Study notes on academic ideas about housing affordability

Study notes on academic ideas about housing affordability

Academic ideas are bolded

Marietta E. A. Haffner & Harry J. F. M. Boumeester (2010): The Affordability

of Housing in the Netherlands: An Increasing Income Gap Between Renting and Owning?, Housing Studies, 25:6, 799-820.

“Although there is no standard for measuring expenditures on housing, the method used in this study is the expenditure-to-income ratio, which is the standard that is usually applied by the Dutch ministry responsible for housing when dealing with issues of housing affordability (Haffner et al., 2008). For this purpose it is appropriate to show changes over time”;

“More implicitly, the policy context affects gross rents for tenants and gross expenditure on housing by homeowners. In the case of renting, there are (implicit) bricks-and-mortar subsidies for social renting and the rent regulation for most (95 per cent) of the rental dwellings that affect the level of gross rent. In the case of owner-occupation, it is a combination of inelastic supply, rising prices and regulation on the mortgage market that influences the level of gross expenditure on housing. Mortgage interest tax relief on owner-occupied dwellings in income tax, is said to push up house prices in cases where supply fails to respond. It allows for higher mortgage loans to be taken out and for mortgage types that take full advantage of the mortgage interest deduction for the whole loan term”;

“In conclusion, changes in prices will mainly influence the affordability of existing homeowners in the longer term. In contrast, regulation in most of the rental sector and the subsidisation of social renting will usually prevent volatility in house prices from affecting the affordability of rental housing. If, however, unemployment increases as it did in the aftermath of the ‘dotcom bubble’, the households that are affected will have a lower income than before and housing will become less affordable unless households move house”;

Trudi Bunting , Alan R. Walks & Pierre Filion (2004) The uneven geography of housing affordability stress in Canadian metropolitan areas, Housing Studies, 19:3, 361-393, DOI: 10.1080/0267303042000204287.

“On the demand side of the housing equation, the ‘new poverty’ and the increased problem of housing affordability are all inextricably part of the restructuring process—economic, social and demographic (Figure 1). However, it is also important to recognise that increased levels of impoverishment are only one side of the picture. As also seen in Figure 1, factors on the supply side are equally responsible for producing unprecedented rates of housing in-affordability. To begin with, globalisation and restructuring have created great imbalance in urban growth rates (Bunting & Filion, 2001). Relationships between soaring land costs and problems of housing affordability have yet to be documented in Canada, but studies in the US have been able to demonstrate a direct connection (e.g. Downs, 1992; Levine, 1999; Nelson, 2000)”;

“However one views the various causes, there can be no doubt that the combined forces of new poverty and tighter housing markets have produced an increase in the absolute number of poor households living in Canadian metropolitan areas over recent decades and a decrease in the supply of affordable rental units”;

“There is an emerging school of thought that believes that a high degree of spatial segregation is prerequisite to the development of entrenched ‘cultures’ of poverty that have come to be referred to in the literature as an ‘underclass’. In the US, studies based on this concept of underclass portray the inner city as the locus of spatially-concentrated communities of visible minorities caught in self-perpetuating poverty (Wilson, 1987, 1996). British work in a similar vein further recognises the existence of concentrated pockets of extreme impoverishment in the state-subsidised housing estates that are often suburban in location (Galster, 2002; Lee & Murie, 1999; Whitehead, 2002). A separate but related literature dealing with the concept of a ‘dual city’ produced in response to increasing globalisation, cites the inner city as, among other things, the locus of residence of impoverished immigrants and others enlisted into the low-income service sector (Sassen, 1991, 1994; Van Kempen, 1994)”;

Glen Bramley & Noah Kofi Karley (2005) How Much Extra Affordable Housing is Needed in England?, Housing Studies, 20:5, 685-715, DOI: 10.1080/02673030500213938.

“Households with an ‘affordability problem’ may be defined in various ways. Those in quadrant A have an unambiguous problem, while those in quadrants B and C fall below at least one standard and could not move to an acceptable situation given prevailing housing price (given by the slope of the budget line from point Y through the intersection of H* and N*)”;

“In summary, ‘affordability ratios’ are appealing to common sense, can be rationalised from behavioural evidence, and tie in with notions of comparability (horizontal equity). They have actually been widely used in practice in rent-setting and housing allowance schemes in different countries. However, the ‘residual income approach’ seems to represent a more rigorous application of the concept that is fully consistent with the mainstream analysis of poverty. The residual income approach still faces certain problems”;

Diana Mitlin (2001) Housing and Urban Poverty: A Consideration of the Criteria of Affordability, Diversity and Inclusion, Housing Studies, 16:4, 509-522, DOI: 10.1080/02673030120066572.

“Structural adjustment programmes have often added cyclical to long-term structural poverty, especially in their first-phase when macro-economic austerity combines with curbs on capital expenditure in public sector budgets. The austerity phases, which have sometimes lasted some four to eight years, had significant impacts in the urban centres of many Latin American and sub-Saharan African countries during the 1980s and 1990s”;

“‘Urban poverty’ is increasingly differentiated along gender, age, locational and occupational characteristics, and poverty itself can take various forms, including income or food poverty, housing poverty and inadequacy of access to basic urban services”;

“Urban governance is becoming ever more complex. Decentralisation has

placed new roles and responsibilities on local authorities, often without the

necessary competence or resources (McCarney, 1996). Plans rarely accept or acknowledge the space that needs to be created if low-income communities are to dialogue with other civil society groups (many of whom dislike the urban poor as much as the city officials) and the city and national governments. There have been some innovative attempts to include the urban poor, such as, for example, the participatory budgeting movement in Puerto Alegre which has since spread to other Latin American cities (Abers, 1998, Bretas, 1996.) However, in most cities, there has been little concern to include groups of the urban poor in the process of decision-making in a structured, systematic way, nor have there been large-scale programmes to address the need for land, housing and infrastructure. This is so notwithstanding the provisions of the Earth Summit (1992), the second United Nations Conference on Environment and Habitat II (1996), the second United Nations Conference on Human Settlements”;