Van Bortel, G., Gruis, V., Nieuwenhuijzen, J. and Pluijmers, B. (eds.): Affordable housing governance and finance: innovation, partnerships and comparative perspectives

Elena Bargelli and Thorsten Heitkamp (eds.): New developments in Southern European housing

I. Ellen and J. Steil (Eds.), The dream revisited: contemporary debates about housing, segregation, and opportunity

Pension reforms, risk transfer and housing finance innovations Abstract Weak housing creditor protection, accentuated by weak landed property rights and underdeveloped credit information systems constitute major constraints to housing finance development in many developing countries. Improving housing creditor protection require further institutional development and financial innovation. As a trigger of financial innovation, regulation has spawned pension reforms leading to the global shift from defined benefit to defined contribution pension schemes, which has created new opportunities to improve housing creditor protection and thus engender housing finance innovations. This paper considers how pension assets—accumulated benefits and associated personal, employment and contribution information—has provided a basis for collateralized lending and an additional avenue for credit information system development. The paper proposes a pension asset-backed creditor protection model that utilizes defined contribution pension assets to improve housing credit allocation, and thus, housing finance development. Pension assets represent alternative or complementary collateral assets for securing a housing credit (mortgage). And as depositories of information, the information content of pension assets and institutions could also be used alternatively and complementarily to assess the capacity, character and contribution (equity) of potential borrowers in the credit underwriting process. Future applied research may consider how the proposed model could be integrated in existing credit underwriting systems and the operational challenges that could emerge.

The regulation of reverse mortgages as a source of income in retirement: policy options and legal drivers Abstract The current context of uncertainty regarding the long-term future of pensions in European countries due to the lack of public resources, coupled with the unstoppable aging of the population, may force the elderly to use private financial instruments so as to meet their needs. One of them is the reverse mortgage, which enables them to withdraw equity from their homes without being required to pay back the loan during their lifetime. The truth, however, is that its use is not widespread, generally speaking, in European countries. This paper explores the regulation of the reverse mortgage in Spain and Italy, countries which have a legal framework for equity release schemes, and taking into account the legislation other countries have enacted to regulate this financial instrument (so the experiences in Ireland, the United Kingdom and the United States are taken into consideration), it concludes by formulating recommendations for policy makers to promote the marketing of this financial instrument.

Recent increase of tenancy in young Spanish couples: sociodemographic factors and regional market dynamics Abstract The increase of the proportion of rental-occupied dwellings between 2001 and 2011 is one of the most outstanding results of the 2011 Spanish census. This study aims to explain this increase in tenancy, unveiling the sociodemographic factors behind this pattern at the individual level, and at the regional level clarifying the role of market dynamics in this change. Accordingly, using the microdata from the 2001 and 2011 Spanish censuses, multilevel logistic models are estimated. Two main findings can be drawn from this study: the recent increase in tenancy occurs concurrently with a process of convergence towards a greater acceptance of tenancy among sociodemographic groups, and changes in housing purchase prices have an impact on the likelihood of a young Spanish couple being tenants. The policy implications of these findings are twofold. On the one hand, a more active role in the regulation of housing purchase prices to deter speculative demand is needed. On the other, a greater demand for tenancy requires changes in the tenure composition of Spanish housing stock. Finally, having effective alternatives to homeownership, young adults could rely less upon family networks during the transition to adulthood which could ultimately contribute to a reduction in late parental home-leaving and encourage family formation.

A need for policy revision to reach the intended beneficiaries: a learning from middle-income group housing models in Kolkata, India Abstract West Bengal Housing Board initiated two group housing models for catering to the increased demand of affordable housing amongst low-income and middle-income groups. A sole government venture and a joint venture under Public–Private Partnership (PPP). Hence assessing the satisfaction level of group housing residents “with cost” incurred is crucial in making policy decisions. The present study focuses on MIG owing to the challenging housing requirement of this group based on sociological and financial constraints. Selecting MIG group housings from Kolkata, India, satisfaction level was assessed at three discrete domains -“within premises”, “at neighbourhood” and “with cost” incurred and holistically by evaluating overall level of satisfaction “with location”. Measuring this phenomenon developing a Composite Satisfaction Index (CSI) as a weighted average is also intended in this paper. Primary survey was conducted using structured questionnaires and data were collected on a five-point Likert scale. Data being ordinal in nature a two step approach was adopted: initially through exploratory factor analysis contributing attributes were identified and later a Generalised Ordered Logit Model was fitted in STATA. Mean satisfaction scores were computed and validated with savings calculated as a difference of actual expenditure and recommended expenditure towards housing. Attribute “with cost” contributed significantly towards overall level of satisfaction “with location” in both the models. Higher income leading to high affordability, high satisfaction domain wise led to high satisfaction level and CSI for the PPP residents. Lower income leading to low affordability, moderate satisfaction domain wise led to moderate satisfaction level and CSI for the residents of government group housings. Computed CSI values complied with overall findings indicating the reliability of the index in similar contexts. Affordability variations hamper the successful outreach of implemented government policies to the intended beneficiaries hinting at a need for policy revision.

Do neighbour relationships still matter? Abstract Neighbour relations form an integral part of human social networks and urban planning has historically sought to strengthen social networks in neighbourhoods. There is also an ongoing discussion about the decreasing significance of place for social ties. Drawing on the results of a nationwide Finnish survey concerning neighbour relations and comparing it with data from 1986, this paper shows that especially the young age groups have fewer weak and strong ties with neighbours than before, whereas problematic neighbour relations have become a little more prevalent. The paper argues that only small differences exist between house types and between cities and rural areas concerning the prevalence of various types of neighbourly relations. The paper also suggests that there are in fact good opportunities and need to develop social ties also in rental houses and in urban circumstances.

Effects of housing wealth on subjective well-being in urban China Abstract Homeownership means not only having a permanent residence but also generating a considerable financial gain from house value appreciation. This study investigates how housing characteristics affect individuals’ subjective well-being (SWB) in China by using 2011 China Household Finance Survey data. The findings suggest that the channel through which housing characteristics significantly affect SWB mainly depends on housing assets. House value appreciation significantly improves SWB; however, housing debt does not affect the role of house value in SWB. Furthermore, housing wealth has a more significant impact on SWB for low-income homeowners and those living in the eastern region of China. Our findings shed light on potential solutions to enhance the SWB of urban residents. In particular, the government should pay more attention to raising their life satisfaction under the background of high house prices.

Cross-country evidence on the link between job security and housing credit Abstract This paper investigates the relationship between job security and housing credit, specifically the contradiction between employment insecurity and take up of housing credit—the former being the main reason for income uncertainty and the latter necessitating long-term commitment. It is argued that higher employment protection can increase demand for housing due to its mitigating impact on uncertainty about workers’ future income streams. Using yearly data for 23 countries from 1990 to 2016, the empirical analysis suggests a positive relationship between job security and housing credit at the aggregate level. A key implication is that it is crucial to provide sufficiently paid and secure employment that will enable households to fulfill their long-term commitment to creditors to meet housing demand through the financial intermediation channel. Moreover, higher job security could mitigate income and wealth inequality, and decrease the size and duration of financial shocks due to increasing debt repayment capacity during stressful times.