Landlords vs Tenants = Top vs Bottom? Class Positions in Rental Housing in Germany
Home ownership status is closely linked to social inequality in Germany, where tenants face several disadvantages in multiple dimensions. Even though Germany is one of the biggest renter and therefore landlord nations, in the context of the housing question it is the demand side that has been discussed and studied most. Less attention has been given to the supply side, particularly individual small-scale landlords. This article is one of the first attempts to shed light on the largest provider group that literally holds the keys to homes in its hands. Drawing on quantitative data, this article examines the socioeconomic profiles of landlords compared to tenants over time, finding landlords in the upper strata and witnessing long-term wealth divides in relation to tenants. Coupled with structural power imbalances during tenancies, this research seeks to stimulate research on private renting in the future from a class perspective.
The Role of Mortgage Subsidies in the Croatian Economic Growth Strategy: a Political-Economy Approach to the SSK
Since 2017, Croatian housing policy has focused on promoting homeownership through the SSK programme – a form of mortgage subsidisation that covers a proportion of housing costs. Although this policy aimed to improve affordability and increase homeownership, a recent economic evaluation has shown that the SSK has in fact contributed to rising house prices and has been ineffective at raising the homeownership rate. While econometric research has identified the impact that the SSK has had on house price volatility and affordability, the underlying factors leading to the implementation of this subsidy, as well as its broader societal impacts, remain under-researched. Through a political-economy lens, this paper analyses the context that led to the inception of the SSK, its core targeting principles, and its impact on the housing market. We ask: How does this subsidy position the Croatian housing market within the national strategy for economic growth and social policy provision? We argue that this policy’s impact on housing markets is twofold. First, the SSK reinforces a shift towards financialised growth through increased asset prices. Second, this subsidy shifts the focus of social policy towards mortgage markets, thereby furthering the privatisation of the welfare state and favouring middle-income groups. This paper’s contribution resides in critically discussing the SSK beyond its stated goals and contextualising it within the broader model of economic growth dependent on private finance. Through interviews with relevant stakeholders, descriptive data indicators, and a review of policy documents, this paper characterises the Croatian growth strategy as a form of small-scale financialisation that relies on aligning social policy with mortgage markets. Finally, we position the SSK within a wider array of finance-led housing policies and suggest the formulation of a comprehensive housing strategy tailored to the broader segments of Croatian society.
Traces of Obduracy: Imaginaries of ‘Social Inertia’ in the Process of Introducing Collaborative Housing in the Czech Republic
This paper explores the sociotechnical change necessary for the introduction of collaborative housing projects into the Czech super-homeownership housing regime. To better understand the obduracy of the current housing system, we examine the major barriers and threats to the implementation of such projects through a series of workshops with non-experts in selected cities. Our findings suggest that the housing system’s obduracy is related to social imaginaries that we conceptualise as the ‘imaginary of social inertia’. This form of imaginary, along with other factors such as a lack of supporting legal and financial infrastructures, creates a complex network of obstacles that reduce the likelihood of such housing projects gaining ground. In conclusion, our research emphasises the role of imaginaries in studying obduracy and thus provides valuable insights into the processes of urban sociotechnical change.
Housing Market in Central European City during the COVID-19 Pandemic
Many aspects of the global economy changed during the Covid-19 pandemic, including the real estate market. This study examines the primary residential property market in Opole during the Covid-19 pandemic. It uses property transaction data from 2018 to 2021 to conduct statistical analyses and independent group tests and also takes into account the real-estate price trend from 2014 to 2020. The study finds that both property prices and preferences relating to the structure and location of housing changed during the pandemic. In the case of Opole, the number of transactions involving residential units in the primary market increased in 2020 compared to previous years. After adjusting the unit price value of residential properties for the trend in the pre-pandemic period, the study finds that there was also an increase in property transaction prices. The study confirms three important facts relating to phenomena that are occurring globally in cities today. First, local communities are more diverse in terms of the economic heterogeneity of real estate buyers. Second, unlike big urban areas, small cities may be more resistant to the process of citizens migrating to suburban areas, thereby limiting the negative phenomenon of urban sprawl. Third, the housing real estate market in small cities is considered a reliable form of investment of assets, as real estate prices increased during the Covid-19 pandemic.
Applying the AD-AS Model to the Housing Market of Post-Socialist Economies
We propose applying the standard aggregate demand and aggregate supply model (AD-AS) to the housing market. It is a very simple and intuitive tool that can help shed light on the major forces at play in the market and that can supplement the use of the general equilibrium and dynamic stochastic equilibrium models (DSGE). The latter models are very sophisticated and aim to cover many aspects of the economy, but they require a significant number of long time series to estimate the model parameters. However, in many countries, such as post-socialist countries, the time series are short. Those models moreover cover only real house prices, but in certain situations we should consider real and nominal prices at the same time.
Vertical Integration & Performance in Residential Real Estate
Vertical integration is a growth strategy whereby a firm engages in multiple stages of the value chain. Although the benefits of vertical integration are well documented, few studies have examined its relevance in real estate. In response to this lack of research, this paper explores tenant perceptions of property managers’ vertical integration and effectiveness. The results of this international study show the benefits of vertical integration extend to residential real estate, such that renters are more trusting, loyal, committed, and desirable when they perceive their property manager as vertically integrated. This paper also uncovers a concering finding that many tenants are living in unaffordable rental accomodations, requiring further research. This study contributes to a large body of vertical integration literature and extends the empirical examinations to real estate and property management.
‘The Social Managers Are Back in Town’: the Challenges of Housing Management in a Residualised Public Housing Sector
The residualisation of social housing sectors requires housing managers to intensify social management activities aimed at promoting tenants’ wellbeing and social cohesion. This paper discusses the implementation of such activities in the Italian public housing sector. It juxtaposes the vision conceptualised at the policy level with the daily activities of housing managers in practice on the ground and highlights the gaps between policy goals and realities of tenants’ involvement. While social management activities are expected to contribute to breaking the vicious circle of financial, technical, and social decline that has long affected public housing estates, the short timeframe of the planned interventions raises the question of the potential for structural change.
The Housing Satisfaction of Polish Households and Its Determinants
The level of satisfaction that households have with their housing is important for people to function properly, as it largely determines their life satisfaction. Housing satisfaction is a multidimensional concept that can be defined, measured, and analysed in various ways. The aim of the article is to identify the housing satisfaction of Polish households in terms of living space, housing standard, and housing expenses, and to identify the main determinants of housing satisfaction. Factors that have a major impact on housing satisfaction are classified based on a literature review. The sources of Poles’ housing satisfaction are identified using ordered logistic regression. This article is one of the first attempts to analyse housing satisfaction in a post-socialist Central and Eastern European economy.
Housing Quantum and Innovative Building Systems in South Africa – the Affordability Perspective for 2020
The adoption of innovative building technologies (IBTs) and social welfare policies in South Africa has facilitated an increase in decent homeownership among low-income groups, thus improving their quality of life. However, due to the escalating costs of building materials, the capital and lifecycle costs of implementing these technologies may no longer be affordable. This research aims to provide a comparative evaluation of the affordability of some readily available IBTs in the South African construction industry, relative to existing homeownership subsidy grants. The method used involved the use of secondary data for these IBTs and the income constraint methods. The results showed that, apart from the technologies suitable for the provision of temporary structures, most of the other technologies were not affordable for the complete subsidisation of the top structure when both capital and lifecycle costs were used, except the Moladi and Robust structure IBTs under some low-income homeownership programmes. Further analysis using credit-linked subsidies revealed that the minimum household income required to achieve affordable homeownership (and their rankings) depends both on the evaluation technique (lifecycle or capital costs) and technology used. To improve affordability, any implementing government can either raise the amount of the top structure subsidy grant, promote the use of cheaper but durable IBTs, or promote the use in incremental building methods, such as the Enhanced People’s Housing Process (EPHP) for the case of South Africa.
Diving in at the ‘Bottom End’: The Risk Awareness and Risk Management Practices of Sub £65K Landlords
Significant growth in Scotland’s private rented sector over the last 25 years has been led by a large number of individual lay investors/landlords who each own a smattering of properties. These characteristics, which are replicated in several countries where neoliberal housing policies prevail, have implications for the efficacy of PRS investments, but also for conditions and the stability of investment patterns within the sector. This study examines landlord investment risk awareness and behaviours via qualitative interviews with a small sample of Scottish landlords operating at the ‘bottom end’ of the market, which is disproportionately home to vulnerable groups and where some investment risks are believed to be more acute. The findings suggest that some landlords have relatively low levels of risk awareness, fail to adequately consider risk prior to investing in the PRS, have mixed success in selecting and implementing risk management and mitigation strategies, and incur significant risk-borne costs, which can limit returns.
Housing Finance in the Aftermath of the Foreign-Currency Mortgage Crisis in Eastern Europe: Editorial
This special issue expands on the existing research on foreign-currency lending and the forex loan crisis in Eastern Europe by investigating other forms of housing-related finance and post-crisis developments. Bringing together hitherto disparate strands of research, our issue traces the linkages between macroeconomic developments, state measures, class dynamics, and social movements in the aftermath of the forex loan crises in Latvia, Romania, Croatia, Bosnia and Herzegovina, and Hungary as part of their long-term trajectories of housing finance. We find that despite different political-institutional articulations, these trajectories all feature a new expansion of lending based on a bifurcation of the credit market into more secure, often subsidised mortgage lending aimed at better-off debtors and more risky non-mortgage loans used for housing purposes by more precarious households.
Debt Relief or Exit: The Long-Term Effects of Forex Loans on Latvian Households
The stubborn decision of the Latvian government to join the eurozone at any cost put a great burden on Latvian households after the crisis of 2008. Nevertheless, no popular protest movement emerged to change the course of this decision. This study discusses why Latvians undertook individual strategies to cope with the forex loan crisis. Particularly, I look at the choice between formal debt relief procedures and emigration as alternative individual strategies for defaulted debtors. These programmes have not reversed the negative migration trends or significantly decreased the number of Latvian households in arrears. Debt discharge is mainly attainable for wealthy individuals who are able to mobilise their financial and kinship resources. Worse-off debtors cannot attain debt discharge or are stigmatised during the process. Alternatively, emigration has offered a way to cope with overindebtedness and keep up with mortgages and consumer loan payments for a much larger segment of the debtor population.
Whither Peripheral Financialisation? Housing Finance in Croatia since the Global Financial Crisis
This article analyses recent developments in Croatian housing finance to update the established account of housing finance and peripheral financialisation in Eastern Europe that is based on the boom-bust cycle of the 2000s and early-to-mid 2010s. During the bust stage of that cycle, changes in regulation and in the behaviour of debtors and creditors resulted in deleveraging and a shift away from the risky and exploitative lending practices characteristic of peripheral housing finance. However, new increases in household debt and housing prices since 2016–17, coupled with the COVID-19 pandemic, seem to have reversed these trends. While a boom-bust cycle of similar scope and modality to the first one is unlikely to be repeated, peripheral forms of housing finance have persisted to some degree.
Different Debtors, Different Struggles: Foreign-Currency Housing Loans and Class Tensions in Romania
Management of foreign-currency household debt in Romania in the aftermath of the Global Financial Crisis in 2008 had the effect of deepening pre-2008 class disparities and treated debtor categories differently according to their income. In this article we contribute to the debate on subaltern financialisation by showing how post-crisis credit and housing policies contributed to the fact that today different debtor groups (i.e. by type of credit but also by time of lending) find themselves at opposing ends of the political spectrum based on different class alliances, with those who benefited from the crisis-management polices positioning themselves against those who were the ‘losers’ under these same policies.
Forex Mortgages and Housing Access in the Reconfiguration of Hungarian Politics after 2008
After a boom in foreign-currency denominated (forex) mortgage loans in the 2000s and the resulting debt crisis in 2008-2009, Hungary’s debt management came to be defined by a highly politicised combination of several phenomena: the existence of a large social base at risk of defaulting on their mortgages; the integration of debtors’ struggles into a shift from the post-socialist dominance of neoliberalism to a national conservative political hegemony during the crisis years; and the political foregrounding of forex debt management in the post-2010 Orbán governments’ construction of a new financial model as part of a post-neoliberal authoritarian capitalist regime. The article traces how two main aspects of the forex mortgage crisis, housing debt under dependent financialisation and the problem of limited housing access, became integrated into Hungary’s electoral politics and macroeconomic transformation in the last decade.
Housing Uncertainty: Socio-economic Inequality and Forex Loans Trajectories in the Bosnian Housing Market
This article explores the nexus between the financialisation of housing and socio-economic inequality in Bosnia and Herzegovina (BiH). In this context, since the post-war economic reforms, driven by deindustrialisation, the precarisation of labour, and dependent financialisation, housing loans have become a ‘privilege’ for a restricted group of people with high and stable incomes. Instead, the housing aspirations of Bosnians are generally met with the aid of consumer loans and the ostensibly cheaper FX loans that were introduced in the mid-2000s. Drawing on quantitative and qualitative data, this paper highlights the enduring features of the polarised credit market in BiH. It particularly focuses on the period after the 2008 crisis when lending policies were only mildly re-regulated. FX loans never became the object of an ad hoc law to convert them to Bosnian convertible marks. This institutional approach has been unable to challenge the extreme class segmentation of housing finance and is still fostering indebtedness and precarious housing conditions among the lower-income segments of Bosnian society even after the pandemic.