How can Homeownership Be a Progressive Policy? Rethinking Affordability, Finance, and the Politics of Housing

This research brief, published by the Progressive Politics Research Network, explores the critical issue of housing affordability in advanced democracies. Authored by Aidan Regan, it highlights how homeownership can be reimagined as a progressive policy amidst growing inequalities in housing access. The document is part of a series focused on the politics of housing, emphasizing the challenges and policy opportunities surrounding homeownership.

Housing affordability has emerged as a pressing challenge across advanced economies. Over the past two decades, house prices and rents have surged far beyond wage growth, leading to widespread discontent and reshaping electoral landscapes. Homeownership remains a key aspiration for many, yet access has become increasingly unequal, exacerbating class and generational divides. The brief posits that homeownership can only be considered progressive if it is affordable, accessible, and free from speculative asset inflation.

In OECD countries, housing constitutes 20-30% of disposable income, making it the largest financial commitment for most households. Historically, secure and affordable housing has been linked to prosperity and the expansion of the middle class. However, rising homeownership rates have stagnated, especially among younger and lower-income households. Those who can afford homes often rely on parental assistance, while many renters face escalating costs with little security, deepening the divide between asset-rich owners and asset-poor renters.

The political ramifications of housing affordability are significant. Voters facing unaffordable housing demonstrate lower trust in government and show increased support for anti-incumbent parties. A Eurobarometer survey indicated that rising living costs, including housing, were top concerns influencing voter choices in European elections. This disconnect between homeowners and renters creates a complex political landscape, where younger generations feel increasingly disenfranchised and excluded from ownership.

The brief analyzes housing systems across different countries, noting that ownership rates have declined, particularly among younger and lower-income groups. While homeownership remains dominant in the EU and OECD, disparities exist based on income. For example, in the US and France, ownership is significantly concentrated among wealthier households, which exacerbates inequality. Furthermore, the document highlights that housing affordability is influenced by local costs, credit access, and housing stock types.

The financing of housing significantly impacts affordability. The brief outlines two waves of financialization that have shaped housing markets. The first wave, leading to the 2008 financial crisis, was characterized by liberalized mortgage markets that inflated prices. The second wave, starting after 2012, saw institutional investors targeting housing as an asset class, further exacerbating affordability issues. Countries with regulated mortgage systems, such as Germany and Denmark, have managed to maintain stronger rental sectors and affordability.

To reclaim homeownership as a progressive policy, the brief suggests several strategies. These include expanding non-profit and public housing to ensure affordability, reforming housing finance to curb speculation, bridging the renter-owner divide through tenant protections, and reframing housing as a public good. It emphasizes the need for state capacity to implement these reforms effectively, highlighting successful examples from cities like Vienna and Paris that prioritize public housing.

The brief concludes that addressing housing affordability is essential for rebuilding trust in government and uniting low- and middle-income voters. It asserts that to make homeownership a cornerstone of social democracy, it must be treated as essential infrastructure rather than merely an asset. By adopting a progressive housing agenda, policymakers can address the current crisis and foster a more equitable society.