CE41 - Inégalités, discriminations, migrations

Wealth Inequalities and the Dynamics of Housing Market.Interpreting real-estate market-based regime of spatial inequalities (WIsDHoM) – WIsDHoM

Wealth Inequalities and the Dynamics of Housing Market

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.

- 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.

Innovations in data analysis provide important opportunities to integrate micro-scalar dimensions of urban inequality to broader structural and institutional research in the post-global financial crisis period. Our approach seeks that not only should these data be integrated for stronger, more comprehensive analysis across geographical scales, but also how to go about doing it, conceptually and methodologically. We will bridge local data aggregates with qualitative information on the households actually involved in market transactions while moving in and out (recent buyers identified by new addresses declared at the family benefits agencies and at the postal services).

We will be able at the end of the project to answer a number of questions including (but not limited to) the purchasing power of homebuyers across different socio-professional categories and residential submarkets, as well as the geographical access and inclusion of these buyers across different housing finance regimes, and the mobility spatial patterns correlated to the buying process.

Le Goix, R., Casanova Enault, L., Bonneval, L., Le Corre, T., Benites-Gambirazio, E., Boulay, G., Kutz, W., Aveline-Dubach, N., Migozzi, J. and Ysebaert, R. (2020), Housing (In)Equity and the Spatial Dynamics of Homeownership in France: A Research Agenda. Tijds. voor econ. en Soc. Geog.. doi.org/10.1111/tesg.12460

CASSMIR. Ready-to-use, ready-to-use dataset on the housing real estate market in Île-de-France that can be disseminated and reused by the scientific community. tlecorre.gitpages.huma-num.fr/cassmir/index.html (CC-BY-NC)

Database on real estate investment support devices (historicized and spatialized database 2003-2019). analytics.huma-num.fr/Pierre.LeBrun/Investissement%20immobilier%20%28WIsDHoM%29/

WIsDHoM analyzes growing socio-economic inequalities induced by property prices inflation. Housing prices have increased faster than the income of buyers in most of post-industrial city-regions. Real estate has become a major driver of these inequalities because the flows of household real estate investments are instrumental to the dynamics of asset capitalization. The team applies under the PRC instrument,(CES 41, challenge B8, axe 2) and the project addresses inequalities of income and assets, combining a multidisciplinary approach (geography, planning, history, political sciences, economics) to analyze how property markets reinforces spatial and wealth inequalities.
The WIsDHoM project structures a multidisciplinary research group to investigate the systemic dimension of inequalities induced by the dynamics of French housing markets and their political and financial context since the end of the 1990s. In French metropolitan areas, the most salient dynamics for the last two decades have been a continuous and steep increase in property prices and a steady increase of homeownership, analyzed as a « resilient bubble » (Timbeau, 2013), and therefore described as a new price regime (Tutin, 2013b). The following paradox has emerged in the post-financial crisis era: while the evolution of both price to income ratio (i.e. affordability index) and rent to price ratio should discourage homebuyers and investors in metropolitan areas, housing markets have remained active and the price trend did not reverse. We assume this situation is linked to many parameters, from the national level (financial and credit affordability conditions, pro-homeownership policies, shift toward asset-based welfare) to the local level (pro-market housing policies, spatial differentiation of housing prices). Our research question stems from this analysis: to what extent contemporary social inequality is shaped by one’s relationship to housing markets? We will examine it through three overlapping dimensions: urban policies to promote the production of residential real estate; local access and affordability to participate in that market; specific trajectories of wealth accumulated through home ownership – and its attendant effects on urban policies

The WIsDHoM project aims to analyze the relationships between local housing prices dynamics, inequalities and housing policies. The housing prices volatiliy is dependent upon local features. Price volatility might influence the social sorting of homebuyers, the appreciation/depreciation of property values, and the real estate strategies of both private and public local actors. In turn, such parameters impact local housing markets. This socio-spatial feedback loop is our key concern.
In order to encompass the variegated socio-spatial contexts, we will draw on three case studies at three different levels of the urban hierarchy: Paris, Lyon and Avignon. A multiscalar approach, going back and forth between State policies, local governments’ policies and households’ strategies, will allow for an empirically grounded approach.
The scientific program is divided up in three work packages: (1) Characterization of the local market assemblages and housing provision policies in each of our three case studies ; (2) The spatial analysis of the unequal structure of affordability using disaggregated spatial datasets (real estate transactions, property taxes, mortgages, land register) ; and (3) An assessment of financial accumulation or vulnerability and its effects on local market assemblages through a survey of households’ strategies (nimby, bimby, housing improvement…). Our research team is made of leading experts of every database we will use (land registry, real estate sales, tax databases, credit databases), and of specialists of field surveys, which will allow an integrated approach that has never been achieved so far.

Project coordinator

Monsieur Renaud LE GOIX (Géographie-cités)

The author of this summary is the project coordinator, who is responsible for the content of this summary. The ANR declines any responsibility as for its contents.

Partner

CNRS/CMW CENTRE MAX WEBER
Géographie-cités
ESPACE Etudes des structures, des processus d'adaptation et des changements de l'espace

Help of the ANR 383,571 euros
Beginning and duration of the scientific project: January 2019 - 36 Months

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