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Housing Markets and Welfare State Transformations: How Family Housing Property is Reshaping Welfare Regimes

Final Report Summary - HOUWEL (Housing Markets and Welfare State Transformations: How Family Housing Property is Reshaping Welfare Regimes)

In recent decades, housing has become deeply embedded in both the economic security of individual households and the wider political economy. Housing wealth and its accumulation have become a focus of family welfare strategies, contributing to the commodification of the home and amplifying the influence of housing markets on household welfare conditions. The private property assets of home-owning households thus not only represent an implicit welfare pillar in terms of how families share their homes, but also an explicit means to subsidize retirement through ‘welfare switching’ strategies, where housing wealth is tapped to enhance private welfare consumption. Public policy has also demonstrated a growing alignment around home ownership as a means of not only stimulating economic growth, but also sustaining welfare state restructuring and off-setting the reduction off state support.

Nonetheless, contemporary understanding of housing as a social dynamic that can effectively shape the welfare economies of developed societies is relatively limited. The HOUWEL research thus addressed developments in housing and welfare systems across a range of societies where shifting relationships between families and their homes appear to correspond with the broader restructuring of welfare regimes. This novel research involved macro level studies of policy change and socioeconomic restructuring as well as qualitative and quantitative analyses of shifts in individual housing trajectories, household investment and welfare strategies, and the everyday practices of family based residential property ownership.

One key finding has been that emerging housing market conditions in combination with labour market restructuring and reduced social spending are undermining transitions into home ownership among younger adults. This is not only undermining the capacity of younger cohorts to accumulate housing assets necessary for economic security in later life, but also inhibiting life-course transitions more generally. Moreover, our research identified a number of demographic and geographic inequalities emerging in the distribution of housing equity and property wealth that are reshaping contemporary social and economic relations. In contrast to declining home ownership among new households, older cohorts, especially postwar baby-boomers, have been advantaged – albeit unevenly – by historic housing market trends with many not only becoming un-mortgaged homeowners, but also often private sector landlords. Nonetheless, as our qualitative studies illustrated, family dynamics remain central with increasing housing wealth resources flowing, where available, from parents to their offspring, but with local context shaping this process. Our comparative research focus revealed the interplay of factors that influence the function of family owned housing property as an element of a wider welfare system, as well as substantial variation between regimes.

There are three conclusions that can be distilled from our research. First, whereas increasing home ownership and property values have enhanced welfare security in some cases, they have also reshaped the distribution of economic inequalities and social risks. In some contexts, urban housing markets appear to be reinforcing precarity of a growing class of people excluded or on the margins of, property ownership. Policy responses, however, continue to support the promotion of home purchase in the face of declining ratios of secure owner-occupiers. Second, despite increasing pressure to do so, un-mortgaged home-owners face serious challenges in capturing the wealth in their homes in order to sustain their quality of life as they age. Mechanisms like, for example, downsizing and equity release markets are typically inadequate to the needs of homeowners and also compete with growing demands to help children in terms of either co-residence or assistance with home purchase. Third, since the Global Financial Crisis, most housing markets have been revived by equity flowing from other areas into property purchases, reflecting an more intensive orientation to housing as a means to store or generate wealth. Flows have also become increasingly cross-national and often focused on submarkets, especially urban ones. A particular concern is not just the revival of intensive house price inflation and diminishing affordability, but also the continued reliance of economies and welfare systems on the circulation of homes as commodities and assets. Such practices make both families and the wider economy enormously dependent on housing markets and property wealth accumulation conditions that are non-durable.