Housing Market Regulation Has Contributed to the Worldwide Triumph of Home Ownership

The present report presents new historical data based on country comparisons and research results regarding rent control and its long-term effect on the home ownership rate in 27 countries. Policy measures of rent control, protection against eviction, and housing space management have been widespread in most of the countries studied—particularly in continental Europe—in the past 100 years. At the same time, the rate of home ownership in those countries has steadily risen in the long term. The present analysis shows that in the past century, the triumph of home ownership has not only been the result of relevant incentive measures and financial market liberalization. Indirectly, it is also due to rent control

Rent Price Control – Yet Another Great Equalizer of Economic Inequalities? Evidence from a Century of Historical Data

The long-run U-shaped patterns of economic inequality are standardly explained by basic economic trends (Piketty’s r>g), taxation policies, or “great levelers,” like catastrophes. This paper argues that housing policy, in particular rent control, is a neglected explanatory factor in understanding overall inequality. We hypothesize that rent control could decrease overall housing wealth, lower incomes of generally richer landlords, and increase disposable incomes of generally poorer tenants. Using original long-run data for up to 16 countries (1900-2016), we show that rent controls lowered wealth-to-income ratios, top income shares, Gini-coefficients, rent increases, and rental expenditure. A counterfactual analysis using micro-data from the Luxembourg Income Study shows that rent controls could reduce rental expenditure of mostly lower-income tenants and rental incomes of mostly higher-income landlords. Overall, rent controls must be strict in order to have tangible effects and, historically, only strict rent controls have significantly reduced inequalities. The paper argues that housing policies should generally receive more attention in understanding economic inequalities

Does Social Policy through Rent Controls Inhibit New Construction? Some Answers from Long-Run Historical Evidence

The (re-)introduction of rent regulation in the form of rent controls, tenant protection or supply rationing is back on the agenda of policymakers in light of rent inflation in many global cities. While rent control as social policy promises short-term relief, economists point to their negative long-run effects on new construction. This paper present long-run data on both rent regulation and housing construction for 16 developed countries (1910-2017) and 44 developing countries since the 1980s to confirm the economists’ view generally, albeit with certain reservations. The negative effect of regulation can be offset by exemptions for new construction, by compensating government construction and by a flight of new construction into the owner-occupied sector. The overall magnitude of the effect is therefore not as high as expected and shows non-linearities. But, although rent control is usually introduced with good social-policy intentions, it generally risks to crowd out its object of regulation through inhibiting new construction.1 Introduction 2 Determinants of residential construction 3 Data 3.1 Housing construction intensity 3.2 Control variables 3.3 Regulation indices 4 Econometric methodology 5 Results 5.1 Descriptive findings 5.2 Multivariate estimations 6 Discussion and conclusion Literature Figures and table

The Rise and Fall of Social Housing? Housing Decommodification in Long-Run Perspective

The comparative study of housing decommodification lags behind classical welfare state research, while housing research itself is rich in homeownership studies but lacks comparative accounts of private and social rentals due to missing comparative data. Building on existing works and various primary sources, this study presents a new collection of up to forty-eight countries’ social housing shares in stock and new construction since the first housing laws around 1900. The interpolated benchmark time series generally describe the rise and fall of social housing across a residual, a socialist, and a Northern-European housing group. The decline was steeper than for the classical welfare state, but the degree of erosion was surprisingly small in some countries where public housing associations remained resilient. Within the broader housing welfare state, social housing correlates positively with rent regulation and allowances, but negatively with homeownership subsidies and liberal mortgage regulation. A multivariate analysis shows that social housing is rather explained by housing shortages and complementarities with rental and welfare policies than by typical welfare state theories (GDP, political parties). Generally, the paper shows that conventional housing typologies are difficult to defend over time and argues more generally for including housing decommodification in welfare state research.Die vergleichende Forschung zur Dekommodifizierung des Gutes Wohnen ist bisher von der klassischen Wohlfahrtsstaatsforschung vernachlässigt worden. Die Wohnungsforschung selbst ist wiederum reich an Studien zum Wohneigentum, aber vergleichende Darstellungen zu privaten und sozialen Mietwohnungen sind aufgrund fehlender komparativer Daten wenig erforscht. Aufbauend auf bestehenden Arbeiten und verschiedenen Primärquellen stellt diese Studie daher zunächst eine neue Datensammlung von bis zu 48 Ländern vor, die den Anteil der Sozialwohnungen an den Beständen und Neubauten seit den ersten Wohnungsbaugesetzen um 1900 erfasst. Die interpolierten Benchmark-Zeitreihen beschreiben im Allgemeinen den Aufstieg und Fall des sozialen Wohnungsbaus in einem residualen, sozialistischen und einem nordeuropäischen Wohnungsregime. Der Rückgang war steiler als beim klassischen Wohlfahrtsstaat, aber überraschend resilient in Ländern mit öffentlichen Wohnungsbaugesellschaften. Innerhalb des umfassenderen Wohnungswohlfahrtsstaates korreliert der soziale Wohnungsbau positiv mit der Regulierung von Mieten und Wohngeldzahlungen, aber negativ mit Wohneigentumssubventionen und liberalen Hypothekenregelungen. Eine multivariate Analyse zeigt, dass der soziale Wohnungsbau eher durch Wohnungsknappheit und funktionale Komplementarität mit Miet- und Sozialpolitik als mit typischen wohlfahrtsstaatlichen Faktoren (BIP, politische Parteien) erklärt wird. Generell zeigt der Beitrag, dass herkömmliche Wohnungstypologien im Laufe der Zeit nur schwer zu verteidigen sind, und plädiert dafür, die Dekommodifizierung von Wohnraum stärker in die Wohlfahrtsstaatsforschung einzubeziehen.Contents 1 Introduction 2 Social housing: What it is and how to measure it? 3 Descriptive results 4 Bivariate findings: Social housing and the broader housing welfare state 5 Multivariate: The determinants of social housing provision 6 Conclusion Appendix Reference

The Rise and Fall of Social Housing? Housing Decommodification in Long-Run Comparison

The comparative study of housing decommodification lags behind classical welfare state research, while housing research itself is rich in homeownership studies but lacks comparative accounts of private and social rentals due to missing comparative data. Building on existing works and various primary sources, this study presents a new collection of up to forty-eight countries’ social housing shares in stock and new construction since the first housing laws around 1900. The interpolated benchmark time series generally describes the rise and fall of social housing across a residual, a socialist, and a Northern-European housing group. The decline was steeper than for the classical welfare state, but the degree of erosion was surprisingly small in some countries where public housing associations remained resilient. Within the broader housing welfare state, social housing correlates positively with rent regulation and allowances, but negatively with homeownership subsidies and liberal mortgage regulation. A multivariate analysis shows that social housing is rather explained by housing shortages and complementarities with rental and welfare policies than by typical welfare state theories (GDP, political parties). Generally, the paper shows that conventional housing typologies are difficult to defend over time and argues more generally for including housing decommodification in welfare state research.Introduction Social housing: What it is and how to measure it? Descriptive results Bivariate findings: Social housing and the broader housing welfare state Multivariate: The determinants of social housing provision Conclusion Supplementary material Competing interests Footnotes Reference

Noise Expectation and House Prices

In this paper, we examine the effects of an airport expansion on the prices of houses and flats located under the planned flight corridors. We focus on the role of expectations about the exposure to noise and find that proximity to the planned corridors significantly reduces real estate prices in the affected areas, by around 41% to 60%, depending on the sample. Hereby, the various plans of expanding Berlin-Brandenburg International airport are used as a source of exogenous variation

The Hidden Homeownership Welfare State: An International Long-Term Perspective on the Tax Treatment of Homeowners

Welfare is traditionally understood through social security decommodifying labor markets orsocial investment policies. In the domain of housing, however, welfare for homeowners is largelyhidden in the tax codes’ fiscal exemptions. Based on a content analysis of legislation, this pa-per introduces a novel yearly database of 37 countries between 1910 and 2020 to uncover the“hidden welfare state” of taxes on imputed rent, deductibility of mortgage payments, housingcapital gains tax and VAT on newly built dwellings. Summary indices of homeownership at-tractiveness and neutrality of the tax code show that fiscal homeownership policies have beenin decline until the 1980s and risen ever since. They are in place where finance is liberally andlabor restrictively regulated. Contrary to the classical welfare state, they are not associatedwith an economic logic of industrialism or left-wing governments, but a rent-regulation alter-native of Common-Law jurisdictions and smaller countries. As welfare for property owners, thelogic of fiscal homeownership welfare diverges from the classical welfare for the laboring classes.1 Introduction 2 Explaining homeowner supporting policies 3 Tax treatment of the owner-occupied housing 3.1 Imputed rent tax 3.2 Tax deductibility of mortgage payments 3.3 Capital gains tax 3.4 VAT on the new dwellings 4 Quantification of taxation attractiveness and tenure neutrality 4.1 Leximetric approach to taxation policies 4.2 Our approach 5 Results: descriptive and explanatory assessment of homeownership welfare 5.1 Individual tax indices 5.2 Correlation with other regulation indices 5.3 Regression analysis 6 Discussion and conclusion Literature Appendix A: Robustness tests Appendix B: An overview of the evolution of the country-specific homeowner-ship tax treatment Argentina Australia Austria Belgium Brazil Canada Chile Colombia Czech Republic Denmark Estonia Finland France Germany India Ireland Israel Italy Japan Latvia Lithuania Luxembourg Netherlands New Zealand Norway Peru Poland Portugal Russia South Africa South Korea Spain Sweden Switzerland Turkey United Kingdom US

The Hidden Homeownership Welfare State: An International Long-Term Perspective on the Tax Treatment of Homeowners

Welfare is traditionally understood as social security decommodifying labour markets or as social investment policies. In the domain of housing, however, welfare for homeowners is largely hidden in the tax codes’ fiscal exemptions. Based on a content analysis of legislation, this article introduces a novel yearly database of 37 countries between 1901 and 2020 to uncover the “hidden welfare state” of taxes on imputed rent, deductibility of mortgage payments, housing capital gains tax, and value-added tax on newly built dwellings. Summary indices of homeownership attractiveness and neutrality of the tax code show that fiscal homeownership policies have been in decline until the 1980s and risen ever since. They are in place where finance is liberally and labour restrictively regulated. Contrary to the classical welfare state, they are not associated with an economic logic of industrialism or left-wing governments. They rather are an alternative to rent regulation used by Common-law jurisdictions or smaller countries. As welfare for property owners, the logic of fiscal homeownership welfare diverges from the classical welfare for the labouring classes.Introduction Explaining homeowner supporting policies Tax treatment of the owner-occupied housing Quantification of taxation attractiveness and tenure neutrality Results: descriptive and explanatory assessment of homeownership welfare Discussion and conclusion Supplementary material Data availability statement Footnotes Reference

Die Regulierung des Wohnungsmarkts hat weltweit zum Siegeszug des Eigenheims beigetragen

Der Beitrag stellt neue historische ländervergleichende Daten und Forschungsergebnisse zur Mietregulierung und ihren langfristigen Auswirkungen auf die Wohneigentumsquote in 27 Ländern vor. Die Regulierung von Mieten, der Kündigungsschutz und die Wohnraumlenkung wurden als Maßnahmen der Sozialpolitik in den meisten untersuchten Ländern, und dabei insbesondere in Kontinentaleuropa, im vergangenen Jahrhundert verbreitet. Gleichzeitig ist die Wohneigentumsquote in diesen Ländern im langfristigen Trend stetig gestiegen. Die Analyse zeigt, dass der Siegeszug des Eigenheims im letzten Jahrhundert nicht nur das Ergebnis von entsprechenden Fördermaßnahmen und der Finanzmarktliberalisierung war, sondern auch auf die Mietregulierung zurückgeht

Assessing the Real-Time Informational Content of Macroeconomic Data Releases for Now-/Forecasting GDP: Evidence for Switzerland

This study utilizes the dynamic factor model of Giannone et al. (2008) in order to make now-/forecasts of GDP quarter-on-quarter growth rates in Switzerland. It also assesses the informational content of macroeconomic data releases for forecasting of the Swiss GDP. We find that the factor model offers a substantial improvement in forecast accuracy of GDP growth rates compared to a benchmark naive constant-growth model at all forecast horizons and at all data vintages. The largest forecast accuracy is achieved when GDP nowcasts for an actual quarter are made about three months ahead of the official data release. We also document that both business tendency surveys as well as stock market indices possess the largest informational content for GDP forecasting although their ranking depends on the underlying transformation of monthly indicators from which the common factors are extracted