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 polarization and household vulnerability. We investigate the links between socio-spatial inequality, asset capitalization, 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 hypothesize that the flow of real estate investments and residential housing production are predicated upon the intensifying financial stratification of urban inequalities at the neighborhood 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 analyzed the spatial, behavioral and financial trajectories of households in relation to housing price dynamics among three French cities (Paris, Lyon, Avignon). This project provides an 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 different scales.

- Our comparative analysis draws upon case studies from Paris, Lyon, and Avignon in order to characterize prices, income, and other variables of interest play out 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 levels (municipal zero-interest loans, affordable housing instruments, rental investment subsidies and tax incentives, and local building legislation). Interviews with key stakeholders sought to deepen our understanding of housing policies and their local effects.
- To inform our analysis of the local spatial structure of affordability, we integrated different spatial datasets and surveys which so far have only been studied separately: transaction data held 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).
- To interpret the variegated forms of asset accumulation, we classified the profiles of homeowners according to asset-building proxies, using individual and disaggregated property tax-related data from the French family benefits agency (Caisse d'allocations familiales, with access to 2.3 million households). We then associated these data aggregates with qualitative information on the households actually involved in market transactions (e.g. recent buyers identified by new addresses declared at the family benefits agencies and at the postal services). Finally detailed studies were conducted in targeted neighborhoods by means of a household survey (n=1427) and further follow-up interviews with a selection of these respondents (n=85).

- We characterize 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 analyze 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.
- The spatial patterns of vulnerability we identified in our case studies show how homeowner households are affected by the 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.

Our research focused on three main areas of activity: (1) an analysis of the modalities by which household access and inclusion in the property market was constituted (e.g. price-to-income metrics), as well as the lasting, compound effects that this enrollment has had on the accumulation/vulnerability trajectories of these actors; (2) an analysis of the context in which such affordability is constrained wider economic factors (e.g. housing price inflation and market volatility) that influence local conditions for wealth accumulation/vulnerability to take place; (3) an analysis of the geography of socio-spatial polarization as a function of the uncertainties and vulnerabilities that impinge upon a household’s asset-based welfare trajectory. Based on the three cities analysed, we find that developments in real estate markets and demand solvency mechanisms have contributed, to reinforcing social inequalities among 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 - all contribute to reshaping the geography of inequality in France today. We can infer from this the durability of class relations based on property and intergenerational wealth. The trajectories of households are thus largely anchored in the places of residence, whether it is a question of intergenerational wealth trajectories (strengthening, weakening, uncertain) which depend on one’s position in the acquisition process for single-owners (loan in progress, loan repaid); the investment strategy of the buyer (first-time buyer, modest multi-owner, large multi-owner); the perceived potential of property to grow in value over time (volatility of local markets). The role capital mobility, which we have begun to analyze, which underscores the importance of knowledge about donor-recipient markets, their proximity, as a way to qualify perceptions shaping investment arbitrage across owner and rental housing markets.

The project findings that have been published and disseminated at international conferences and accessible on the HAL open access repository as well as on the project website (https://wisdhom.hypotheses.org) under a Creative Commons license. Project metadata, including R code produced to harmonize the patchwork of real estate and transaction data employed in the study has been published on the usual open access platforms (CRAN or Github), under a General Public License (GPL), in order to allow for better visibility and insertion of the project results at international levels.

1. Renaud Le Goix, Laure Casanova Enault, Loïc Bonneval, Thibault Le Corre, Eliza Benites-Gambirazio, et al.. Housing (In)Equity and the Spatial Dynamics of Homeownership in France: A Research Agenda. Tijdschrift voor economische en sociale geografie, 2021, 112 (1), pp.62-80. ?10.1111/tesg.12460?. ?halshs-02916066?
2. Eliza Benites-Gambirazio et Loic Bonneval (forthcoming) Housing as Asset-based Welfare. The Case of France. Housing Studies, 2022.
3. Eliza Benites-Gambirazio, Loïc Bonneval. Promouvoir un dispositif d’incitation fiscale à l’investissement locatif. Gouvernement & action publique, Presses de sciences po, 2022, VOL. 10 (4), pp.137-160. ?10.3917/gap.214.0137?. ?halshs-03787570?
4. Pierre Le Brun. Un soutien géographiquement inégal : la sélectivité spatiale des aides publiques à l'investissement immobilier résidentiel des ménages en France. Géographie, Économie, Société, Lavoisier, 2022, 24 (2022/1), pp.43-68. ?10.3166/ges.2022.0002?. ?hal-03719877?
5. Constance Berté, Guilhem Boulay, Eliza Benites-Gambirazio, Loïc Bonneval. 20 % de plus, 20 % moins cher ». Le plan 3A de la Métropole de Lyon ou les ambiguïtés de l’accession abordable. Géographie, Économie, Société, Lavoisier, 2022, 24 (1), p.103-123. ?10.3166/ges.2022.0004.?. ?halshs-03787571?
6. Pierre Le Brun. L’État dans la régulation locale : le cas des aides fiscales à l’investissement locatif des ménages en France. Revue d'économie régionale et urbaine, Armand Colin, A paraître, Prépublication, pp.5zh-19. ?10.3917/reru.pr1.0045?. ?hal-03774611?
7. Thibault Le Corre, Antonine Ribardière. Production de logements et accession à la propriété dans les communes populaires franciliennes. Espaces et sociétés (Paris, France), Erès, A paraître. ?halshs-03783835?
8. Thibault Le Corre. Une base de données pour étudier vingt années de dynamiques du marché immobilier résidentiel en Île-de-France. Cybergeo : Revue européenne de géographie / European journal of geography, UMR 8504 Géographie-cités, 2021, ?10.4000/cybergeo.37430?. ?hal-03328524?
9. Renaud Le Goix. Entre étalement urbain et financiarisation ordinaire des ménages : regards croisés sur les recompositions des fronts d’urbanisation en France et aux États-Unis. revue Urbanités, 2020. ?halshs-03117764?

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 coordination

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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