The rhetoric and reality of housing choice: The role of urban consolidation

Abstract

In Australia, growth at the fringe has been seen as an inevitable response to a lack of affordable housing in the inner and middle zones of the major metropolitan cities. Urban consolidation was seen as one way of improving housing affordability and increasing housing choices and, at the same time, constraining outward growth. It will do so only if households forego past preferences for ownership of a detached house. This paper examines the contribution urban consolidation has made to meeting affordability and choice objectives by providing some insights into whether households are trading off tenure choices for lifestyle choices based on location and dwelling type. It also provides information on the extent of spatial polarisation of income that has contributed to the observed outcomes.     

Dual Occupancy Households and their Neighbours in Melbourne

Dual occupancy provisions were introduced into the Melbourne Metropolitan Planning Scheme as one of the means of implementing the metropolitan planning policy of urban consolidation, while at the same time providing greater choice in housing type and assisting in housing af fordability. This paper documents the characteristics of dual occupancy households and assesses the impact of dual occupancy development on neighbouring dwellings. It also discusses the research necessary for establishing the extent (if any) to which dual occupancy development is impacting on urban consolidation and housing affordability.     

Impacts of contrasting housing policies on low-income households in Australia and the Netherlands

This paper aims to contribute to the debate in comparative housing studies about the significance of national housing policies by considering what can be learnt from analysing the consequences of different policy paths. In particular, the paper looks at the evidence of the long-run impacts of different housing strategies adopted to assist lower-income households in Australia and the Netherlands, using housing affordability as a measure of their impact. Australia is an example of a country that has promoted mass home ownership across the income distribution supplemented by a very small public housing system. In contrast, the Netherlands has relied more on a large and diversified social housing sector. The comparative analysis shows that there are many similarities in the patterns of affordability among low-income households in the two countries despite the use of different policy means. In the past, both countries had good success providing secure and affordable housing for poorer households. Now, lower-income households are experiencing greater affordability problems that are linked to societal changes and the retrenchment of government housing assistance in both cases. However, the study also finds that affordability problems among lower-income households are worse in Australia because of the greater reliance on private housing in that country.     

Long-Run Trends in Victorian Housing Affordability and First Transition into Homeownership

The recent house price cycle has highlighted concerns about housing affordability. But is the recent deterioration in housing affordability a short-term problem, or is it a continuation of long-term trends? We take advantage of customised data tables from the Australian Bureau of Statistics Census of Population and Housing to address this question. We focus on the state of Victoria, Australia, by comparing housing affordability and tenure share trends from 1981 to 2001, a period which encompasses two house price booms. Specifically, we look at households by income quintiles and age group in Victoria. We find that housing affordability has deteriorated, particularly for those in the lowest two income quintiles. Most importantly, deterioration is not restricted to one inter-census period. It is a trend that is evident through most inter-census periods from 1981 to 2001. Furthermore, we find that among younger households, those under 35 years of age, the share of home purchasers and outright owners is in long-run decline. The long-run trends in housing affordability pose a serious threat to the homeownership aspirations of younger Victorians.     

Residential location choice of knowledge-workers: The role of amenities,workplace and lifestyle

This study investigates the residential location choice of knowledge-workers at the intra-metropolitan level by applying discrete choice models. The models represent housing choices of 833 knowledge-workers in high-technology and financial services and analyze the relative importance of lifestyle and cultural amenities in addition to classic location factors. Hence, the model bridges the gap between the recent lifestyle-oriented and the classical utility-oriented conceptualizations of the residential choice of knowledge-workers. The most important factors are municipal socioeconomic level, housing affordability and commuting time, while substantial secondary factors are cultural and educational land-use and culture-oriented lifestyle.     

Housing affordability in the Netherlands: the impact of rent and energy costs

Energy costs have been rising as well as rents, both in the Netherlands and elsewhere, leading to situations commonly described as ‘housing poverty’ and ‘fuel or energy poverty’. A dwelling may be unaffordable on at least two counts: rents or energy costs that are ‘too high’ in relation to income (excluding cases of ‘too low’ income). This paper measures comprehensively for the first time housing affordability of tenants in the Netherlands with respect to rent and fuel in order to gain insight in the ways this ongoing budgetary commitment can be calculated. Starting point is the expenditure-to-income ratio, which is usually used in the Netherlands to represent the affordability of housing consumption. For 2012 its components—incomes, rents and fuel costs—are separated out. The absence of a socially acceptable benchmark for ‘affordable’ versus ‘unaffordable’ housing and the fact that lower-income households pay relatively more on rent and energy than those with a higher income (Engel’s Law) call for an alternative method to measure affordability. The residual income approach is shown to be useful in identifying households with housing and energy affordability problems, once social norms have been established for the relationship between income, rent and energy expenses. It is concluded that even energy expenses by themselves can push households over the affordability threshold, in the situation where rents are considered as affordable.     

Defining and measuring housing affordability using the Minimum Income Standard

Abstract

There is growing concern about a crisis in housing affordability in the UK, renewing longstanding debates about what constitutes ‘affordable’ housing. The growing use of the private rented sector by low income households has also led to increased interest in understanding the impact of housing costs on living standards. This paper builds on existing work on ‘residual income’ measures of housing affordability, accepting that what households can afford to pay for housing is related to their ability to cover other costs, and so not directly proportional to income. It proposes a new approach to defining and measuring housing affordability, based on the Minimum Income Standard (MIS). The paper then uses data from the Family Resources Survey (2008/09 to 2015/16) to examine housing affordability within the rented sector across the UK, exploring the value of this measure both in revealing the scale of the ‘problem’ and assessing the likely impact of suggested interventions.     

Affordability of housing and accessibility of public services: evaluation of housing programs in Beijing

Acute housing poverty and low housing affordability among low-to-medium-income households have become challenges in the pursuit of a harmonious society in China. Promoting housing subsidies and stimulating investment on affordable housing have been at the center of China’s housing policy. This paper analyzes the correlation of affordable housing program in Beijing with household affordability of adequate housing and accessibility to public services, which include elementary and middle schools, hospitals and public transportation. Economic and Comfortable Housing is studied based on unique database of eligible household and affordable housing projects. We find that the program fails to make housing affordable and accessible for eligible households. The implications of housing policy design in the context of the economic and social well-being of targeted households are highlighted in the study.     

The uneven geography of housing affordability stress in Canadian metropolitan areas

Housing in‐affordability is a growing problem within Canadian urban areas. This research asks an as‐yet unanswered spatial question: where do those suffering high rates of housing affordability stress reside and what do the spatial patterns imply about policies intended to address this housing problem? This paper tabulates and maps the spatial distribution of households that pay excessive amounts of their income for rent in order to identify locations within metropolitan regions where housing affordability stress is greatest. It is found that significant unevenness characterises the spatial distribution of housing affordability problems in major Canadian census metropolitan areas (CMAs). Only a minority of places conform to the North American stereotype that concentrates this problem near the city centre. Where some CMAs have concentrations of the problem in the inner city or, alternatively inner suburb, other metropolitan areas exhibit a more diffuse pattern of housing in‐affordability. The locus of the problem is also variable depending on whether the household is of the family or non‐family type. The interpretation of the uneven patterns relates broadly to features of supply and demand that have been identified in previous research. From both a policy and theoretical perspective this work demonstrates that greater attention needs to be paid to the spatial aspects of housing affordability and to the related, economically‐induced risk of homelessness in Canadian metropolitan areas.     

Critical factors affecting affordability of mortgage housing in Kenya

This study investigated factors affecting affordability in the mortgage housing sector in Kenya. Housing affordability is a major problem experienced by urban households in Africa. According to the African Development Bank (The middle of the pyramid: Dynamics of the middle class in Africa, market brief, 2011), only three per cent of the entire African population can afford a mortgage. In Kenya, the Centre for Affordable Housing Finance in Africa has estimated that only eleven per cent of urban households earn enough to support a mortgage. Attempts were made in this study to develop an empirical model to reveal the underlying factors affecting housing affordability in Kenya. Applying a multiple regression approach, the model identified that affordability of mortgage housing in Kenya is significantly driven by clusters of factors related to the households’ social-economic factors, property attributes, loan characteristics and the macroeconomic environment. Specifically, the interest on mortgage, number of households’ dependents, loan-to-value ratio, type of mortgage instrument, number of income earners in a household, real gross domestic product per capita and size of household are the critical factors affecting affordability with the greatest contribution to the affordability problems of households in the mortgage housing sector in Kenya.     

Residential Mobility and Neighbourhood Outcomes

When households move they obviously weigh both the quality of the house and the quality of the neighbourhood in their decision process. But, to the extent that housing quality and neighbourhood quality are inter-twined it is difficult to disentangle the extent to which households are more focused on one or another of these two components of the choice process. This paper uses both cross-tabulations of the neighbourhood choices, and logit models of the actual choices, to examine the relative roles of neighbourhoods and houses in the choice process. The research is focused on the question of the extent to which households trade up in house quality, or neighbourhood quality or both, as outcomes of residential mobility. The research measures neighbourhood quality in both socio-economic and environmental dimensions. The study shows that many households not only move up in housing quality, but quite consistently also make gains in neighbourhood quality, often independently of gains in housing quality. Not surprisingly, the largest gains in neighbourhood quality are related to households who make the city/suburban transition in their housing moves. The research adds another dimension to the growing and extensive literature on neighbourhoods and their role in residential choice.     

How long do households remain in housing affordability stress?

We develop a model that specifies the duration of housing affordability stress for particular types of households. Using panel data from Australia, households are considered in semi- and parametric analysis against different household characteristics, revealing whether these characteristics predict the duration of housing affordability stress. For most types of households, an experience of housing affordability stress lasts less than one year. A group of household types disproportionately made up of renters and sole persons remains in stress for longer periods. Chronic housing affordability stress occurs if the duration of stress lasts for more than three years. Linking the duration of stress to household types, and demographic, financial and educational characteristics makes it possible to design more targeted, and therefore more efficient housing affordability policies.     

Deconcentrating Poverty With Housing Programs

Problem: Housing programs of the past have exacerbated the problems of concentrated poverty. Current housing programs serving very low-income households, including homebuyers as well as renters, should be examined to determine the extent to which they help households make entry into neighborhoods with low concentrations of poverty.

Purpose: This research is designed to assist planners in understanding how well various approaches to resolving housing affordability problems can facilitate the poverty deconcentration process.

Methods: Administrative data from the Department of Housing and Urban Development are used to assess the degree to which federal housing programs help lowincome homebuyers and renters locate in neighborhoods where less than 10% of the population is below poverty.

Results and conclusions: Subsidizing households ought to be more effective than subsidizing housing units at helping lowincome households locate in low-poverty areas, and whether a household rents or buys should not matter to whether a program succeeds at deconcentration of the poor. Yet, analysis of national datasets across several housing programs finds neither of the previous propositions to be true. Housing vouchers suppliedto households are not helping renters locate in low-poverty areas any more effectively than are current project-based subsidies. It also turns out that tenure matters; a disproportionately higher share of low-income homebuyers are locating in low-poverty neighborhoods than are lowincome renters.

Takeaway for practice: I recommend that housing planners seeking to make poverty deconcentration more effective use housing placement counselors, administer programs at the metropolitan scale, lease and broker market-rate housing directly, promote mixed-income LIHTC developments, practice inclusionary zoning, and monitor the impacts of these efforts.

Research support: U.S. Department of Housing and Urban Development.     

User Costs and Housing Expenses. Towards a more Comprehensive Approach to Affordability

Recently housing affordability has reached the agenda in Flanders and the Netherlands, giving a good reason to present a review of the concept of affordability and different definitions. The concept of short-term affordability, which is concerned with financial access to a dwelling and is based on cash flows, is combined with the concept of long-term affordability, which is about the costs of housing consumption. The use of these concepts is illustrated for Flanders and the Netherlands. They show that each concept has its own uses and that they are not interchangeable. However, both concepts indicate that in 2005 higher-income households, and especially homeowners (with a mortgage), were relatively better off than lower-income households, particularly renters. Homeowners' higher income levels on average more than compensate for their higher expenses in comparison with tenants; they also receive higher explicit subsidization and in times of rising prices they also receive expected returns on housing.     

城市不同收入家庭住房支付能力研究

住房支付能力度量方法分为比率法和剩余收入法.基于我国住房供应体系,构建了剩余收入法方法论框架,定义了住房支付能力、首付款支付能力、还款(或租金)支付能力等概念.并以2005年我国城市不同收入家庭为实例进行了分析,得出如下结论:低收入到中等收入家庭住房供应不足;低收入家庭对经济波动极为敏感,购房风险大于高收入家庭;低收入以下家庭住房保障有收入扶持和住房补贴两种方式;贷款期限延长,可支付购房家庭比例增加;降低住房面积可缓解我国城市土地开发压力,增加住房覆盖面,提高家庭住房支付能力.本文构建的剩余收入法方法论框架可用于研究不同城市不同收入家庭住房支付能力.     

Factors Shaping the Dynamics of Housing Affordability in Australia 2001–06

This paper investigates factors shaping the dynamics of housing affordability in Australia over the period 2001–06. Panel model findings indicate that those with children and the unwaged are more prone to persistent housing affordability stress. However, residential moves during spells of housing affordability stress alleviate housing cost burdens. Survival in affordable housing has become progressively more difficult over the 2001–06 timeframe, an unsurprising finding given a house price boom over the period of analysis. Residential moves are again influential, but those made by households during a spell in affordable housing are associated with the onset of housing affordability stress.     

Canada's increasing housing affordability burdens

This study uses national survey and census data on shelter costs and income to describe changes in the proportion and the number of low‐income households spending more than half of their income on shelter. While affordability problems increased consistently over the last two decades for almost all classes of households, the problems are highly concentrated among those with low‐incomes. Women household maintainers are significantly more likely to experience problems and the number of income recipients in a household is a key indicator of a potential problem. While all regions and major cities had increasing problems, the data show major differences across regions and urban centres. No correlation is found between the growth of cities or the growth in rent levels and the growth of the proportion of low‐income households with severe affordability problems. Housing prices were remarkably stable during the 1990s and cannot be claimed as the main cause of the escalating problem. However, strong correlations relate the growth of affordability problems to city size and to the prevailing rent level, suggesting that land rent is a factor in determining the problem's spatial incidence and that continued concentration of the population in major cities will continue to fuel the growth of the problem. The most disturbing finding is that, for the most vulnerable groups, the prevalence and severity of affordability problems worsened during the 1990s, reflecting the consequences of a larger and longer trend toward increasing income inequality in Canadian society. The paper points to other research which links the affordability issue to homelessness and argues that the trends in affordability burdens be considered as ripe for serious policy intervention at all three levels of government. While specific policy conclusions cannot be based on this study, the results do point to the growing need for a change in Canadian housing policy.     

The Anatomy of Housing Stress in Sydney

The issue of housing affordability is now the focus of a number of policy interventions in Australian metropolitan areas. In this article data from the ABS 1996 Census and 1999 National Housing Survey are used to unpack the geography of Sydney's unaffordability problem at the local level and looks at the numbers, distribution and characteristics of low income households in housing stress.     

Measuring housing affordability in São Paulo metropolitan region: Incorporating location

This paper develops a novel measure of affordability for the São Paulo metropolitan region that combines housing costs and transportation costs, including opportunity cost associated with commuting time. The results for the 2007–2013 period indicate that the number of households spending > 30% of their income on housing or 45% or more on housing and transportation costs combined has been increasing rapidly. This measure of affordability that includes transportation costs provides a broader measure of housing needs to guide housing policy in addressing housing conditions that have negative effects on individual and social welfare.     

The Anatomy of Housing Stress in Sydney

The issue of housing affordability is now the focus of a number of policy interventions in Australian metropolitan areas. In this article data from the ABS 1996 Census and 1999 National Housing Survey are used to unpack the geography of Sydney's unaffordability problem at the local level and looks at the numbers, distribution and characteristics of low income households in housing stress.