evaluates the strengths and limitations of these models, and their potential for scaling up. Reall’s partners demonstrate that decent houses can be delivered at a cost that is accessible for potential low-income homeowners, while proving the viability of lending to borrowers in the bottom of the income pyramid. This is essential for demonstrating the commercial viability and impactful investment opportunity represented by affordable housing in urban Africa and Asia.

INTEGRATING EARTHEN BUILDING MATERIALS AND METHODS INTO MAINSTREAM CONSTRUCTION

ABSTRACTEarthen Building Materials and Methods (EBMM) exhibit excellent environmental, health, indoor air quality and affordability benefits. Despite these advantages, EBMM are not yet broadly implemented in mainstream construction. The main barriers and gaps to implementing earthen construction are analyzed through 126 survey responses and 10 in-depth interviews of a range of experts and end-users, and possible solutions to overcoming these barriers are presented. Specifically, the research indicates that according to earthen construction experts and potential homeowners, inability or difficulty in obtaining building permits is the strongest barrier to implementation. Additionally, existing technical data and environmental assessments must be synthesized and enumerated in order to support decision makers in advancing earthen building policy.

A comparative analysis of financial affordability in Islamic home financing instrumentsin Malaysia

Purpose This study aims to compare and contrast the financial affordability of Islamic home financing instruments such as bay’ bithaman ajil and musharakah mutanaqisah (MM) offered by various home financing institutions in Malaysia. Design/methodology/approach Mathematical simulations were carried out in examining the financial affordability (or lack thereof) of various Islamic home financing by both Islamic commercial banks (ICB) and financial cooperatives (FC). Findings This study has shown that MM by FC is a workable, more financially affordable option to potential homeowners. Unlike ICB, MM by FC uses rental rates as a benchmarking tool because of its inherent nature of flexibility. Research limitations/implications MM by FC has the potential to reduce the cost of home acquisition (purchase affordability) and the amount of monthly installments (repayment affordability) of homeowners in Malaysia. Originality/value This study shows the financial implication of unaffordable Islamic home financing instruments may have on the Malaysian households, which were derived from using official data from various government agencies.

Empowering potential home owners: The UK should have a ‘small housing’ presumption

The essay presents Small Houses (SH) as a potential solution to the British housing crisis. The author argues that with a more permissive regulatory framework, people can find solutions in their reach to cope with the housing crisis.

The Tax System Should Be Neutral with Respect to Homeownership

In a stylized, parliamentary-style debate, Neil H. Buchanan makes the argument that the tax system should not provide incentives for citizens to own rather than rent their homes. The policy goal is unsupported by evidence of economic or social gains due to home ownership, and even if it were, it is not at all clear that the subsidies' incidence falls on potential homeowners. In addition, ownership carries enormous investment risks that would never be tolerated for any other type of asset and that can destroy a family that sees the value of its house collapse for reasons beyond their control. At the very least, the tax system should not encourage such dangerous risk-taking.

International Real Estate Review

A special type of spatial dependence model has been developed for the valuation of residential property by using a Bayesian approach which takes into account the unique attributes of Hong Kong property. Inspired by an approach that bases transactions on nearest neighbor estimation, the current model has fine-tuned the spatial dependence method of deriving value from the transactions of the real estate closest in proximity by factoring in differences in structural and auxiliary attributes for more precise property valuation. The model is established on a dataset that covers all residential real estate transactions in a new town in Hong Kong during a given period of time. This model excels other valuation methods with its unique reference to attribute differences, which may impact the valuation results of properties in close vicinity. With this calibration method, we hope to improve the accuracy of real estate appraisals, thus enabling potential homeowners, lenders and investors to make better informed decisions.

Gap analysis of green features in condominiums between potential homeowners and real estate agents

Purpose The building sector is one of the main contributors to carbon dioxide emissions in Singapore. Over 90 per cent of life-cycle carbon emissions are due to the operations phase of buildings, and 90 to 98 per cent of the building cost is associated with operation, maintenance and personnel costs. Hence, occupants have a major role in achieving environmental sustainability objectives. This study aims to understand the awareness level of potential homeowners and real estate agents concerning environmental sustainability issues in the built environment, to identify the types of green features required by potential homeowners and to understand real estate agents’ perceptions of the types of green features required by the homeowners in a green condominium. Design/methodology/approach The features of the Green Mark (GM)-awarded buildings, as well as the benefits derived by homeowners were identified from the literature. A survey of a group of potential homeowners and real estate agents was carried out in Singapore to analyse the gap, if any, between the potential homeowners’ needs and expectations and real estate agents’ perceptions of these needs and expectations with respect to the green features in the homes. Findings The results indicate that potential homeowners are more aware of environmental sustainability issues in the built environment than are real estate agents; potential homeowners seem to be more supportive of environmentally sustainable development than the real estate agents are aware of, despite the fact that the price of the apartment remains an important deciding factor; and potential homeowners are more concerned about the ease of maintaining green homes and paying greater attention to green features in the areas most heavily promoted by the government. However, green features do not constitute the main considerations of potential homeowners when making the decision to buy a green home. Research limitations/implications To close the gaps identified in the analysis, recommendations are suggested, including having public education and awareness campaigns to emphasize the long-term energy savings of green homes, conducting GM courses for real estate agents and involving real estate agents in the developers’ project consultancy team. Originality/value As there has been no prior research in this area, this study serves to provide fresh perspectives on how developers can better select the types of green features to be included in the green homes, so as to meet the potential homeowners’ needs and expectations and, at the same time, balance mandatory GM requirements with such demands. Choosing the right type of green features to incorporate in a residential development for homeowners to utilize increases the owners’ satisfaction level and allows them to reap the intended benefits of green features.

Determinants of intention of using mortgage in financing home ownership in Bauchi, Nigeria

Purpose This paper aims to evaluate the bane of home ownership in Nigeria through mortgage financing by examining the determinants of intention of using mortgage in financing home ownership. Design/methodology/approach The paper adopted a survey quantitative research design. A total of 235 valid questionnaires randomly distributed were retrieved from 300 potential homeowners who were the sample of the research. Partial least squares-structural equation modeling was used for data analysis and hypotheses testing. Findings The findings revealed that religious perception on mortgage was the most significant determinant of intention of using mortgage in financing home-ownership. Subjective norms and perceived behavioral control also have significant effect on intention of using mortgage financing. However, attitude and familiarity/knowledge of mortgage were found not to have a significant effect on intention of using mortgage financing. The determinants cumulatively determined 77.6 per cent (R2 = 0.776) of the variance in intention of using mortgage in financing home ownership. Practical implications The research contributed to knowledge and has practical implications to policy makers, mortgage institutions, investors and the society. Originality/value The paper uniquely explores the bane of home-ownership through mortgage financing by examining potential home-owners’ intention of using mortgage financing. To authors’ knowledge, this is the first paper to evaluate intention of using mortgage financing, at least in Nigeria.

Literary Festival Tourism in Montserrat

BackgroundRESEARCHERS HAVE DOCUMENTED THE RAPID TRANSFORMATION of the economy of the British Overseas Territory of Montserrat from agriculture in the 1950s to an emerging services sector including construction and in the 1960s.1 These developments created an environment that encouraged the introduction and growth of residential tourism.2 Residential tourists are those persons who live abroad but own homes on Montserrat.William H. Bramble, union leader and champion of the working classes, became a member of the Legislative Council in 1952. On assuming office, he concentrated on dismantling the sharecropping or metayage system which he felt exploited the labourers by not adequately compensating them for their work on the estates. This resulted in a movement away from agriculture in general, and cotton production in particular, and many estates fell idle. Alan Gunne-Jones notes the dramatic decline in the number of agricultural workers from a high of 4,030 in 1946 to 1,859 by 1960.3 Bramble became Montserrat's first Chief Minister in 1961, and his development strategy of facilitating foreign investment encouraged real estate speculators from North America to purchase many of the idle estates, particularly those along the west coast, which were then subdivided into serviced lots. These were subsequently marketed to North Americans who wanted either winter or retirement homes in an idyllic tropical setting. This led to a building boom in Montserrat and other infrastructural developments.Between 1960 and 1970, over five thousand acres of former estate lands were transferred from planters to development companies. Three real estate development companies directly involved in the development and promotion of residential purchased most of this land.4 The real estate investors persuaded the owners of the lone hotel then in existence, the Coconut Hill Hotel, to develop a resort hotel where potential homeowners would be able to stay. The Vue Pointe Hotel was opened in 1961. The following year, the Emerald Isle Hotel, another local investment initiative, was opened. These developments established the role of resort as an adjunct to residential on the island.The Montserrat Report for the Years 1963 and 1964 mentions the opening of the golf course and goes on to highlight that tourism also did much to assist in improving the economy of the island and its expansion was so rapid that consideration was being given to the appointment of a full-time Secretary to the Tourist Board.5 Only one house geared at the residential tourist market was built in 1963, but by 1966, there were forty-three occupied dwellings. By 1968, the number had risen to 150.6The banking business also boomed. The single commercial banking institution on the island, the Royal Bank of Canada (there since 1917), constructed a new building, opened in 1965, in recognition of the need to expand to handle the burgeoning services sector. Barclays Bank International opened its Montserrat branch in 1965. One year later, the Montserrat Building Society, with a mix of local and foreign shareholders, opened its doors for business.With the presence of residential tourists on the island came the need for other services. Interestingly, some of the new homeowners set up businesses to meet these needs. According to Gunne-Jones,Connie from Pennsylvania opened up Connie's Beauty Shop; Ernst Herman, an importer from Boston, established the Empire Shop which stocked French, German and Italian wines (and eventually included books in its inventory) and the Reierstads from Hong Kong opened two stores stocking jewels and furniture from Barbados. Glover & Mitchell (Mont) Ltd, a British grocer also opened a branch in Montserrat, and Dehaven Butterworth from New Jersey opened a soft-freeze ice cream shop.7Residential encouraged the development of ancillary services, which provided jobs for Montserratians and brought the island out of abject poverty and persistent underdevelopment. …

Do Product Bans Help Consumers? Questioning the Economic Foundations of Dodd-Frank Mortgage Regulation

The system of residential mortgage contact regulation enacted by the 2010 Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 has been justified as necessary to prevent lenders from exploiting consumer misperception and impatience through the sale of complex mortgage contracts with back-loaded or postponed charges, fees and penalties. Among other things, Dodd Frank creates a regulatory regime under which complex mortgages are penalized, amounting to de facto regulatory restrictions on such contracts. While behavioral law and economics scholars and regulatory practitioners have criticized complex mortgages as exploiting consumer misperception and impatience, such scholars and practitioners have neither advocated nor rigorously analyzed the costs of Dodd Frank style contract restrictions. Drawing on a large body of both theoretical and empirical work in neoclassical (rather than behavioral) financial economics, this article argues that while some consumers undoubtedly did fail to understand such complex mortgages, the terms of those mortgages had a solid economic rationale and made welfare-increasing mortgage credit available to consumers when it otherwise would not have been available. By severely discouraging complex mortgages from being written, Dodd Frank and regulations promulgated thereunder by the Consumer Financial Protection Bureau have priced out of the mortgage market entire groups of potential homeowners – including younger people, minorities and the self-employed. Welfare losses to such people from restricting contractual freedom are very real, and must be balanced against the benefits to those consumers who are arguably protected against ex ante undesirable mortgage contracts and to others in society arguably harmed when mortgages default. A policy of minimizing such harms by speeding and lowering the cost of recovery from mortgage contract failure is argued to be superior to policies, such as Dodd Frank’s mortgage contract restrictions, designed to prevent such failures by mandating or manipulating private contractual choice.

The social symbolism of water-conserving landscaping

Three studies examined the symbolic and self-presentational meaning of low-water-use residential landscaping in a desert city in the southwestern United States. We hypothesized that owners' water-intensive or water-conserving landscape choices would be seen to convey very different characteristics. Data indicated that these two types of residential landscapes led to substantially different attributions about homeowners and also that potential homeowners could use landscapes to convey an array of characteristics to a social audience. In general, water-intensive landscapes led to more positive attributions than did water-conserving landscapes. The results support the idea that landscaping choice may be guided by self-presentational considerations, and that such considerations might influence the adoption of high- or low-water-use landscapes.

Trying Not to Get Burned: Understanding Homeowners’ Wildfire Risk–Mitigation Behaviors

Three causes have been identified for the spiraling cost of wildfire suppression in the United States: climate change, fuel accumulation from past wildfire suppression, and development in fire-prone areas. Because little is likely to be performed to halt the effects of climate on wildfire risk, and because fuel-management budgets cannot keep pace with fuel accumulation let alone reverse it, changing the behaviors of existing and potential homeowners in fire-prone areas is the most promising approach to decreasing the cost of suppressing wildfires in the wildland-urban interface and increasing the odds of homes surviving wildfire events. Wildfire education efforts encourage homeowners to manage their property to decrease wildfire risk. Such programs may be more effective with a better understanding of the factors related to homeowners' decisions to undertake wildfire risk-reduction actions. In this study, we measured whether homeowners had implemented 12 wildfire risk-mitigation measures in 2 Colorado Front Range counties. We found that wildfire information received from local volunteer fire departments and county wildfire specialists, as well as talking with neighbors about wildfire, were positively associated with higher levels of mitigation. Firsthand experience in the form of preparing for or undertaking an evacuation was also associated with a higher level of mitigation. Finally, homeowners who perceived higher levels of wildfire risk on their property had undertaken higher levels of wildfire-risk mitigation on their property.

Effectiveness of educational tools for hurricane resilience in homes

PurposeIn the disaster mitigation community, one of the most important tasks is that of information transfer prior to, and following natural disasters. The purpose of this research project was to increase the understanding of key aspects (such as attractiveness and educational value) that influence the utility and effectiveness of educational media tools for home resilience during hurricanes.Design/methodology/approachA total of three types of educational media were developed – pulp board coasters, tri‐fold pamphlets, and a web hosted video. The contents of these media were developed based on data from federal agencies, as well as scholarly articles and technical reports to form an inclusive body of information. Several focus groups of homeowners and potential homeowners were held to evaluate participant's preference of these three media tools with regards to their usefulness for making homes safer during natural disasters, specifically during wind and wind‐driven rain events (e.g. hurricanes).FindingsAnalysis of the focus groups indicate that media use (based on disaster prevention home resilience practices) is highly dependent on the target audience or the stakeholder group (e.g. consumers look for different information content as compared to the builders). While all three media were indicated by the participants to have merit, the pamphlet was preferred aesthetically and was most likely to be used by homeowners. In addition, the study found that the usefulness of the tools depends on the ease of understanding and implementation of the best practices and ease of access to the tools (targeted location for each media).Research limitations/implicationsThe findings of the study have implications for the entire disaster educational community. Although the findings are mostly qualitative and the small sample used in the focus groups limits the generalize ability to the entire population of the USA, nevertheless, future educational information and tools used should follow easy to understand language, be illustrated with examples and pictures, and be placed at convenient locations for homeowners to access.Originality/valueBy understanding how to better reach homeowners with information on home resilience, information can be more effectively disseminated to the public which allows for efficient use of tools as well as funds.

Meeting first-time buyers’ housing needs and preferences in greater Kuala Lumpur

High housing prices in Greater Kuala Lumpur have made it difficult for potential first-time homebuyers to own a house. As a result, affordable housing schemes were introduced recently to assist potential homeowners. The Malaysian government has launched many kinds of public low-cost housing schemes; however, many housing projects resulting from these schemes have turned into slums that do not provide a wholesome environment for families. To avoid building more slums and to provide more benefits for young buyers, the goal of this paper is to determine the correct housing attributes required for first-time homebuyers in the urban area. Three hundred questionnaires were distributed to young Malaysians in Greater Kuala Lumpur (KL), and 265 questionnaires were returned. The responses to the questionnaire revealed that accessibility and neighborhood environment play a role in the decision to own. It can also be observed that ecologically friendly homes that embrace sustainability are important considerations for prospective homebuyers.

Strategies for potential owners in Singapore to own environmentally sustainable homes

PurposeWith global climate change, it is increasingly necessary to develop the built environment in an environmentally sustainable way. The aim of this study is to investigate the strategies that are needed to enable potential owners to own environmentally sustainable homes. The specific objectives are to: determine the extent to which potential homeowners are willing to pay for homes that are environmentally sustainable; uncover the green features that potential homeowners are willing to pay for; and provide recommendations on how more green features can be incorporated in homes.Design/methodology/approachThe survey research method was adopted and data were collected using a specially designed structured questionnaire. Self‐administered questionnaires were distributed to randomly selected potential homeowners in Singapore.FindingsBased on the data received, the findings show that the majority of the respondents are willing to pay more to own an environmentally green building. However, they are very price sensitive and only willing to pay 1 percent more in upfront costs.Practical implicationsThe study found that the green features that potential homeowners are willing to pay relates to siting for natural ventilation, provision of greenery, and water conservation. It is concluded that the extent to which homeowners are willing to pay higher upfront costs is limited.Originality/valueThe research provides several recommendations on how to enable more green features to be incorporated to homes owned by price sensitive individuals.

Momentum in Residential Real Estate

This paper examines whether there is return momentum in residential real estate in the U.S. Case and Shiller (American economic review 79(1):128–137, 1989) document evidence of positive return correlation in four U.S. cities. Similar to Jegadeesh and Titman’s (Journal of finance 56:699–720, 1993) stock market momentum paper, we construct long-short zero cost investment portfolios from more than 380 metropolitan areas based on their lagged returns. Our results show that momentum of returns in the U.S. residential housing is statistically significant and economically meaningful during our 1983 to 2008 sample period. On average, zero cost investment portfolios that buy past winning housing markets and short sell past losing markets earn up to 8.92% annually. Our results are robust to different sub-periods and more pronounced in the Northeast and West regions. While zero cost portfolios of residential real estate indices is not a tradable strategy, the implications of our results can be useful for builders, potential home owners, mortgage originators and traders of real estate options.

Merit-Based Scholarship ``Over-Awards'' and Home Prices

Some Georgia school systems award more HOPE scholarships than their academic achievement predicts, creating a geographically determined benefit that will be compounded into local real estate values. Using a two-stage regression methodology, we test to see if these scholarship ``over-awards'' are capitalized into local home prices. Our evidence supports the hypothesis. We argue that potential homeowners view HOPE eligibility percentages as an indicator of access to state resources, and this access is capitalized into home prices.

Mortgage Originations: 2000-2006

Views expressed do not necessarily reflect official positions of the Federal Reserve System. The Freddie Mac Primary Mortgage Market Survey indicates that the interest rate on commitments for 30-year fixed-rate mortgages declined from a peak of 8.52 percent in May 2000 to 5.23 percent in June 2003 (Figure 1). A sharp decline in interest rates typically leads to increased demand for mortgage originations: First, potential homeowners seek to take advantage of the low rate to purchase a home. Second, existing mortgage holders are keen to refinance their mortgages at the lower interest rate. Mortgage lenders were able to meet this increased demand because of a low cost of funds during this time period, thereby resulting in a steady increase in total mortgage originations. According to the Mortgage Bankers Association, the dollar value of total mortgage originations for 1to 4-family homes steadily increased from $238 billion in 2000:Q1 to roughly $1,200 billion in 2003:Q3 (Figure 1). If this growth in originations reflects the decline in the interest rate, then mortgage originations might be expected to decline when the contract rate increases. Indeed, mortgage originations did decline when contract rates rose after 2003. However, as Figure 1 shows, the level of originations continued to remain higher on average than pre-2003 levels. Why? Two reasons: First, interest rates in the post-2003 period remain below the high levels attained in the pre2003 era. Second, there was a change in the composition of originations, with substantial growth in the nonprime segment affecting the overall market. Figure 2 shows the breakdown of mortgage originations by market segment. Prime mortgages include loans securitized by an “agency”—namely, Freddie Mac, Fannie Mae, and Ginnie Mae. Jumbo loans are prime mortgages but are for amounts exceeding agency-conforming limits. Non prime mortgages include both subprime and Alt-A markets. Subprime mortgages generally include loans to borrowers with incomplete or impaired credit histories, while Alt-A mortgages include loans to borrowers who usually have high credit scores but are unable or unwilling to document a stable income history or are buying second homes or properties for investment purposes.1 Figure 2 shows that an increase in agency mortgages is the major factor behind the growth in total mortgage originations between 2000 and 2003. However, prime originations declined sharply after 2003. The growth of originations after 2003 was sustained by the subprime and Alt-A segments of the mortgage market. —Rajdeep Sengupta and Yu Man Tam