1 session 9 june 16, 2008 the meanings of “home” and attitudes towards homeownership ggr 357 h1f...
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Session 9
June 16, 2008
The meanings of “home” and attitudes towards homeownership
GGR 357 H1F
Geography of Housing and Housing Policy
DR. AMANDA HELDERMAN
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Announcements
Paper due this Friday before 5pm: [email protected] Drop box @ Office of the Department of Geography Both digital version (MS WORD only) and hard copy Make sure it is clear that it is for Amanda Helderman and that it is
term work for GGR357H1F
Summer job/ hard to make the deadline? You learned about this date on May 12. You have signed up for this
course so should be committed to your education You could turned it in earlier if Friday is inconvenient for you E-mail digital copy Fax hard copy: 416-946-3886, make sure it is clear that it is for
Amanda Helderman and that it is term work for GGR357H1F Late penalty 5% per day.
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Introduction
Many meanings of “home” Many meanings of homeownership Alternative meanings of the home… …such as economic activities in the home Societal developments (individualism) Implications for the place housing takes in personal
lives Understanding the meaning of home in developing
countries and for immigrants Consequences for residential relocations, housing
preferences, and search behaviour
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Meanings of home…
Definitions of housing according to Bourne, Dieleman etc. Physical aspects: shelter, bricks and mortar Economic good or commodity: housing can be
exchanged, has value Investment good or asset (wealth) Sector of the economy Social or collective good: home base/ node in social
networks access to other services Building block of neighbourhoods and communities Bundle of services
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Bundle of services
Physical facility Shelter Consumption of services: public, schools, environment
etc. Location/ accessibility
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Housing services
Shelter from the elements Value or wealth equity for owners Shelter from taxes (capital) Accessibility to services (e.g. schools), work,
neighbourhood Social status Rights to privacy, exclusion
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Home
Material dimensions Spatial dimensions Meaningful dimensions
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Material dimensions
Physical state State of repair Biological/ Chemical exposure Costs
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Spatial dimensions
Immediate environment Proximity to schools, recreation, health services,
employment opportunities
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Meaningful dimensions
Permanence/ stability Social status (housing tenure) Prestige Pride Identity Saunders, 1990 Place to venture out into the world Place of economic activity
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New functions of the home as a place for work or business (Ventakesh et al., 2003)
Activity Centre (household chores) Entertainment Centre (computer games, TV) Work Centre (telecommuting, working at home, home-
based businesses) Communication Centre (phone, E-mail) Shopping/ Financial Centre (e-shopping)
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New functions of the home as a place for work or business
Family Interaction Centre (meeting place for household members)
Information Centre (obtaining info from media) Learning Centre (e-learning) THE NETWORKED HOME
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Societal developments
Cultural changes Sociological changes: Individualism (increased
autonomy of individuals, both in and outside the workplace)
Labour market developments Longer working hours: increasingly difficult to combine
work with household tasks for many Status: longer work hours to make more money (rat
race)
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Role patterns
Trade off families: negotiations about tasks in the household
Rigid families: traditional role patterns
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Labour market developments
Changing labour markets Flexibility: increasing short term labour contracts Not constantly participating in the labour market:
sabbatical year, not always enough work in certain sectors of the economy
Increasing pressure on the job Combining different tasks of dual earners Flexible working hours, flextime More autonomous approach to work More self-employment (start in 50-85% of cases at
home)
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Economic activities in the home
Start-ups Limited costs, no search costs necessary Limited risks, knowledge of the area Easy to start, no search efforts necessary Home as an incubator for businesses
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Historical approach
Before the industrial revolution, the home was in most cases the place where people spend both their work hours and their leisure time
During and after the industrial revolution, the home became the place where people solely ate and slept
The new millennium: fast growth of technological possibilities such as high-speed Internet making telecommuting possible
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Spatial implications of home based businesses
Home more strongly becomes the centre of the entrepreneur’s/ household’s daily urban living space
Work, recreation, social activities all have the home as the central node
The home is the starting point of many activities but also the place to venture out into the world to undertake various activities
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Hägerstrand
Problem: many competing tasks, in household career and in labour career…
The home as the hub in a network of frequently visits nodes: work place, school, family, friends, shopping, recreation...
There are limits in time and space to what a person can do in a day and thus on a regular basis
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Hägerstrand
Constraints who limit human activity in time and space: Capability constraints (you can’t be in multiple
locations at the same time) Coupling constraints (combination of work, care and
leisure time may be difficult) Authority constraints (not everyone is allowed to go
everywhere at any time: opening hours, segregation)
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Home based businesses as a solution to time and place pressures
Combining tasks made easier Time efficiency of working at home (also a cost aspect
in a way) Limited travel time Low housing costs for business (often a reason for
starting a business at home)
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What type of businesses?
Activities that do not require that much floor space (indoors) Compare driving schools, other on-the-road
Many ‘invisible’ home-based businesses: book keeping in the attic
Amount of floor space use is correlated with ambition level and growth of the company
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What type of businesses?
Smaller average income than salaried workers Often older households/ individuals Duration of residence long Business and personal services. Financial advice Knowledge sector of the economy Taxi drivers Few have proper plans to grow beyond the home-based
business, the situation seems to be born from the convenience of easily combining tasks inside and outside the home
Also many agrarians
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What do the homes look like
Great diversity in types of homes that house home-based businesses
Many are not recognizable as a business Small software agencies who work for another
companies may have a small sign on the building but nothing else
Galleries, nail studios etc who rely on their clientele to visit them, may be a bit more visible
If they are visible, they often also are situated in a highly visible location relative to roads and to other buildings
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Rules and regulations
Threshold levels: <30% of area home No polluting activities in residential areas Many older neighbourhoods are simply designed for
residential purposes only (the legacy of rules and regulations from the past)
Not all government bodies are flexible enough to renew building permits where necessary
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Implications for planners
Diversity Mix of functions within home and within
neighbourhood; purposes should be complementary Prevention of functionally segregated neigbhourhoods
in urban centres Social cohesion and turnover Liveliness (social safety or at least a sense of safety) Vitality Better threshold population/ market for services in the
neighbourhood
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Implications for developers and planners
Helpful for planning neighbourhoods? Multi-functional building methods Flexible building techniques (high ceilings, easy to
make additions, moveable walls) Multiple uses of space Existing structure in neighbourhoods determine the
extent to which home-based businesses are succesful: enough space for entrepreneurship, not just for residential functions
Tenure structure: enough property in private hands
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Implications for developers and planners
Synergy possible if there are meeting places for entrepreneurs: face-to-face
Service points Time share offices (meeting customers) Specific building styles of multi-functional homes? Separate entrance for household members and clients? Flexible rooms/ ceilings
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Implications for developers and planners
Individual design Flexibility in design (family expansion or business
expansion, continuously renewed building permits) So far: demand from municipalities, not from
entrepreneurs
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Location specific capital
Hinders home based businesses to be footloose Suppliers Sunk investments (machines, adapting home for
business activities) Friends, family, local suppliers Personal business contacts
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Location specific capital
Keep-factors Embeddedness (Granovetter, 1985) Intangible assets: hard to take with you to a new place
(RISK!) Consequence: searching locally, minimizing risk.
Relocation decision not only household decision but also a business decision!
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Neo-classical approach to entrepreneurship
Homo Economicus Maximizing profit Minimize costs Perfect knowledge/ information Maximizer
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Behavioural approach
Homo psychologicus Decisions are made in an only partly rational fashion Satisfier
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Satisfier
Home based businesses generally less satisfied with housing for company than businesses located outside the home
Hard to keep work and private separate
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Consequences for search and relocation behaviour
Only 7% of home-based businesses is looking to relocate within 5 years
Some studies report 20% are expecting to relocate within 2 years, only 10% have concrete plans (less than household relocation!)
Not many home-based businesses generally foresee a move in the near future
Entrepreneurs more often have housing reasons as a motive for moving than business reasons
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Relocation behaviour
If the plans to move are business decisions, entrepreneurs do not necessarily want to remain home based
Attachment to the home often prevents the business relocation plan to be carried out
More than half of all home-based businesses who want to relocate, want to stay home-based
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Relocation behaviour
Sunk investments (machines, adapting home for business activities) are assumed to represent location specific capital that is known to act as a keep factor
But specific investments in the home for the business generally do not make a business more likely to stay in the same place than other businesses who have not made such investments while household situation, children do!
Entrepreneurs demand few specific housing characteristics for their business: size!
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Relocation behaviour
A need for space to expand is a push factor Housing characteristics may also be push factors A small home, a rented home, an apartment all make
relocation more likely
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Search behaviour
Home region is appreciated more than other nearby regions: neighbourhood effect
Where the entrepreneur is from may be the most deciding factor in deciding on a location for the business
Less search costs if entrepreneur focuses on his/her own region
Searching in own region minimizes risk Starters are strongly dependent on home advantage:
local external resources (friends, family, knowledge of suppliers etc.), does not automatically lead to optimal location choice
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Changes in search behaviour
Location advantages may change during the business life course
At the start, a company is less pre-occupied with the question where the business will locate and more with how to finance, the product, the market, rules and regulations, permits, and perhaps employees
Once started at home, the home often remains popular, even if the business (/household!) relocates
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In conclusion about home-based businesses
Location specific investments mostly play a role on the household level (schools children) and less on the business level (sunk costs)
Most want to continue as a home-based business after a potential relocation
This suggests that having a home-based business is a life style choice rather than an economic necessity
The characteristics of the home also are important: anchors in ‘neighbourhood economies’ seem to be owner-occupied and large enough to accommodate a household and a small business
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Developing countries
Extremely common to have a home-based business in many countries in the Third World
Informal-sector activities Cooking, arts and crafts
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Home-based businesses in Third World countries
More emphasis on shelter One in four families use their home for other activities
than just shelter (economic!) Many families only have one room at their disposal Crowding is a common problem Virtually all sectors are represented in the informal
economy, except heavy industry Female-headed households and larger households with
older, less-educated heads are most likely to use their home for income generation
Important for immigration countries
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Rules and regulations in Third World countries
Also surprisingly many parallels when it comes to official zoning
In compound houses however, these are largely ignored because of the scale of the phenomenon and lack of enforcement
Gvts. deter movers from buying homes if it is known that they will want the housing for income generation
If home-based businesses were condoned and recognized in building codes and regulations, it would make it easier to build housing
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Many parallels between both worlds
Home-based businesses in the Third World also are most often based in larger homes, although quality of homes with home-based businesses are not as good as regular homes
Businesses are location specific Life style choice/ Way of life Decision to move involves not only household decision
or business decision, but both!
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Meanings of homeownership
Both in the Western world and the Third World, home-based businesses and other such alternative meanings of the home are attached to owner-occupied homes
Stability Long-term commitment Build-up of equity
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Levels of homeownership (%)
1991 1996 2001
Montréal 46.7 48.5 50.2
Vancouver 57.5 59.4 61.0
Toronto 57.9 58.4 63.2
Ontario 63.7 64.3 67.8
Canada 62.6 63.6 65.8
From census 1991, 1996, 2001 & 2006: Statistics Canada
2006
53.4
71.0
67.6
65.1
68.4
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Meanings of homeownership
Approximately 68% homeownership in Canada in 2006 Free market principle dominant in Canada, so
important to discuss alternative meanings to homeownership from the ones we have discussed in previous sessions…
Which were…
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Individual advantages to homeownership
Building up equity from a home Housing quality/ Neighbourhood quality Customized aspects/ alterations Control of individual housing situation/ independence Continuity/ stability Status Emotional value
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Individual disadvantages to homeownership
Financial risk: housing market Financial risk: labour market position Responsibility for maintenance Impedes residential relocations:
– Financial commitment– Transaction costs– Sense of security, personal environment– Emotional attachment– Stable households
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Advantages of homeownership for governments
Stimulate individuals building up equity from their homes
Stimulate capital markets Increase supply of higher quality, owner-occupied
housing stock More adequate match of supply and demand Flexibility of labour markets? (Oswald, 1999;
Helderman, 2006)
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More links with the labour market
Housing has a strong link with the labour market Since the Second World War, homeownership has
gained popularity at a steady pace in most countries In 1989, a down-turn in the market took place: high
levels of arrears, stagnant or falling housing prices, and negative equity, particularly in the United Kingdom
Bad personal experiences Structural changes occurring in most labour markets
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Homeownership and the labour market
Three perspectives of changing perceptions of homeownership :
1. Cyclical model: Features of a depressed market are temporary cyclical phenomena that restore when the economy recovers
2. Pathological model: explains changing perception like a cyclical phenomena, not only based on changes in the economy, but also on personal history/ experiences (personal misfortune)
3. Combination of the above with a different outcome, because there are structural changes
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Structural changes in the labour market
Result from global competitive technical changes, the implementation of government policies to secure great deregulation, and so flexibility in the labour market
Increased opportunities for women Loss of full-time jobs Self-employment These minimized challenge for homeownership as an
ideal, but they represented a turning point for mortgagors: reassessment of their attitudes to owning and being able to pay
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Labour market and housing market
The reason why work and housing is so interwoven is that stability of (future) income is important for the long-term commitment that a mortgage entails
Links were found between attitudes towards homeownership, the current economic position of people, personal experiences, unemployment, and their expectations of the economic future
Not all periods of recession are found to be accompanied by less favourable attitudes toward homeownership
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Labour market and housing market
Periods of recession that were not accompanied by less favourable attitudes toward homeownership and a recovery of these came with larger and more structural changes
This points at the third perspective of changing perceptions of homeownership
Attitudes to homeownership are thus not only potentially influenced by access to employment and income, they may also be affected by security and stability of income
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Security and stability of income
Trends: temporary casual employment, short-term contracts, self-employment, propensity to unemployment, duration of unemployment, number of periods of unemployment
Structural and cyclical changes interact with each other, which makes it very difficult to determine how the processes work
Personal characteristics: aging people do not like the responsibility of maintenance e.g.
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Consequences of changing labour markets
Homeownership will remain popular, but may be less attractive at times
Arrears and repossessions may increase at times Perhaps a resurgence of a demand for renting will
occur People would like to place capital in other forms of
investment
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Saunders and the meaning of home
The most important meaning of home that Saunders mostly focuses on in his book “A nation of homeowners” is the desire of people to own: a desire for its own sake
Control of own housing situation (emotional expression of autonomy)
Respectability and status (Personal identity!) Security (against unemployment) Housing as an investment, securing an income in
retirement
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A desire for its own sake
“Deep-seated and natural disposition to possess key objects in the immediate and personal environment, although such explanations are rarely even considered in the social sciences (…)”
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Three different types of meaning of home
Coldly rational meaning (wealth, control, autonomy, income)
Deeply emotional meaning (security, personal identity) Set of cultural values (desire for possession nurtured
and sustained in cultural tradition)
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Saunders and the meaning of home
Independent of other people (classes) Blurring of class cleavages Search for respectability and status Homeownership grew at the expense of private rented
sector first and public sector second Housing represents both a means of shelter and a store
of wealth
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Reason for increases of homeownership after WWII
Referred to by Saunders as the homeownership revolution or counter-revolution of possession during and following the process of industrialization and urbanization
Rising real incomes and dual earners coupled with… … the availability of mortgage funds/ interest rates,
size of deposits, terms over which mortgage could be repaid
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Reason for increases of homeownership after WWII
Landlords selling out to sitting tenants Cultural, economic and political factors explain spatial
variations in the percentage of homeownership Falling cost of housing construction Increased number of women participating on the labour
market Family class identity breaking down, traditional
proletariat disappearing Political will to support homeownership (pressure from
council tenants, according to Saunders)
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Reason for increases of homeownership after WWII
1. Growth of building societies and collapse of private renting
2. Demographic changes (growth, marriage younger)3. Rising affluence (real incomes increased and so did
dual earner households)4. Government financial support5. Popular values and expectations6. DESIRE TO OWN
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Increase of homeownership
Saunders does not deny the effect of gvt support for homeownership or the role of economic fluctuation, but he doesn’t feel like this is the most important factor for increase in homeownership
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Homeownership is as a natural goal?
Saunders defies all possible arguments for deliberately manipulating the working class into homeownership
Would go against assumption that homeownership is a natural goal for people!
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Homeownership is as a natural goal?
Ideological effects of homeownership are encouraged to establish social stability and future political support
Create and reinforce divisions among the working class (easier to manage, no strong unions)
Long term debt would discourage any activity against employers
Encourages workers to withdraw from collective life and turn attention to home and the family
Creates a mass market for consumers (housing as a sector of the economy)
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Arguments Saunders for homeownership as a natural goal
Government has not intervened in the period of the fastest growth of homeownership
Before the war it was the middle class rather than the working class moving into homeownership and the middle class never posed a threat to social stability and the economic order
Saunders’ book was highly criticized when it was first published, one-sided view
Still very often cited work!
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Consequences for search and relocation behaviour
Saunders perceives the ownership of the home as something that the owner-occupier is deeply committed to by the ownership itself, and by the values he or she attaches to control, autonomy, identity, security and investment
These values invoke attachment to the home and therefore are expected to inhibit residential relocations
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Session 10June 18, 2008
•What should be the role of the state and other actors in the public domain?•REVIEW
DR. AMANDA HELDERMAN
GGR 357 H1F
Geography of Housing and Housing Policy
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Is housing on the radar of governments?
Many countries: government influence in the housing market straightforward
Shape of action: usually ‘providing social housing’
Canadian situation: The market mechanism is dominant Few social housing units But many challenges, housing issues on local and
federal levels such as housing affordability
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Is housing on the radar of governments?
Source: Legislative Assembly Australia
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Is housing on the radar of governments?
“Is it the government’s responsibility to provide some protection for things the market place is saying we’re not interested in? I don’t think so.”
Floyd Kvamme, president’s Advisory Council on Science and Technology
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Why interfere in the market?
Two perspectives of being critical of providing social housing in the Canadian situation:
If the market forms the main mechanism on the housing market, why interfere? Believe in the mechanism
If it is agreed upon that housing needs of all should be met in the market, but the market drives up prices so that some groups are pushed out of the housing market because not enough affordable housing is provided by the market mechanism
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Three purposes for public intervention
Allocation Stabilization Growth and redistribution
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Major issues for implementing housing policy
Priority given to housing policy Direct or indirect subsidies for housing Level of intervention (housing value, income level) Location incentives (y/n) for low-income households Administrative question: which level of government? Administrative methods and techniques need to
achieve housing objectives
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Why take the responsibility?
Individual well-being/ Population well-being Electorate/media: outcry Economic growth: disposable income, access to
employment, health, and inclusion are issues that need to be addressed to foster economic growth
Children’s health and well-being: the new generation’s future education, expectations, social engagement, and sense of responsibility in the community are impacted
Housing is a human right… (Universal Declaration of Human Rights )
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Access to human rights other than housing
Essential for promotion of sustainable urban development, human development and social cohesion
Human development, a process of enlarging people’s choices, leads to further realization of all human rights: economic, social, cultural, civil, and political
Individual and community well-being are intertwined, and human development requires strong social cohesion and equitable distribution of the benefits of progress to avoid tension between the two
Sustainable housing policy is one that creates a socially just housing system
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International context of housing policy
(See Ch. 27: Gilbert)
1. Paragraph 11(1) of the International covenant on Economic, Social and Cultural Rights – 1976– “The present covenant recognizes the right of everyone
to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. The state parties will take appropriate steps to ensure the realization of this right.”
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International context of housing policy
2. Article 22 of the Universal Declaration of Human Rights - 1948 (binding rights since 1966):
– everyone is entitled to “ the economic, social and cultural rights indispensable for his dignity and the free development of his personality”
Paragraph 25(1) of United Nations Universal Declaration of Human Rights:
– “everyone has the right to a standard of living adequate for the health and wellbeing of himself and of his family, including food, clothing, housing, and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control”
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International context of housing policy
3. United Nations Housing Rights Programme, 2002 UN-Habitat & Office of the United Nations High
Commissioner for Human Rights The programme aims to undertake action to ensure
that governments take appropriate action to promote, protect and ensure realization of the right to adequate housing
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Realization of the right to adequate housing…
Packages of policies and practices rather than single right
Ensuring secure tenure Preventing illegal and mass evictions Removing all forms of discrimination Promoting participation Gender equity Freedom of information, especially with regard to land
markets
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Challenges
Many laws and regulations in place, but not always implemented and enforced
– Often more a statement of social and political intention than a feasible objective in the foreseeable future
Shift focus to rented segment of the market– Owning is not the most logical option at every stage of the
life course Many levels of study and several levels of government
that do not always match– Many issues on housing markets are observable on a local
level, but hard to study and address on a federal level Make implementing and enforcing the right to housing
realistic
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Challenge 2: Why more attention for rented housing?
Offers choice/ mobility Provides accommodation for low income households
and households who do not qualify for housing subsidies
Contributes to economic development through property development
Sustains ownership through sub-letting May improve urban areas through facilitating urban
renewal Can have a positive effect on female economic
empowerment
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Challenge 4: Implementing and enforcing the right to housing
“Housing rights Legislation” - UN-Habitat Arrange security of tenure in informal housing Protect people from forced eviction Prevent discrimination Provide affordable housing for the poor Arrange accessibility for the disabled Address housing restitution Focus on habitability Target homelessness Address land rights
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Housing tasks in Canada
Basis of housing policy from the 1960s till the mid-1980s has been a focus on the human right to adequate housing for all Canadians
Canada has acknowledged the right to housing, and has implemented it, but Canada is not enforcing it as well as suggested by UN-Habitat
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Canada’s track record
Canadians enjoy a singularly high standard of living and Canada has the capacity to achieve a high level of respect for all Covenant rights
Absence of an official poverty line make it difficult to hold the federal, provincial and territorial governments accountable to their obligations under the Covenant
Governments policies have denied people and their children adequate food, clothing and housing
Inadequate legal protection of women’s rights
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Canada’s track record
Aboriginal people’s housing with a lack of safe and adequate drinking water and dwellings in need of major repair for lack of basic amenities
Fewer low-income families are eligible for benefits Canada has allowed the problem of homelessness and
inadequate housing to grow to such proportions that the mayors of Canada’s ten largest cities declared homelessness a national disaster
Income assistance (provincial social assistance and other) have clearly not been enough to cover rental costs for the poor
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Canada’s track record
Limited availability of affordable housing creates obstacles for women to escape domestic violence
Minimum wage is not sufficient to have an adequate standard of living
Exacerbated poverty during times of economic growth 20% of Canada’s population is functionally illiterate Recommendations: national programme with
designated cash transfers for social assistance and social services, establish an official poverty line, federal and provincial agreements to better ensure adequate standards of living
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Federal housing tasks
CMHC Ministry of Human Resources and Social Development
(responsible for CMHC) Ministry of Public Works and Government Services Neither ministries have proper responsibility for
housing, due to the constitutional responsibility for housing
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Federal level bills and acts
Bill C-416: House of Commons of Canada, 2001– Housing Bill of Rights, effective 2003
Protecting human rights by providing adequate, accessible and affordable housing and security in its enjoyment, to be achieved by adopting financial policies and the establishment of a national housing strategy
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Housing Bill of Rights: “Adequate”
Legal security of tenure Availability of services, materials, facilities,
infrastructure Affordability Habitability Accessibility Location Cultural adequacy
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Housing Bill of Rights 2001
Right to security of tenure against arbitrary eviction Right to appropriate housing (special needs) Right to safe and healthy environment Right to home free of violence, threat of violence or
other harassment Right to enjoy respect of privacy Right to economic security resulting from protection of
rent increases, property tax increases or other housing cost increases that are
– Sudden or excessive– Intended to yield unreasonable profit– Having the effect of diminishing the other rights
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Enforcement Housing Bill of Rights
Anyone that contravenes, threatens or takes away an individual right:
Fine of not more than $5000 for first offence Fine of not more than $10,000 or imprisonment for not
more than 6 months, or both, for second or subsequent offence
Threatening the rights of more than one individual constitutes a seperate offence in respect to each individual
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Implementing Housing Bill of Rights
Responsible: Minister of Public Works and Government Services
Develop and adopt policies to ensure that the cost of housing in Canada does not prevent or threaten the attainment and satisfaction of other basic needs
Policies must provide for financial assistance for rent for those who otherwise are not able to afford the right to rental housing established in this act and availability of finance and credit without discrimination
Effective monitoring of vulnerable and disadvantaged groups
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Implementing Housing Bill of Rights
Minister must develop and adopt a national housing conference strategy and programs to carry it out
Adequate, affordable, accessible and not for profit housing in case of those who cannot otherwise afford it
Housing should reflect the needs of local communties... ...and should not cost more than 30% of the occupant’s
pre-tax income
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Provincial housing tasks - Ontario
Ministry of Municipal Affairs and Housing Minister: John Gerretsen (2003-2007) -> Jim Watson (2007- present) Canada-Ontario Affordable Housing Program Agreement
(until 2009, fed election year)– Rent supplements and Housing Allowances– Rental and supportive housing– Northern housing– Homeownership
The Residential Tenancies Act (2006) replacing the Tenant Protection Act (1997)
Landlord and Tenant Board replaces the Ontario Rental Housing Tribunal on January 31, 2007
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Provincial housing tasks - Ontario
Ontario Mortgage and Housing Initiative Resource Centre
Social Housing Reform Act, 2000 Social Housing Business Research analysis Housing research
(often carried out by researchers at universities)
Monitoring the affordable rented supply
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Municipal housing tasks
Toronto's Affordable Housing Action Plan Mayor’s Housing Summits 2002 & 2004 Research and monitoring Affordable Housing Committee Residential Rehabilitation Assistance Program 2006 Canada-Ontario Affordable Housing Program
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Some of the City of Toronto’s housing publications…
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Roles of governments
Financiers Insurers Regulators Speculators Administrators Builders Landlords Destroyers
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Canada-Ontario Affordable Housing Program
CAN Financier
InsurerRegulator
ON FinancierRegulator
TO FinancierAdministrator
(Builder)
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Local solutions...
Due to the many levels of government and the decentralization of the responsibility for housing, it is possible that solutions on the individual level contributes to a loss of control on the federal level
‘Policy drift’ On a local level, it is easier to identify housing issues
and come to a local solution
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Different circumstances/ context
Different ways of intervention in different circumstances and different policy instruments may still lead to the same housing issues
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Northwestern Europe
Traditionally interventionist compared with North America
While leaving developments largely up to the market may lead to a lack of affordable housing, intervening in housing policy may have the same result
108
Example of the Netherlands
Since the Second World War a change from a free market mechanism to close control by government agencies
Modest decentralization: zoning authorities, design and implementation of building codes, condemning buildings
Passive controls Proliferation of policies and programs seems to have
done little to alleviate existing inequities Supply side: reactions of investors/owners contradict
housing policy goals Demand side: resort to own ingenuity to acquire
accommodation at an affordable price
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After WWII
Temporary emergency controls to deal with quantitative housing shortage
New construction almost had come to a halt Many homes destroyed by war action
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Instruments after WWII
Controls on investment, prices, wages: economic reconstruction
Rent controls: housing considered essential for the success of economic policy
Modest construction: saving capital for scarce investments
Large loans to nonprofit housing, realizing a record high output of low-income rental units
Cost-reduction subsidies for construction tempted investors to build
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Instruments after WWII
Would be homeowners were tempted with grants The subsidized sector boomed, while the non-
subsidized private sector decreased Compensation of negative cash flows for investors Quota system for regional inequalities: allotted
construction permits in proportion to housing needs Successful policy! Production surpassed the targets
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Exogenous changes
Demographic Income Housing shortage thus became more political Rents for existing homes increased slowly Rents for new homes increased more rapidly due to
high construction costs Mismatch between housing costs for new and
established households Mobility rates depressed, low level of turnover Qualitative housing shortage
113
Advantages of large social rented sector
Large social rented sector remained an acceptable option
Good reputation for a mixed group Less stigmatization than in countries with a very small
social rented sector
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1960s
Qualitative shortage diminished which made deregulation possible
Controls were lifted in increasing number of municipalities
Return to free market system to decrease burden of housing subsidies that weighed heavily on government budget
Controls not abandoned immediately: pricing and subsidy systems made more attractive for private investors
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1960s
Even though the market weakened at the end of the 1960s, the construction boom was sustained by giving out permits for subsidized housing to be realized by the private sector
This delivered monotonous residential areas with high rise multi-family homes, a slowly increasing vacancy rate and a diminishing housing shortage
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1970s
Deregulation was halted because of political changes Expensive dwellings de-controlled Spatial mismatch between vacancies and housing
needs Newly completed buildings are too expensive b/c rising
construction & utility costs and increasing interest rates Investors’ negative cash flows is no longer
compensated, so they have three options…
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Options investors
Upgrade property Convert to deregulated, expensive housing Liquidate portfolios
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1975
The quantitative shortage is overcome
Vacancy rate beyond 2% Qualitative shortage rising Squatting
No extensive subsidies and little new construction Condo-conversion is a concern because owners may
not lead as much to social stability, equity and property maintenance as people think. Regulation by permits
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In conclusion
The completion of many moderately priced homes of relatively high standards, improved the housing situation of low & medium income households
This has been a major achievement of this government’s policy
Had government not intervened, the housing shortage would have led to high house prices which would have forced a drop in construction for low-income groups
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Motivation for intervention
Economic recovery was the motivation for intervention. The motive to keep intervening was the unbalanced market. Housing was also considered important in the functioning of society. A shift to the private market would have brought about other issues
Intervention on behalf of lower-income groups is possible, but at a price. The majority of the Dutch population accepts that price
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Differences and parallels
Diff: The Dutch have shown an active involvement in allocation of housing, have contributed more funding and priority to housing policy, which was historically determined
Parall: Many similar issues as in Canada have played a role such as conversion of rented housing, substandard housing quality, emergence of social segregation, qualitative shortage of housing, inadequate subsidy systems to face issues
Most European countries have a policy of large-scale intervention
But serious problems persist despite this
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Neither?
Neither interventionist strategy, nor free market approach deals successfully with ALL HOUSING PROBLEMS
Housing remains a persistent and divisive social issue in all Western countries, even though they are circumstantially and subjectively defined
All countries have problems with their qualitative housing stock
1. Failures of the market?2. Originated in government intervention?
THE END
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REVIEW: How to study for the exam
Focus a bit more on the sessions after the midterm Slides should tell you which of the readings are most
important A bit more literature related questions than last time Identify overlap between slides and readings and focus
on those (sub)topics
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6 processes of neighbourhood change
Occupancy turnover and the movements of households within the housing stock
Filtering process and changes in housing quality Housing and neighbourhood change: arbitrage Progression of housing vacancies through the stock
(vacancy chains) Spatial variations in house price changes Revitalization and the return-to-the-city movement:
gentrification(Bourne, 1981)
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Filtering
Any change in the relative position of the housing unit or the household in the inventory, or matrix, of housing units in the area: filtering up and filtering down
History concept: Innermost rings in the city were occupied by a succession of social groups of decreasing income.
Each zone filtered down over time
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Arbitrage
Placed central are the conditions and mechanisms that move boundaries between neighbourhoods of different socio-economic status and ethnic differences in an unstable housing market
This approach unites elements of neighbourhood change with sub-market interrelatinships, filtering and housing preferences
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Vacancy Chains
Perspective related to filtering Directly links housing units involved in household
relocations ‘Vacancy’ is being displaced with every step Weakness of the method: chains are short when there
are a lot of new households and in-migrants, and where demolitions take place, chains are shorter when new public sector housing is constructed
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Gentrification
The investment of urban space for the use of a more affluent clientele, made possible by:
Demographic shifts (dink, smaller families) Employment (dual income): Disposable income and
share to spend on housing has increased Costs suburban housing has increased since the 1970s,
while costs of commuting increased Shifts in tastes and housing preferences
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Mechanisms of gentrification
Culture approach: gentrification is the spatial expression of a critical class politics
Consumer dominance Neighbourhoods gentrify because of changing tastes
and preferences
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Mechanisms of gentrification
Economics placed central: gentrification is caused by the availability of inexpensive real estate.
Rent gap theory: many neighbourhoods experienced disinvestment in inner-city, leading to a decline in potential rent (=highest and best use)
Gentrification takes place where the potential rent is far above the actual rent supply and concentration of devalorized land is necessary
1990s recession brought an end to large scale gentrification
Demographics: more maturing families interested in suburbs
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Policy issue 1: Housing allocation
The distribution of housing among social groups and households at a given location
Two principle mechanisms of housing allocation: through the private market and through the public sector
Private market: price as mechanism, determined by the ability to pay, efficiency is the main objective
Public domain: competition and cooperation as mechanisms, based on individual and collective needs, equity is the main objective
Different criteria for same goals (costs, prices, stock attributes)
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The public allocation system in Canada
Welfare pluralism: centralized welfare system has been superseded a decentralized system
Proliferation of agents: much variation in the allocation of public housing, social housing and assisted market housing
Top down bottom up Policy drift: local outcomes may be a far cry from
program intentions
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Social housing allocation practices in North-West European countries
Production and allocation of housing traditionally firmly in the hands of public agencies
Long tradition of housing allocation systems, especially of inexpensive part of stock: historical context
Some systems offer little freedom of choice and long, passive, waiting periods. Transparent, results can be checked, more objective, less discriminating or exclusive
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Policy issue 2: Housing affordability
Consensus on it being one of the main housing issues in Canada
Measure of housing conditions: Core housing need Two-step process of assessment in relation to three
standards: Adequacy, suitability, (and, if one is not met: ) affordability
Spatial differences and their relevance for housing market processes (prices, job opportunities, local tenure structure of the housing stock)
Levels of scale and studying housing issues
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Major housing issues
Housing allocation Housing affordability Policy tilted towards owner-occupancy Challenge: many levels of government
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Underlying factors of affordability problems
Geography Demography (age and number of members household) Migration/immigration/ethnicity (limited knowledge of
housing market and discrimination) Income recipients (number of potential income earners
in household) Income source (self-employment, wages and salaries
etc.) and income polarization Employment and gender Education (skills and abilities) Housing tenure (homeownership insulates from price
shocks)
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Policy solutions per housing issue:Housing affordability
No easy solution! Symptom of a deeper rooted problem? Acknowledgement of the role of poverty is a start Obstacles in government policy and market should be
taken away as much as possible Concepts and goals should be defined clearly Adjustments in minimum wage (may in some cases
lead to less jobs though!)
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Policy solutions per housing issue:Housing affordability
Offering pool of incentives for which developers have to compete: quid pro quo
Continuation of shelter allowances (and to a lesser degree rent supplements)
Tolerating conversion in the direction of cheaper rented homes, facilitating renovation, and informal housing
Balanced approach of supply and demand side measures, and a more direct commitment of governments to affordable housing investments
Co-ops could be given a more substantial influence and role
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Policy solutions per housing issue: housing allocation
A clearer distinction between housing access and housing allocation
In stead of leaving allocation completely up to the market, focus attention on lower-income families that are not served adequately by the housing market itself
More attention for rented housing stock Waiting lists are increasingly replaced by lotteries,
which are said to lead to more transparent and fairer allocation
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Policy solutions per housing issue: housing allocation
Choice based allocation models seem to be positively received by both governments and home seekers and could well apply even in a market based system, if implemented on target groups
Third parties have produced good quality proposals in the past
Realization that implications of welfare pluralism (policy drift) may not be a bad thing in all cases
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Policy solutions per housing issue: many levels of government
Municipalities have a good eye for the daily practice of housing issues
Municipalities are also diverse Municipalities do not have sufficient funding to tackle
socio-economic and housing issues of this scale Provincial funding and regional expertise Programs need to meet national goals to be
successfully implemented, coordinated, and enforced
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Policy solutions per housing issue: many levels of government
Responsibility is taken on a federal level in the international community (United Nations declaration of human rights and International covenants)
REVIEW
THE END
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Thank you all!
Thank you for your presence, input, and efforts in and for this course.
Especially for the fantastic papers that I will enjoy reading.
Good luck with the exam and everything after!
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Literature
- Doling, J. & J. Ford (1996), The new homeownership: the impact of labour market developments on attitudes toward owning your own home. Environment and Planning A, pp. 157-172.
- Saunders, P. (1990), How the meek inherited the earth. In: A nation of homeowners. Chapter 1. London: Unwin Hyman. p. 11-56.
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Literature
- Sinai, I. (2001), Intraurban housing mobility in a traditional West-African city. Shelter or business decision? Urban Studies, 38/3, pp. 535-540.
- Soldressen, L.S. & S.S. Fiorito (1998), An exploration into home-based businesses: data from textile artists. Journal of Small Business Management, 36 (2), pp. 33-45.
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Literature last class
- Bourne, L.S. (1981), The role of government: housing policies and programs. Chapter 9. p. 191-213.
- Porter, B. (2005), The right to adequate housing in Canada. In: J.D. Hulchanski & M. Shapcott (eds. 2005), Finding room. Policy options for a Canadian rental housing strategy. Chapter 3. p. 69-80.
- Bourne, L.S. (1981), Alternative housing systems : quasi-market, socialist and third world. Chapter 11. p. 235-249.
- Hulchanski, D. & M. Shapcott. (2004), Finding room: Policy options for a Canadian rental housing strategy. Toronto: University of Toronto Press. Chapters 20-22.