Rental Tenure Research Articles

Unintended consequences: Local Housing Allowance meets the Right to Buy

Recent rapid expansion of the Private Rented Sector (PRS) is recognised but the extensive involvement of ex local authority stock in this new PRS is not. This paper uses existing literature to outline the commodification processes through which Right to Buy (RTB) housing enters the PRS. Other published research is used to estimate a likely range of council to PRS tenure change over 30 years of RTB in the UK. Then using detailed data matching, we present one local authority example at individual dwelling level across the whole stock to establish the true scale of this transfer from council housing to private rental. Finally, to stimulate debate about the revenue cost of this switch of rental tenures we speculate on the additional annual cost of Housing Benefit support to this ex RTB stock given that the PRS is invariably more expensive than council renting for equivalent dwellings. This may well be over £1bn per year. We conclude that UK government’s plans to expand the RTB scheme will simply increase revenue costs year on year for no discernable social or housing supply benefit.

Housing Restitution and Privatisation: Both Catalysts and Obstacles to the Formation of Private Rental Housing in the Czech Republic and Estonia

The return of property expropriated during the communist period to previous owners or to their descendants (property restitution) led to the quick emergence of a private rental sector in those post-communist countries that applied a physical form of property restitution soon after 1990. The Czech Republic and Estonia are examples of such countries. Within just a few years, as a result of property restitution, a private rental sector grew out of almost non-existence to become a significant part of the countries’ total housing stock. However, the character of this sector remained different from the private rental sector found in countries with advanced economies – especially owing to specific rent regulation, tenant protection and, albeit indirectly, public housing privatisation. This article analyses and compares the genesis of private rental tenure in the Czech Republic and Estonia. Its main goal is to demonstrate how state regulations and interventions have influenced tenure choice, the formation of social norms, and thus the permanent perception of private renting. In both transition countries private renting gradually acquired the character of a transitional and residual form of housing. State interventions early on in the transition were probably the most significant factors behind the fact that private renting did not establish itself as a real tenure alternative to owner-occupied housing.

Competition between social and market renting: a theoretical application of the structure-conduct-performance paradigm.

Housing policies in many countries have become more market orientated as the role of governments has shifted from the direct supply and funding of non-market housing towards the role of a regulator and facilitator. Central to this development is the notion that providers of social housing have to become more competitive. Arguably, these social housing changes have important implications for the relationship between social and market rented housing and thus the rental market as a whole. Conceptual frameworks that facilitate the understanding of this relationship are sparse commodities. This paper seeks to develop a theoretical framework that can be used to shed light on the conditions, processes, and effects of the new relation between the two rental tenures from an economic competition viewpoint. Therefore, this paper adapts the structure-conduct-performance paradigm to rented housing and discusses the framework’s applicability and value on a theoretical level.

Rental Tenure Type and MSA-Level House Price Recovery from the Great Recession

Most United States MSAs saw their house prices plummet during the recent Great Recession. While many are only beginning to pull away from their lowest house prices in recent history, other MSAs are already well on their way to house price recovery. We believe that one attribute which separates these early winners is their rental tenure. MSAs with higher rental tenure possess a type of occupancy liquidity, allowing these areas more flexibility in their housing market which provides the opportunity for quicker house price recovery. We find an economically and statistically significant relationship between increased rental tenure and house price recovery for 2006 through 2010. These findings are amplified for both high growth and low density areas, and yet further enlarged for areas that are considered both high growth and low density. Additionally, we uncover a highly consistent, negative effect of population growth on house price recovery throughout our analysis.

Market Conditions and Housing Choices: A Comparison of Homeownership Across Three Decades

This article uses information on out‐of‐pocket housing cost and house price appreciation along with the geo‐coded version of the Panel Study of Income Dynamics to consider the differences in the impact of these and other variables on the tenure choices of sample households across three time periods, the 1970s, the 1980s and the 1990s. Specifically, an extended continuous time probability model is used to examine households' transitions from renting to owning and subsequent possible transitions either back to rental tenure or to another owned home during our three observation periods. Coefficient estimates show that financial variables such as house price appreciation and out‐of‐pocket housing cost play an important role in determining all the transitions. In addition, the analysis demonstrates the interesting result that the cumulative likelihoods of homeownership derived from the model are consistently lower than the probabilities of an initial transition to homeownership from rental tenure during the observation period. Finally, the magnitude and timing of the impact on homeownership of a policy experiment that eliminates the mortgage interest deduction are shown to differ substantially across the three decades.

The Dynamics of Homeownership: Eliminating the Gap Between African American and White Households

This article uses a sample of young renters from the Panel Study of Income Dynamics and a continuous‐time econometric model to explore not only the initial tenure transition to first‐time homeownership, but also subsequent possible tenure transitions to a second owned home, back to rental tenure and, indirectly, to a second owned home from rental tenure. Once estimated, the predicted probabilities of these transitions are used to calculate the probability of homeownership at various times for households in the sample. These estimates are done separately for African Americans and whites for two different 11‐year time intervals, 1987–1997 and 1993–2003. A primary result is that if African American education, income, net wealth and savings behavior could be brought in line with that of white households the majority of the racial gap in homeownership could be eliminated in either time period.

Substitutability between Social and Market Renting in Four European Countries

Abstract This paper will set out the concept of a ‘gap’ between the social rented and market rented housing sector. This will be examined with respect to one aspect of competition between the two sectors in England, France, the Netherlands and Germany: substitutability. The analysis will involve an examination of the extent to which tenants can choose between the two sectors. The price-quality bundles of housing services as expressed by the characteristics of the accommodation, the property rights of the tenants, the allocation system and the housing allowances in the different countries will be compared. Competition measured in this way seems to be rather larger than smaller in the Netherlands and Germany and rather small in England. France's intermediate sector partly closes the gap between both rental tenures.

Private rental housing in Tanzania — a private matter?

Secure tenure, the citizenship rights of slum dwellers, and community participation are key words in the international discourse on housing policy. This paper reports the results from a study of private rental housing and tenants in unplanned settlements in Mwanza City, Tanzania. It examines the tenants' position in Tanzanian housing policy discourse, considers government housing policy and private rental tenure practices, and explores how the discussion about secure tenure in urban areas is focused on the formalisation of land. In 2005, rental legislation was changed in Tanzania because it was thought to be overly protective of tenants. Since then, tenants in rental housing have been ignored in the national policy discourse, despite the quantitative importance of rental housing in metropolitan Tanzania. The government has concluded that home ownership is the norm in Tanzania, and it regards private rental tenure as a private matter. It does not monitor conditions in the private rental market. In this paper, I suggest that the urban housing situation in Tanzania will not improve until the government acknowledges private rental tenure, views the tenants as urban citizens, and then attends to their needs and interests. One way to start this process is to educate landlords and tenants about their rights and obligations under housing contracts. This would help to reduce the number of conflicts in rental housing and bring about a more secure tenure situation for many residents.

Implications of the Rental Market for UK Housing Policy

The deregulation of the UK rental market since 1989 has made it an important component of the private housing sector. I extend the standard housing model by adding a substitute rental good to the inverted demand equation. Rents are modeled in a similar fashion, and an incomplete information model is used to analyse landlord behaviour in adjusting rental stocks. Rental data is obtained by enhancing the methodology of Weeken (2004) to reduce reliance on the inappropriate RPI rent index. Error correction models are used to test this theoretical structure; however due to lack of data in markets where adjustment is likely to be extremely slow the models are not particularly good empirical fits. Nevertheless simulation shows that under a wide range of assumptions adding the rental tenure increases the level of house building required to achieve a target level of house price growth. The views expressed in this paper are the authors own and do not reflect their employers.

Racial gaps in the transition to first-time homeownership: The role of residential location

Evidence suggests that African Americans wait longer to transition into first-time homeownership than white households with similar endowments. This paper relies on data from the Panel Study of Income Dynamics (PSID) to examine the contribution of residential location toward the black–white gap in first-time homeownership transitions. For a sample of young renters who first left their parents' home during the period 1978 through 1987, I estimate continuous time duration models that explain racial gaps in rental tenure durations prior to first-time homeownership as a function of individual, household, and location-specific covariates. I find that while several residential location characteristics, particularly those associated with the supply of affordable owner-occupied housing, impinge upon racial gaps in first-time homeownership transitions, most of the racial gap in homeownership transitions would be eliminated if blacks and whites had similar individual and household characteristics.

The changing demography of multifamily rental housing

The residents of multifamily rental housing are different from both homeowners and single‐family home renters, and these differences have implications for the housing market and for public policy. This article describes apartment residents today, discusses recent changes in their number and characteristics, projects their future growth and composition, and highlights business and policy implications of future changes. For purposes of business and public policy, a segmentation of apartment residents into three submarkets is useful: the “affordable” market serving low‐ and moderate‐income households, some of which receive government housing assistance; the “lifestyle apartment market” serving higher‐income adult households; and the substantial “middle market.” The number of apartment renters is likely to grow moderately over time. The combination of multifamily structure type and rental tenure form offers unique opportunities not only for provision of affordable housing but also for revitalization of downtown areas and balanced “smart” growth in suburban areas.

Rental Tenure in the Cities of Developing Countries

Rental Tenure in the Cities of Developing Countries

A Model of Rental Housing Choices in the Korean Market

The main purpose of this study is to propose and estimate a model of Korean rental housing choice using hierarchical logit analysis. The study focuses on the examination of how households choose their dwelling units in a complex rental housing market. The decision is viewed as a partial sequence process, beginning with the choice of rental housing tenure and finishing with a decision on the type of occupation. To examine an additional step in the urban spatial structure, hedonic price technique is incorporated into a hierarchical logit model. In addition, the separate effects of permanent and transitory components of measured income are examined through the instrumental variables method based on human capital theory. It is shown that the proposed model provides a potentially more useful method than another model, the multinomial logit, in analysing the Korean rental housing market.

Choice of Rental Housing in Korean Market: Alternative Approach

This study proposes an alternative Korean rental housing choice model, in which households choose their dwelling units using hierarchical logit analysis. The decision is viewed as a partial sequence process, beginning with the choice of rental housing tenure and finishing with a decision on the type of rental housing occupation. The study incorporates hedonic price technique into a hierarchical logit model in order to examine an additional step in the urban spatial structure. In addition, it examines separate effects of permanent and transitory components of measured income through the instrumental variable method based on human capital theory. For comparative purposes, a multinomial logit analysis is proposed.

Study on the Variety of House Sharing of the Rental Tenures in Korea

Study on the Variety of House Sharing of the Rental Tenures in Korea

The Impact of the Employment of the Wife on the Achievement of Home Ownership

A logistic regression analysis is used to assess the impact of the wife's income, wage rate, and hours worked on changing from rental tenure to home ownership among a subsample of husband‐wife house‐holds from the Panel Study of Income Dynamics. Age of the wife, education of the wife, family size, and residence in the Northeast are significant predictors of change in tenure status between 1979 and 1983; of the wife's employment variables tested, only the number of hours worked (a proxy for labor force commitment) is a significant predictor of the probability of changing from rental tenure to home ownership.

Litigation: Reports on recent cases

Critical housing studies have been slow to interrogate the role of low-income rental tenure in contemporary capitalism. Retaining insights of previous Marxian analyses, which insisted that housing is inextricably linked to the capitalist political economy, this essay sets off to revise the rental housing question: how might we explain the rising levels of rental housing insecurity - overindebtedness, evictions and homelessness - of impoverished households, who have been integrated into the financial system as renters and debtors? Viewing this question through an analytical-historical approach in which theoretical concepts are embedded in appropriate historical context, the paper reveals how monetized power relations involving landlords (public and private), creditors and multi-scalar state interventions (federal, municipal and district) play an integral, yet paradoxical, role in low-income rental housing insecurity. To develop this argument, I draw on the case of social rental housing in Neukölln - one of Berlin’s most impoverished boroughs - to demonstrate how monetized power relations and multi-scalar state interventions have produced and reproduced housing insecurity through a tri-nodal continuum marked by: (1) exploitation through rent and credit, (2) evictions and homelessness, and (3) erasures by invisiblizing the displaced.

Housing Policy and Alternative Housing Tenures: Some Scandinavian Examples

Two strategies for increasing tenant influence and decreasing the need for state housing subsidies are discussed: 1) conversion of rental dwellings into cooperatives or condominiums, and 2) changes in the content of rental tenure. Some Scandinavian examples are presented as a basis for discussion of the viability of the two strategies. The conversion strategy does increase tenant influence, but may cause a less equitable distribution of housing standards and costs. Changing the content of rental tenure gives relatively less influence to tenants, but guarantees access for all to high quality, cost-rent housing.