Sustainability Of Homeownership Research Articles

Democratizing Islamic home financing and reimagining fractional homeownership model: a conceptual framework via big data and blockchain technology

PurposeThis paper aims to propose a model for democratization of Islamic home financing to tackle the issue of sustainability of homeownership affordability.Design/methodology/approachA conceptual framework and fractional equity model (FEM) are developed to incorporate big data analytics, artificial intelligence and blockchain technology in an ecosystem for affordability and sustainability of homeownership via the proposed financing model. In addition, the FEM adopts the simulation approach to show its validity in terms of liquidity when compared with traditional home financing. In this regard, this paper is focused on developing and demonstrating the feasibility of a new financing model, rather than testing specific hypotheses or relationships. This is to propose the democratization model for Islamic Home Financing that will not benefit the prospective home buyers without compromising the profitability of the financial institutions.FindingsThe findings indicate that the proposed end-to-end solution within the financing ecosystem can lead to more efficient matching market between the buyers and sellers of houses, reduced transaction costs, greater transparency and enhanced efficiency which in the end could lead to lower costs of owning homes and sustained financial resilience among house owners. The findings indicate that the FEM model is able to increase homeownership with more elements of liquidity, marketability and sustainability for homebuyers.Research limitations/implicationsThis research highlights the potential of big data and blockchain technology in democratizing Islamic home financing and evidence that the transfer of ownership is possible through tokenization. However, this will require a mature financing environment to adapt the technology for practical application.Practical implicationsThe model proposes a solution to propagate shared prosperity among stakeholders such as the house buyers/owners, sellers, investors as well the government agencies. The proposed FEM model provides alternative home financing that is more marketable, flexible and sustainable for households/buyers and financiers.Social implicationsIt is hoped that with the proposed financing ecosystem to promote affordability and sustainability of homeownership via big data analytics, artificial intelligence and blockchain technology can lead to greater financial resilience for homeowners which can then be translated to enhanced well-being, increased productivity and can further promote economic growth.Originality/valueThis research is a concept paper based on academic research and industry collaboration with a technology provider.

Does pre-purchase counseling help low-income buyers choose and sustain homeownership in socially mixed destination neighborhoods?

ABSTRACT For 3 decades, U.S. federal housing policies have sought to increase access to socially diverse and high opportunity neighborhoods and improve the quality of life for low-income families. Absent from current discussions of the costs and benefits of socially mixed communities is the potential value that they may have to low-income families seeking to purchase their own homes. In this paper, we examine the extent to which participation in homebuyer education and counseling programs supports sustainable low-income homeownership in socially mixed neighborhoods. Using quasi-experimental methodologies and longitudinal data from the Denver Housing Study for a sample of 533 low-income homebuyers, this study examines whether, compared with a comparison group of public housing residents who purchased homes on their own, participants in Denver Housing Authority’s (DHA) homebuyer education and counseling program (HOP) were (1) more likely to purchase homes in socially mixed destination neighborhoods; and (2) sustain homeownership over time. Results show that low-income homebuyers purchased homes in destination neighborhoods characterized by considerable ethnic and income mix. When compared to non-HOP homebuyers, HOP homebuyers also were better off in terms of 2018 home value appreciation and fewer foreclosures, suggesting that homebuyer education and counseling improves long-term sustainability of homeownership.

Cyclical versus Structural Sustainability of Homeownership: Is Counter-cyclical Intervention in Housing Markets Enough?

The economic and housing market difficulties that emerged as a result of the recent global financial crisis (GFC) have encouraged a focus on the cyclical sustainability of homeownership. As a result, there has been inadequate attention paid to the impact of increased real household incomes and wealth on the structural sustainability of a housing system built on homeownership as the dominant tenure. This paper argues that, where housing supply is relatively inelastic in the long run, underlying demand pressures may keep house prices on a path which continues to diverge from household incomes. This will add to borrowing constraints already faced by aspiring first homeowners with low and moderate incomes and with limited wealth. If financial institutions tighten lending standards in response to the GFC, households with limited equity and limited capacity to pay will find it even more difficult to gain access to finance than has been the case in the past. This raises the question of whether homeownership can be sustained at its current levels. The paper uses outcomes in Australia to illustrate the points made and suggests that other countries, such as the UK, may well be about to follow the same path.

Limiting Possessions? Managing Mortgage Arrears in a New Era

Over the last 30 years the UK has seen a structural increase in mortgage default, interacting with cyclical economic trends to provide peaks and troughs of default. The latest upturn in mortgage arrears, from 2004, has been exacerbated by recessionary pressures since 2006. Despite significant exposure to risk and a distinct configuration to the current recession, lenders initial responses in 2006 and 2007 to managing arrears were limited and unchanged from the 1990s. This paper explores the extent to which such practices then changed, why and with what consequences. The paper identifies a shift in lenders’ responses to mortgage arrears and possessions from ‘pay or possess’ to more ‘managed forbearance’. It explores the ways in which commercial considerations, housing market drivers, a more stringent regulatory environment and government intervention have influenced this change resulting in a slower than expected growth in possessions. The paper considers the contingent nature of these changes and the implication for the longer-term sustainability of homeownership. The paper is based upon a qualitative study of lenders’ and government agencies’ responses to the current market downturn. The paper has a UK focus, but, in the context of global recession and significant homeownership markets in many developed countries, the issue of mortgage default and its management may resonate beyond the UK.

Ten New Propositions in UK Housing Macroeconomics: An Overview of the First Years of the Century

In the mid 1990s, Meen set out a series of propositions concerning the relationship between housing and the macro economy during the 1980s and early 1990s. This paper provides 10 further propositions for the early years of this century, taking into account recent research and policy concerns. The first five propositions concern housing market risk, whereas the remaining issues deal with the sustainability of homeownership. The empirical evidence presented finds that there is limited evidence for bubbles over the past 10 years and models of house prices are stable. Furthermore, housing possessions are unlikely to fall to the levels observed in the early 1980s. It is also suggested that the private rental market may not expand at the same rate as in the past 10 years, but there are risks to homeowners down the income distribution. Finally, the main beneficiaries of new affordability targets may be existing rather than new households.

Owning a Home: New Opportunities and Challenges for Low-Income Women

ABSTRACT In recent years, policy initiatives at the federal, state and local levels have fostered innovative programs to promote and support low-to-moderate income individuals and families in achieving homeownership. However, the sustainability of homeownership among this group is an area of concern as default and foreclosure rates have increased and are expected to grow. This exploratory study examined the housing experience of 11 female, first-time low-to-moderate income homeowners who completed a homebuyer education program. Their experiences suggest that sustaining homeownership, while problematic, provides immeasurable positive gains within themselves and for their families. Strategies of how they cope with the challenges inherent in maintaining this asset are discussed. Implications for supporting these tenuous housing situations are offered.