The project investigates how asset-based welfare policies, residential market volatility, stratified accumulation and vulnerability impinge upon the geography of inequality in property markets. Since the 1990s, housing prices have increased faster than the income of buyers, becoming a driver of social polarisation and household vulnerability. We investigate links bteween socio-spatial inequality, asset capitalisation, instability and vulnerability in residential housing markets
An empirical study of the reinforcing factors of inequalities, conceptualized as feedback between prices, types of markets, and housing finance regimes.
We investigate to what extent contemporary social inequality is shaped by one’s relationship to spatially stratified housing markets. We hypothesise that the flow of real estate investments and residential housing production are predicated upon intensifying the financial stratification of urban inequalities at the neighbourhood level. This complex socio-spatial layering is what we refer to as a housing finance regime (HFR), or a system of national and local incentives for accessing credit associated with the spatial variability of income and housing prices. Using disaggregated datasets on property transactions, household surveys, and homeowner insights on residential mobility, we propose to analyse the economic spatial and financial trajectories of households in relation to housing price dynamics among three French cities (Paris, Lyon, Avignon). This project provides a better understanding of how housing finance regimes (HFR) play out ‘on the ground’ both by linking the financial dynamics of residential markets to the production of socio-spatial inequalities at the local level, and – in turn – how the collective circumstances individual buyers feed back into and impact the wider market.
Interpreting housing-based inequalities from three inter-related scales of action
- Our comparative analysis draws upon case studies from Paris, Lyon, and Avignon in order to characterise prices, income, and other variables of interest among the functional urban areas.
- An inventory was conducted in Paris, Lyon and Avignon to identify key market infrastructures that both interconnect and influence real estate accumulation strategies at different scales (municipal zero-interest loans, affordable housing instruments, rental investment subsidies and tax incentives, and local building legislation. Interviews with the main stakeholders aim to deepen our understanding of local housing policies and their implementation.
- To inform the local spatial structure of affordability we integrate different spatial datasets and surveys which have so far been studied separately. Transactions data are collected by the Chamber of Notaries, and stored on the BIEN and PERVAL databases, as well as by the French Department of Public Finance which provides open-source cadastral and property tax data (DVF dataset). Our focus centres on the local geographies of the market (200 m grid, 1k grid and municipalities) to insure the robustness of our aggregation techniques, and to draw conclusions about spatial stratification at a finer scale of analysis.
- To analyse the variegated forms of asset accumulation, we classify the profiles of owners according to asset-building proxies, using property tax-related individual data and disaggregated data from the French family benefits agency (Caisse d’allocations familiales, with access to individual data for 2.3 millions households). More detailed studies are then being conducted in targeted neighbourhoods, using a household survey.
- We characterise affordability for median households as an entry point to assess socio-economic inequality in the feedback loop, starting with price-to-income ratio (PIR) metric.
- We analyse the context in which affordability constrains the residential trajectories of households through home price inflation and market volatility.
- We use the share of revenues from capital investment in a household’s income as a proxy to observe the local conditions of wealth accumulation.
Preliminary results : the spatial patterns of vulnerability we identified in our case studies among show how homeowner households are affected by risk of price decline or below average price inflation. This contradicts the asset-based welfare hypothesis for poorer households. The case studies support the view that vulnerability is a multifaceted process, one that is shaped by a combination of high debt-to-value ratios, risk to declining property values, social or racial discrimination of households leading to high-risk assessment (high cost of insurance and subprime mortgages), as well as increased precarity of a household’s employment status.
The optics through which we assess housing inequality underscores how price volatility has distinctly local characteristics and dynamics which are crucial to understanding the structure and embeddedness of housing finance regimes, as well as how these regimes are experienced by households themselves. These forms of spatial stratification identified across residential submarkets allow us to chart where to address further qualitative research targeting micro-level analysis, that is to say homeowners’ narratives of their asset trajectories and also the impact of these strategies on wider urban development.