Housing as an engine of inequality and the role of policy

Housing as an Engine of Inequality and the Role of Policy

The article titled "Housing as an engine of inequality and the role of policy" was published in the International Journal of Housing Policy, a reputable source focusing on housing issues worldwide. The authors, Cody Hochstenbach, Justin Kadi, Sophia Maalsen, and Megan Nethercote, discuss the pressing issue of housing inequality, highlighting its significance in various socio-economic contexts, particularly in Australia, the Netherlands, and the UK.

The authors outline the ongoing housing crisis, which has led to increasing socio-economic inequality in many cities. In Australia, for instance, renters often find themselves moving further away from their jobs and schools in search of affordable housing. The COVID-19 pandemic has exacerbated this situation, with once-affordable regions now becoming increasingly expensive. Young adults are particularly affected, facing unstable rental situations and limited housing security.

In the Netherlands, significant housing protests occurred in late 2021, marking the largest demonstrations since the 1980s. Tens of thousands of young adults participated, drawing attention to a range of housing issues including rising homelessness, co-residence with parents, and stark divides between homeowners and renters. The issue has remained prominent on the public and political agenda.

In the UK, policymakers continue to promote homeownership as the preferred housing tenure despite the challenges many face in accessing it, especially in high-cost areas like London. Renting has become the new norm for many, particularly among younger generations lacking significant savings. The stark contrast between the ‘housing haves’ and ‘have-nots’ has intensified, with increasing property wealth among owners and escalating rental costs for tenants.

The article highlights that housing wealth is distributed highly unequally, with the top 10% of households in Australia, the US, and the UK holding substantial portions of total net housing wealth. For example, in 2017, these households owned 45%, 53%, and 39% of the total net housing wealth, respectively. This disparity underscores the intergenerational transfer of wealth, as many first-time buyers increasingly rely on parental support to enter the housing market.

The authors discuss the concept of housing classes, which posits that housing is both a product and a determinant of social class. Recent literature suggests that assets, particularly housing, are becoming more critical in determining economic outcomes than employment. This shift reflects the increasing relevance of housing in wealth accumulation and social stratification.

The article also addresses housing precarity, emphasizing the disadvantages faced by renters, including high housing costs relative to income, insecure rental contracts, and inadequate tenant protections. These conditions not only affect renters but also marginal homeowners who may face financial instability. The repercussions of housing precarity extend beyond economics, impacting health, employment, and political participation.

Finally, the authors argue for a more nuanced understanding of how housing policies contribute to inequality. They advocate for a focus on the role of state narratives and institutional arrangements, suggesting that favorable tax schemes and mortgage credit availability have historically facilitated housing wealth accumulation. They highlight the need for policies that prioritize tenant rights and address housing-related vulnerabilities to create a more equitable housing system.