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Homeownership, Renting and Society: Historical and Comparative Perspectives

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On the eve of the financial crisis, the USA was inhabited by almost 70 percent homeowning households, in comparison to about 45 percent in Germany. Homeownership, Renting and Society presents new evidence showing that this homeownership gap already existed between American and German cities around 1900. Existing explanations based on culture, government housing policy or typical socio-economic factors have difficulties in accounting for these long-term cross-country differences. Using historical case studies on Germany and the USA, the book identifies three institutional domains on the supply-side of the housing market - urban land, housing finance and construction - that set countries on different housing trajectories and subsequently established differences that were hard to reverse in later periods. Further chapters generalize the argument across other OECD (Organisation for Economic Co-operation and Development) countries and extend the explanation to cover historical differences in homeownership ideology and horizontal property institutions. This enlightening volume also puts forward path-dependence theories in housing studies, connects housing with vast urban-history and political-economy literature and offers comprehensive insights about the case of a tenant's country which contradicts the tendency towards universal homeownership. Providing an all-new historic-institutionalist explanation of the German-American homeownership gap, this title will be of interest to postgraduate students and scholars interested in fields including: Housing Studies, Sociology, Urban History, Political Economy, Social Policy and Geography. It may also be of interest to those working in housing field organizations and ministries.
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Introduction
This book offers some new answers to an old puzzle: Why do German- speaking
countries have signicantly lower homeownership rates than English- speaking
countries? The question was rst raised by Jim Kemeny around 1980. As this
book shows, cross- country urban homeownership patterns in general and what I
call the American–German homeownership gap can even be traced back over a
century ago. Even though the Great Recession brought the American homeown-
ership rate down to 62.4 percent, the German homeownership rate of about 45
percent has recently not increased, in spite of historically low interest rates and a
strong post- 2008 recovery, making relatively stable country rankings of one of
the most central properties of housing regimes an ongoing research puzzle. Ever
since the recent phenomenon of housing booms and busts, particularly in coun-
tries with rising homeownership rates, this puzzle has made it from the back-
rooms of specialized housing research to the front pages of leading newspapers
(Palmer 2011). Why then did countries with similar economic and urbanization
histories turn into widely different regimes with regard to housing tenure?
Using historical case studies of the USA and Germany, the rst three chapters
of this book claim that variegated historical developments in three institutional
domains with roots in the nineteenth century set countries on different housing
paths: city planning, mortgage nance and the residential construction sector. I
argue that market- based city planning, the development of savings and loans and
the mass production of single- family houses tended to urbanize the USA in the
form of suburbanized cities of single- family homes. By contrast, corporatist city
organizations, the presence of bond- nanced mortgage banks and non- prot
housing associations and a craftsmen- based construction sector forced Germany
to inherit a system of cities with dominantly rental apartment buildings.
In both cases, the emergence of these path- dependent institutions in the late
nineteenth century may account for the century- long American–German home-
ownership gap. What is more, Chapter 4 generalizes these ndings to the world
of OECD countries. In this broader picture, two additional factors help explain
the different trajectories in the Southern and Eastern European as well as Scan-
dinavian housing regimes: rst, the unequal spread of homeownership ideology
and policies; second, the timing and importance of apartment or cooperative
ownership institutions. The book’s general contribution to the understanding of
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2 Introduction
homeownership differentials in general is to give an institutional, supply- side-
driven historical political- economy explanation supported by unique inter-
national data on housing form, tenure and nance.
Popular answers to the German–American homeownership puzzle genrerally
cite cultural factors, the American dream of homeownership and the absence of
such a dream in Germany. All household surveys about German housing prefer-
ences, however, seem to reject this easy answer. Another quick response con-
cerns American land abundancy: Does it not automatically lead to easily
affordable homeownership and make a book- length treatment of this subject
completely redundant? This response, however, misses the point that some of
the most densely settled countries such as Belgium or Singapore have very high
homeownership rates and that the share of land costs in overall housing costs has
sometimes been even lower in Germany than in the USA (Knoll et al. 2015).
After all, the supply of scarce urban land depends heavily on municipal institu-
tions. Housing scholars, in turn, would most likely cite different ways of govern-
ment intervention following World War II: while Germany turned to social
housing construction policies, the US government supported homeownership
through mortgage subsidies. Yet, the homeownership gap is much older than the
rst housing policies so that the latter may even be the product of the former.
Finally, econometric answers tend to use basic structural variables, namely
urbanization, GDP and volumes/prices of the construction sector. The puzzling
fact about homeownership, however, is that countries with similar urbanization,
mortgage indebtedness and construction industry levels can still produce diver-
gent homeownership paths.
A main thrust of the book is therefore to disaggregate these global gures into
different institutions channeling these processes: not urbanization rates per se,
but the form of cities – low- rise suburban or high- rise compact – is thus
important for the way in which urban land is distributed. Not the rise of mort-
gage volumes per se, but the type of mortgage- lending institution, whether re-
nanced through deposits or bonds, becomes relevant. After all, mortgage levels
are not informative about what mortgages are spent on and higher mortgage
indebtedness may not lead to higher homeownership levels. It is not general con-
struction sector investments and productivity levels, but the specic market
segment for the mostly owner- occupied single- family houses that is important. If
cheap single- family houses are not produced, homeownership afford ability
becomes a problem.
This book examines a phenomenon that dees the prominent convergence
thesis about housing and housing policy (Donnison and Ungerson 1982; Harloe
1995). It is true that the OECD and even the global homeownership trend is
generally one of a continuous rise ever since the interwar period. Prior to the
crisis of 2008, there were probably more people living in their own homes in the
developed world than ever before. This trend was accompanied by an increase in
the average size of housing units as well as their quality in terms of amenities
(bathrooms, own WC and kitchen, water, electricity and sewage supply). Fur-
thermore, all housing policies underwent a transformation from postwar capital
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Introduction 3
subsidies for new construction of rent- restricted units into individual housing
allowances, tax exemptions for homeowners and the promotion of a private
market for housing capital. This strong prima facie evidence for an overall con-
vergence of housing indicators and policy is also reported in the comparative
housing literature (Kemeny and Lowe 2005) where a convergence thesis prevails
that would predict a gradual elimination of cross- national differences in the
housing sector. Homeownership seems to be different.
Why care about homeownership rates?
If my explanation about path dependency holds true, propositions about a neces-
sary universal linear path to similar homeownership levels in all nations should
be revised and some instrumental knowledge for policy- makers about reinfor-
cing or breaking one or the other trajectory generated. More particularly, readers
from high- homeownership countries can learn that even beyond the existence of
social housing there are crucial and enduring housing differences in other
developed nations at a time when homeownership rates are falling and interest in
private renting is rising in the USA, the UK, Spain and Portugal (Scanlon 2011).
But what overall difference should homeownership make, other than indicating
just a different sort of tenure of otherwise equally well- equipped housing units?
The extent of public debates and concerns about homeownership should already
be an indicator denying homeownership’s marginality. In the USA, for instance,
Presidents Clinton and Bush, Jr. announced rates of 67.5 percent and 5.5 million
more low- income homeowners as desirable goals for the short term (Masnick
2004: 315), while in France, President Sarkozy proclaimed 70 percent French
homeowners to be his ambitious objective (Driant 2009: 119). But to highlight
the importance of this book’s main topic of “homeownership” even further, I
will briey give an idea of which other social phenomena are correlated with or
even fall under the causal shadow of high- homeownership rates.
First, homeownership may be seen as a main driver behind the expansion of
mortgage credit over the past century, and these credit expansions were in turn a
strong predictor for nancial crises (Jordà et al. 2016). Recessions following
real- estate-bubble- incited crises were deeper and led to slower recoveries (ibid.).
Countries and regions with rapid expansion of urban housing or subdivision of
land were hit particularly hard by the Great Recession as they already had been
by the Great Depression (Brocker and Hanes 2012; Field 1992; Mian and Su
2009). High- homeownership countries seem to suffer more from volatile house
prices and credit cycles (Rünstler 2016). A nal consequence of nancial crises
may even be the rise of political instability and the extreme right (Funke et al.
2015).
A second macroeconomic effect of homeownership, put forward as the
Oswald hypothesis (1996), is the positive effect upon unemployment: countries
or regions with higher homeownership rates display higher rates of unemploy-
ment. Numerous studies for different countries and levels of analysis have both
rejected and conrmed the hypothesis largely for the late twentieth century
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4 Introduction
(cf. van Ewijk and van Leuvensteijn 2009; Lerbs 2012: 71). According to this
hypothesis, homeownership is said to bind people too strongly to their home
region – as they fear transaction costs and possibly lower property values when
selling to the extent that they do not relocate to job- offering regions when
becoming unemployed. The job- matching process in labor markets is thus inhib-
ited. The hypothesis is the subject of ongoing controversy as it is conrmed in
macro- level studies but tends to be rejected in some regional and almost all
individual- level studies.
Homeownership also gures prominently in the embourgeoisement thesis
according to which workers’ adoption of bourgeois consumer behavior aligns
them with the capitalist regime, as expressed in conservative welfare attitudes,
right- leaning voting behavior or higher voter turnout (Harvey 1976: 272–274).
This view hypothesizes that the interest burden of young households makes them
unreceptive to higher taxes and that the suburban environment is tantamount to a
retreat into private life. A number of studies across countries do indeed reveal a
distinct relationship between homeownership and showing conservative attitudes
(Bayram and Gugushvili 2014) or voting behavior (Dunleavy 1979; Capdevielle
and Dupoirier 1981; Häußermann and Küchler 1993). More specically, the rise
of homeownership has been used to explain the decline of unionism and of the
French communist party (Groux and Lévy 1993: 194–196), anti- public housing
positions of American unions following World War II (Botein 2007), the decline
of the American socialist party through suburbanization (Edel et al. 1984: 308),
higher voter turnouts in US elections and political participation in Germany and
the USA (Glaeser and DiPasquale 1998; Blum and Kingston 1984; Alford and
Scoble 1968), and even the rise of the new anti- tax conservatives growing out of
property tax and anti- busing protests in suburban California (McGirr 2001;
Martin 2008; Lassiter 2006). These ndings, however, have also been controver-
sial, as they usually cannot exclude a selection effect of homeownership in favor
of conservative households (Saunders 1990) and do not show what establishes
the causal link between homeownership and specic attitudes.
A related claim put forward by homeownership promoters since the nine-
teenth century – supposes that homeownership makes societies more equal, since
it encourages the lower classes to participate in a country’s wealth and frees
everyone from dependence on landlords. Across the twentieth century there is
indeed evidence that, thanks to more widespread homeownership, overall wealth
has been distributed more equally, even in countries with strong income inequal-
ities (Feinstein 1996: 104). Housing wealth is generally distributed more equally
than wealth in other assets (Blossfeld et al. 2012: 181; Kessler and Wolff 1991:
263), although there seems to be a persistent homeownership access problem for
certain groups such as Afro- Americans in the USA (Massey and Denton 1993;
Collins and Margo 2011). Homeownership rates alone, however, are no guaran-
tee of more widespread wealth, since property values of owned homes are
usually lower in high- homeownership countries (Kolb et al. 2013). Recently,
the claims about homeownership’s equalizing effects have been identied as part
of a so- called asset- based welfare regime, supposedly substituting traditional
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Introduction 5
non- private equity- based welfare regimes. Evidence about wealth inequality, let
alone its dependence on homeownership, is scarce, but three types of still con-
troversial ndings should be mentioned. First, historians of the nineteenth
century (Thernstrom 1964: 155ff.) and the 1970s (Edel et al. 1984: 137ff.) have
suggested in the case of the USA that higher homeownership came at the cost of
social mobility as overburdened homeowning parents lacked the necessary
resources to invest in their children’s future; what is more, the inequality of
seemingly equal homeownership re- emerges in the form of unequal property
values and unequally risky property value developments. Second, there seems to
be a positive cross- sectional association of high- homeownership countries and
the Gini- coefcient of income inequality as well as a co- movement of home-
ownership and income inequality increases in the late twentieth century that
several authors take as an indication of homeownership becoming a private
welfare reaction against labor market deciencies (Stamsø 2010; Norris and
Winston 2011). Third, there is at least an association between nations with
higher homeownership and spatial inequality in the form of urban segregation
(Arbaci 2007), the mechanism being that homeowners seclude themselves in
separate districts, leaving poorer tenants behind in homogenizing neighborhoods.
Although different denitions of tracts should make one cautious in comparing
segregation indices, the Duncan/Duncan dissimilarity index for white/black
segregation in the USA often approaches more than 0.6, whereas both ethnic and
income- based indices for Germany are at the level of 0.2 or 0.3 (Friedrichs 2008;
Cutler et al. 1997; Hallett and Williams 1988: 17), with the index ranging from 0
to 1, 1 being the highest segregation level.
Finally, a host of studies puts an emphasis on the benecial individual effects
on homeownership which are shown to include higher life satisfaction, better
maintenance of one’s property and therefore more neighborhood stability, higher
performance of homeowners’ children in school, fewer instances of divorce,
higher voter turnout, etc. (cf. Megbolugbe and Linneman 1993; Dietz and Hauin
2003). With housing being intertwined with family life, individual consumption,
labor market participation and wealth formation, it is hardly surprising that
homeownership is intertwined with a multitude of causal effects. Overall, studies
give the impression that homeownership implies many individual virtues but
comes at the cost of some vices on a macro- level. Homeownership seems to be
at the crossroads of many social and economic phenomena and its multifaceted
effects certainly merit more studies. This book, however, will be mainly con-
cerned with the causal question of where different homeownership levels come
from. Before turning to the existing explanations and the book’s new account of
these differences, I will present the to my knowledge most complete global
and overall picture of homeownership trends.
Development of homeownership rates
The homeownership rates in many countries went through a decline in the
nineteenth century and began to rise again in the twentieth century. With the
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6 Introduction
bourgeois revolution, rural ownership tended to rise thanks to land distribution,
the end of feudalism or simply due to eviction of non- owners to cities. At the
same time, urban homeownership rates tended to fall as traditional craftsmen’s
ownership gave way to cities of small capitalist landlords and tenants (Harloe
1985: 2). With urbanization and industrialization’s low- income groups rising,
more small peasant owners were transformed into urban tenants. Urban tenancy
per se is not a product of industrialization – in fteenth- to sixteenth- century
German cities ownership rates could be as low as 43 percent, even in smaller
cities (Kuhn 2007: 75). But with the high urbanization waves, the largest cities
on the European continent reached permanent ownership levels of less than 10
percent between 1870 and 1920 (Gransche and Rothenbacher 1985). Ever since
that time, homeownership has been on the rise in most countries, only tempor-
arily interrupted by the recessions of the 1930s and 1980s and the recession of
2008, or by communist housing policies. While rural areas display high-
homeownership rates in most countries, the growing cities show signicant tenure
differences across countries (see Chapter 4). The core of the homeownership- gap
puzzle has therefore to do with different kinds of urban development, making
city- based explanations plausible.1
Homeownership statistics start after World War II in most countries and refer
to the number of housing units that are owner- occupied within the entire housing
stock at the dates of the general census. Data based on household surveys started
in the 1970s and allow for more frequent and precise measurements. Moreover,
denitions differ across countries, which is why statistics have to be treated with
caution and minor country differences should not be given too much weight (see
the detailed description of data2). While Figure I.1 shows the overall rising tend-
ency throughout countries, it reveals important differences in levels.
There is the clear and long- term difference in levels among the three German-
speaking countries (as well as East Germany3) and the English- speaking countries
that Kemeny observed in the 1980s. The former remained approximately 20 to 30
percentage points below the latter and, in spite of the overall increases, the home-
ownership gap has not closed. In the English- speaking group, the UK and Scot-
land are different from the rest because their initial levels were comparable to
other European countries. This is why my generalizations in Chapter 4 from the
American case to all other cases of the English- speaking world have to be read
with caution. Figure I.2, in turn, shows all countries of Kemeny’s dualist- tenure
system, where traditionally cost- based renting co- existed with homeownership as
an alternative tenure, thus lowering their overall homeownership rates.
The long- term data show, however, that not only were some Scandinavian
countries already part of the high- homeownership group in the beginning but
also all other dual- tenure countries moved upward into the high- homeownership
area of the English- speaking countries’ average and beyond, making the some-
times hypothesized link between non- liberal welfare states and low homeowner-
ship rates very tenuous (Balchin 1996). Overall, apart from the fast growers, the
inter- country ranking remains relatively stable over this long period of time, jus-
tifying my approach to look for historical initial causes.
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Introduction 7
Another important comparative dimension drawn upon in Chapter 4 is the
comparison with Southern and Eastern European countries whose super-
homeownership rates even exceed those of the previous high- homeownership
group (Figure I.3) (Stephens et al. 2015). On the one hand, one nds here as well
a group of Southeastern European countries, roughly those under former
Ottoman inuence, which already displayed initial high- homeownership rates
that the Soviet inuence of public ownership has not undermined to the same
extent as in the Soviet Republics themselves. Many Eastern countries, even
Eastern Germany, had in fact higher homeownership rates than their Western
counterparts. In turn, the urban homeownership rates of the Baltic countries and
the average of all 15 Soviet Republics indeed show a declining tendency up until
the 1980s. On the other hand, both Southern and Eastern European (Visegrád)
countries moved to high homeownership through an incremental and radical
transformation process, respectively. Although different in nature, this process
consisted of large- scale conversions of private and public apartment units into
units of owner- occupancy.
In the longest possible recording perspective, therefore, the German- speaking
countries offer a puzzling case from both an intra- European and intra- OECD
80
70
60
50
40
30
20
10
90
0
1900
1911
1913
1915
1917
1919
1921
1923
1925
1927
1929
1931
1933
1935
1937
1939
1941
1943
1945
1947
1949
1951
1953
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1957
1959
1961
1963
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1967
1969
1971
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1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
Ireland
New Zealand
Australia
UK
Canada
USA
Scotland
Austria
Germany
Switzerland
East Germany
CAN
AUSNZL
USA
SCO
IRL
DEU
CHE
GDR
UK
AUT
Homeownership rate (%)
Figure I.1 Homeownership developments in German- and English-speaking countries.
Source: Own collection.
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8 Introduction
perspective, where the English- speaking high- homeownership countries have
been rejoined by Southern and Eastern Europe and Scandinavia. To give a nal
edge to this puzzle, homeownership rates can be gathered to some extent in a
global perspective, even though differing property right denitions, informal
housing arrangements and missing African data make comparisons with the
Global South difcult. In the data shown in Figure I.4, I decided to add the
informal “other tenure” category to the homeownership category, as no rent is
paid. The overall worldwide time trend is one of rising homeownership rates,
due to rising incomes, the end of communist regimes and possibly a homeown-
ership preference of international money- lending institutions such as the IMF or
the World Bank (Rolnik 2013). When the maximum value of the past few
decades (i.e., often the most recent rate of available data) is depicted on a world
map, then, once again, even on a global scale, the group of continental Western
European countries stands out. Only a very few and smaller other countries, for
very specic reasons, have experienced similarly low values.
80
70
60
50
40
30
20
10
90
0
Iceland
Norway
Finland
Belgium
Average (English speaking)
Sweden
Denmark
Netherlands
France
Austria
Germany
Switzerland
1920
1923
1926
1929
1923
1935
1938
1941
1944
1947
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
ISL
NOR
FIN
BEL
SWE
DNK
DEU
NLD
CHE
FRA
AUT
Average
(English-speaking)
Homeownership rate (%)
Figure I.2 Homeownership in European countries of Kemeny’s dualist regime.
Source: Own collection.
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90
80
70
60
50
40
30
20
10
100
0
Romania
Bulgaria
Lithuania
Soviet average
Hungary
Estonia
Latvia
Yugoslavia
Slovenia
Poland
Spain
Czech Republic
Greece
Portugal
Italy
GRC
HUN
ESP PRT ITA
CZE
POL
SVN
LVA
EST
Yugoslavia
Soviet average
LTU
BRN
ROU
1936
1938
1940
1942
1944
1946
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Homeownership rate (%)
Figure I.3 Southern and Eastern European comparisons.
Source: Own collection.
Homeownership
100 90 80 70 60 50 40
FigureI.4 World homeownership rates, maxima of recent decades.
Source: Own collection.
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10 Introduction
Explanations in the existing literature and their
shortcomings
It would be misleading to talk about an integrated body of scholarship concern-
ing homeownership, though there is a loose and growing eld of comparative
housing research which I address (Doling 1997; Kemeny and Lowe 2005). I
agree that
[t]he questions [of homeownership] engage theoretical and empirical work
by urban economists, Marxists, urban geographers, sociologists, anthropolo-
gists, and historians. The scope and implications of the studies, as well as
their sheer volume, intimidate. Often, home ownership is a small point
embedded in more comprehensive theoretical constructs […]. Therefore
ideological and prescriptive outlooks spice most writing, and few discus-
sions are neutral […]. The links between cause and result are ever complex,
sometimes unfathomable.
(Doucet and Weaver 1991: 165)
Among the works dealing directly with homeownership there are three types of
studies that either try to explain homeownership per se, the rise of homeowner-
ship, or homeownership differences across individuals, regions or countries.
The rst kinds of studies connect homeownership to grand social theories
such as culturalism, modernization theory or Marxism from which the following
approaches to homeownership may be derived (see Duncan 1981).
Cultural explanations explain homeownership phenomena with reference to
beliefs and desires held by individuals in specic regions of homogeneous cul-
tures. Sometimes one nds the claim that the kind of explanation by cultural
preference – people own because they want to own – is tautological (i.e., empiri-
cally always true), and that therefore these kinds of explanation should be dis-
missed a priori. This claim is false, however, because it is easy to imagine
situations under which ownership- desiring people do not own in some circum-
stances as they occur in Germany. The supposedly tautological statement
“Whenever people desire to own, they own” may apparently be false. The real
problem with cultural explanations more generally is rather that they do not
provide additional information in many question–answer contexts – when seeing
Jones in his own house it seems to be the default assumption that he wants this,
believing it to be a good thing. The more crucial problem with the literature-
pervading explanations of the kind4 that “The culture of home ownership is
integral to the North American way of life” (Choko and Harris 1990: 74) is (1)
that they are empirically elusive or not founded, (2) that they have problems
explaining inter- temporal and regional differences, and (3) that they are often
ad hoc.
First, to my knowledge there is no international study about homeownership
preferences, though there is an abundance of respective national surveys under-
taken from national statistical bureaus, popular magazines or private research
institutes often working for agents of the house- building and nance industry.5
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Introduction 11
The percentages found for those desiring homeownership differ of course as to
how much survey questions enquire into mere desires or realizable plans. It is
nonetheless surprising that most surveys nd over 70 percent of people desiring
homeownership across countries. Some contradicting studies come from 1950s’
Germany where percentages were much lower and most people just desired
bigger apartments to rent (but see EMNID 1955), a result that must be relativ-
ized by the very special circumstances of cities in decline, families doubling up
(14.6 million households with only 9.3 million normal housing units in 1950)
and 1.9 million residents in temporary housing units (Destatis 1955). The upshot
of the German surveys is that many more people claim to be attracted to home-
ownership than those who actually realize it, strongly suggesting that some
structural obstacles beyond individual preferences seem to be placed in their way
in Germany.
Second, the survey results are never used to explain the huge subnational dif-
ferences that a consistent cultural explanation would also have to account for not
only in terms of economic but also subcultural factors. Anecdotal evidence about
regional characters is sometimes cited, but such evidence (e.g., about the
Swabian cottage- lovers (Häuslebauer) having supposedly higher homeowner-
ship rates) is even shown to be wrong (Behr 2002). This relative rigidity of the
homeownership preference across time and space of reports about consumer
preferences therefore does not make the cultural explanation of homeownership
very attractive.
Finally, explanations of the cultural sort often appear as ad hoc, as an expla-
nation of last resort when all other explanations have failed. A particularly
telling example for this may be found in the explanation of the 1890s homeown-
ership rate that the US census had revealed to be below 50 percent, which
puzzled some observers who had apparently equated the frontier homeowner
with all Americans. One sought refuge in the following explanation:
It is worthy of remembrance that we have been a migratory people, shifting
from one occupation to another, and, as people in a new, rapidly developing
country are likely to be, somewhat wanting in xity of purpose and of aim
in life. A restless, unsettled people is not to be tied to land. The ownership
of a home hinders migration, and civilization has not yet proceeded far
enough to do away with migration as a means of bettering one’s condition.
(Holmes 1895: 43–44)
Contrary to the usual description of the frontier- American homeowner
craving his own piece of land, the author turns it upside- down in a way that will
provide him with a suitable explanation no matter what next year’s homeowner-
ship rate will be. Cultural factors are thus difcult to use in prediction contexts
and seem to t to empirical data, no matter what these may be.
I do not wish to deny that what people desire as housing tenure inuences
what kind of housing they nally end up in. In societies with autonomous polit-
ical subjects and ideas about free consumer choice, this denial would hardly be
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12 Introduction
realistic. Their secondary role, however, does not account for the observed vari-
ance and may be reducible to causal antecedents that form homeownership pref-
erences: the way one’s parents lived (Boehm and Schlottmann 1999) and the city
one grew up in counts foremost among them, with the building trades, marketing
departments or governments’ housing departments seen as important factors that
change these sticky worldviews.
Economic functionalist explanations, in the guise of modernization (Zaretsky
1976), Marxist (Castells 1977; Harvey 2013[2012]: 91) or industrial capitalism
theory (Donnison 1967; Schmidt 1989; Burns and Grebler 1977), suggest that
modern democracies, capitalist economies or industrial growth make rising
homeownership a necessary accompaniment. The reason for this being necessary
stems from the attribution of different functions to homeownership: it is said to
produce better democratic citizens and nuclear families, pacies industrial
workers and absorbs surplus capital, or simply expresses a higher level of
income and consumption. Whereas preference- based explanations tend to predict
a remaining divergence of housing indicators, the functionalist explanations tend
to agree at least on a convergence along the lines of economic development (cf.
Kemeny and Lowe 2005). Using GDP development as the most common indi-
cator and explanatory variable of these functionalist explanations, they stumble
upon a paradox. Income variables explain higher household homeownership
rates and rising GDP levels explain rising national homeownership rates for
certain periods in time, but:
Of particular interest is the fact that the four countries in this “deviant”
group [with homeownership rates of one- third or less and which collectively
do not show any obvious trend over the postwar period] – Sweden, West
Germany, the Netherlands and Switzerland – are among the richest and
(with the exception of Switzerland) most highly urbanized countries in the
world.
(Kemeny 1981: 7)
This often leads to a negative correlation between GDP and homeownership
(Balchin 1996: 12). Economic development or settlement area variables thus do
not seem to account for different homeownership rates on the country level.6
Economic functionalist theories also back up the widespread intuition con-
cerning convergence in comparative housing studies since Donnison (cf. Doling
1997: 82). Convergence theories concerning both housing policy and markets
are well supported if one disregards minor differences in timing. In all occidental
countries, housing production cycles, determined by the two World Wars, and
then the 1970s recession, followed broadly similar lines, namely housing
quantity equipped with amenities increasing steadily through time (Donnison
and Ungerson 1982: 41ff.). As to housing policy, the following historical traject-
ories were more or less common: merely negative regulation of private rental
housing stock before World War I, government intervention focused on quantity,
then on quality between World War I and the 1970s, a stronger focus on
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Introduction 13
individual affordability, housing allowances, homeownership subsidies and less
direct construction subsidies ever since (cf. McGuire 1981: 12; Harloe 1995;
Power 1993). Given this overall evidence in favor of convergence both of
housing policy and market indicators, the relatively stable homeownership gap
between some country groups appears especially puzzling.
A nal functional- sounding theory with some history in housing studies is the
welfare–homeownership trade- off (Kemeny 2005; Castles 1998; Castles and
Ferrera 1996; Doling and Horsewod 2011). This idea has gained a certain
momentum in explanations of the latest American credit crunch (Rajan 2010:
9f., 42f.). It is based on the idea that there is a functional necessity for countries
to develop some type of welfare system. There are private and public ways of
guaranteeing citizens’ welfare and – to the extent that private welfare including
(debt- acquired) homeownership exists – public welfare states are or have
become redundant (Crouch 2009). The more countries build up a public welfare
state, especially public pensions, the less homeownership becomes necessary;
the more welfare state retrenchment sets in, the more countries adopt homeown-
ership policies. Homes, in that scenario, serve as savings banks and mortgage
collateral for private pensions, education and health care expenditures; rising
house prices should provide a wage- income alternative income source as “asset-
based welfare” (Ansell 2012: 532f.; Doling and Ronald 2010). Indeed, a correla-
tion of countries’ welfare state expenditures and homeownership (Schmidt 1989:
94) or private debt rates (Dalton and Gifford 2006: 71; Prasad 2012: 229f.) may
be found for the post- 1970 period. A correlation between welfare state types and
homeownership rates in countries yields a loose arrangement of corporatist
countries with low homeownership rates, greater public and fewer private rental
houses, of liberal countries with high mortgage- nanced homeownership, few
private and almost no public rental housing, of rudimentary southern welfare
states and high family- nanced homeownership, and virtually no private and
public rental housing. Finally, in social democratic countries with low home-
ownership rates, few private and greater numbers of public or cooperative
housing exist.
Barlow and Duncan go even further when associating the kind of construction
land provision system with the respective welfare regimes – private land and
speculative building provision in liberal regimes, private land and self- help
housing provision in rudimentary regimes, semi- public land provision and a
combination of self- and restricted- prot promotion as housing provision in cor-
porative regimes and public land provision with a dominance of restricted- prot
promotion in social democratic regimes (Barlow and Duncan 1994: 33ff.).
The attractive welfare- mortgaged homes trade- off theory seems to hold only
for inter- temporal and cross- country differences within a specic time period
beginning in the 1980s (Streeck 2013: 15). The conservative parties in most
countries tended to cut back on housing and other subsidies (Pierson 1989) while
enabling an international nancial market to provide easier access to mortgage
credit (Schwartz 2009).7 Once increased mortgage credit inates housing
demand, house prices tend to inate, leading to more necessary mortgage credit;
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14 Introduction
this house price–mortgage spiral may be observed in various homeowner
nations. Outside of this particular period, however, the theory scores less well.
First, mortgage credit and urban homeownership rates have been on the rise in
the USA ever since the rst survey in 1890, and this independently of varying
social expenditures during the period up until the 1970s. Second, in almost all
countries, homeownership rates grew to the largest extent in precisely the time
period of the expanding comprehensive welfare states between 1930 and 1970.
General growth of income in conjunction with social democratic regime prefer-
ence for a non- homeownership alternative seems to act as a common cause of
the supposed trade- off during these periods. Third, there is too much intra- group
heterogeneity to make the housing–welfare connection work without further
explanation. The conservative welfare states France and Belgium, for instance,
have always exceeded the German homeownership rate. A nal and major short-
coming is the snapshot character of many of the proposed typologies which tend
to collapse once more years are added or calculation techniques are changed. As
shown in Figure I.2, Scandinavian countries reach and even exceed the home-
ownership levels of liberal welfare states. By opting for a more historical per-
spective and thus historicizing the typologies, this book tries to remedy this
shortcoming.
The second group of studies looks more inductively at possible quantitative
factors that could explain individual, interregional or international homeowner-
ship variations. The individual- level ndings, mostly with post- 1980 datasets,
usually conrm across countries the positive inuence of income, age, children
and higher occupational status on owning (vs. renting). Existing studies of inter-
regional and international differences have pointed to lower urbanization, warmer
climate, ethnic diversity, population in property- buying age, credit availability,
lower house prices and suburban location, high ination (expectations), low
welfare expenditure and low construction and land prices as being among the
causal factors determining higher homeownership rates (Struyk 1976; Eilbott and
Binkowski 1985; Schmidt 1989; Angel 2000; Coulson 2002; Behring et al. 2002;
Fisher and Jaffe 2003; Gwin and Ong 2004; Atterhög 2005; Lauridsen et al. 2009;
Andrews and Sánchez 2011; Lerbs and Oberst 2012). International studies nd
xed effects for countries: Fisher and Jaffe, for instance, nd that “[i]ndeed,
countries with a German legal origin have signicantly lower homeownership
rates than other countries, even when holding rates of urbanization, government
consumption and other demographics constant” (Fisher and Jaffe 2003). My
explanation is meant to shed more light on the xed effects such as “legal origin.”
Another quantitative, demographic approach emerges from life- cycle ana-
lyses which explain the different homeownership rates with reference to age
groups (Wagner and Mulder 2000; Chevan 1989). These studies reveal a relat-
ively consistent inverse U- curve for owner- occupancy rates across individuals’
life courses, rising in their twenties and thirties to a maximum in their sixties and
slowly falling thereafter. These analyses capture quite well the homeownership
increases coming from aging societies and also describe earlier entries into
homeownership in the USA compared with German averages, though without
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Introduction 15
explaining it (Braun 2004: 5). Thus, in the 1990s, the average German bought
their rst home at age 38 as compared with age 32 in the American case (Aring
1999: 6). My explanation will suggest that this difference is due to savings-
behavior particularities generated by the German form of housing savings banks.
The major shortcoming of these studies is their dependence on existing data
which limits them, on the one hand, to the post- 1980 time period, when changes
in homeownership rates in Germany and the USA were only marginal compared
to previous decades. The historical urban homeownership data above suggest
that level differences between Germany and the USA largely preceded the time
of OECD data- collection efforts. They fail, therefore, to give plausible answers
to both the long- term changes and the long- term persistence of differences. On
the other hand, the international studies in particular have strong omitted vari-
ables biases, since crucial real estate market time series about housing prices or
rent levels have not been available.
A nal,third type of study is case- oriented, either single case or comparative,
with more historic and institutional explanatory factors. In many writings,
authors mention possible causes only in passing without providing further evid-
ence for them. Among those factors one nds: settlement structure, transporta-
tion provision, access to and costs of mortgages, ination rates and history, etc.
Köster and Mezler (1979), though citing far- reaching factors such as industriali-
zation, the historic building structure and the two World Wars’ wealth destruc-
tion in Germany without giving further evidence, nally settle on more economic
causes for Germany’s low homeownership rate such as high house prices due to
little standardization, restrictive mortgage lending and fewer homeownership
subsidies. Both Kemeny (2005) and Voigtländer (2009) argue convincingly that
the co- existence of a well- functioning rental market offers an attractive altern-
ative to homeownership (see also Kurz 2004: 51). Whereas Kemeny mainly has
in mind the non- prot housing sector that can pass on cost rents to tenants, espe-
cially when capital costs are amortized, Voigtländer puts the emphasis on the
price- control effect of competition in the private rental market, supported by
several subsidies in Germany.
In the American case, a standard narrative focuses on the extension of mort-
gage lending practices, especially after World War II (Cohen 2003; Logemann
2013). American soldiers, prompted by their desire to settle into private homes
after the hardships of World War II, bought American cars, new mass products
in shopping malls and suburban houses, nanced by government- subsidized
mortgages, increasing the American homeownership rate by 20 percentage
points. Different styles of consumption and the American welfare regime based
on democratizing mass consumption (Prasad 2012) are also commonly cited to
explain the higher homeownership rates.
Although I often agree with these common explanations of post- World War II
developments, my own explanation differs in showing that an important part of
the homeownership gap story had already occurred prior to these developments.
Figure I.5 shows the pre- World War I city homeownership rates and single-
family house rates for American and German cities. Excepting the few outliers,
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16 Introduction
German cities by urban form and tenure are already systematically different from
American cities, these latter themselves divided along a West–East divide.
Countries’ homeownership rate differences are not of recent origin or explain-
able by the latest demographic or economic developments of the past two
decades, and not even of the post- World War II housing policies alone. Differ-
ences reach back to what happened in the nineteenth century, and the data
suggest that the urban level makes an important difference.
New explanation and chapter outline
The explanation I offer is therefore more historical, arguing that pre- World
War I developments had already established long- lasting country differences; it
situates the origin of these differences in the urban context of housing produc-
tion and it localizes the differences on the production side of the coin – not the
cultural preference side – arguing that differences in the organization of the
home- nancing and construction industry were important difference makers. By
bringing in the urban context and the construction industry as explanatory
factors, I also respond to standing desiderata expressed in comparative housing
research (Kemeny 1992: 123–125; Doling 1997: 105), while the construction
industry explanation links the housing subeld for the rst time to the wider
political economy question of different production and skill regimes (Busemeyer
and Trampusch 2012). The inclusion of these broader institutional spheres,
including questions of legal ownership and homeownership ideology discussed
in Chapter 4, responds to recent demands to bring more political economy into
the study of housing (Aalbers and Christophers 2014).
10
20
30
40
0255075
Percentage single-family houses
Percentage owning families
GER
US
New York
Providence
Brooklyn
Newark
Jersey City
Cincinnati
St. Louis
Allegheny
Milwaukee
Louisville
St. Paul
Baltimore
Detroit
Kansas City
Washington
Omaha
New Orleans
San Francisco
Denver
Philadelphia
Indianapolis
Aachen
Altona
Barmen
Berlin
Bochum
Kassel Köln
Krefeld
Danzig Essen
Frankfurt a.M.
Gelsenkirchen
Halle a.S.
Hannover
Kiel
Königsberg
Magdeburg
Stettin
Wiesbaden
Dresden
Nürnberg
Figure I.5 Urban homeownership and single-family house rates pre-World War I.8
Source: Baron (1911), RWZ (1918), Tygiel (1979).
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Introduction 17
On an explanatory level, the explanation I offer relies on insights of the his-
toric institutionalist literature in that they respond to an empirical puzzle, namely
that they do not rely on xed cultural preferences and contain a macro- historical
view of institutions (cf. Thelen 1999). It contributes to the study of persistencies
in economic development (Nunn 2014). The overall argument draws upon the
idea of path dependencies, as recently also applied to housing policies (Bengts-
son and Ruonavaara 2010), i.e., historically distant events (critical junctures)
have set countries on different trajectories that are hard to reverse (Mahoney
2000). I also draw upon the path- dependence emphasis on historical sequences:
it is not the mere presence of an institution in a country that makes the differ-
ence, but also the historical moment when it emerged because it prevented
alternative institutions from emerging. I do not adhere strictly to path-
dependence tenets, as those explanations have sometimes been criticized for not
considering possible path- breaking actors (Streeck and Thelen 2005). I therefore
try to make plausible in each chapter why one path was taken in one country
while remaining undeveloped in another country. But the basic idea that histori-
cally distant events can still have their causal say and that some developments
are harder to reverse than others pervades much of the argument.
The research design most apt to highlight the country differences through
time is the case study, as it is sensitive to the individual historic trajectories
within cases. The USA and Germany are chosen as typical cases of the country
groups originally juxtaposed by Kemeny. They are dissimilar with regard to the
outcome variable and stand for high- homeownership countries (with high initial
levels) and low- homeownership countries. Their absolute size and similar back-
ground development late industrialization and urbanization privileges them
over other typical cases. Within cases, I am able to exploit inter- city variations
to accommodate different urban regions such as the American West and East or
the Prussian mainland and the Rhineland, but I do not undertake comparative
process tracing. The case studies, though having a value of their own, are also
meant to be exploratory in building new hypotheses that Chapter 4 supports with
correlational – not set- relational reasoning (Rohlng 2012: 47). The scope of
the argument determines the use of data which rely heavily on the existing writ-
ings of historians and social scientists about the history of individual cities,
general urbanization history and the history of housing politics. The book thus
nds its limits in the richness of this material which is abundant in urban history,
limited in housing nance history and scarce in construction history. I enrich this
material with selective data about international, interregional and city housing
variables. Furthermore, I draw selectively upon primary sources such as con-
temporary reformers’ writings, key works informing housing policy, and parlia-
mentary debates or public press coverage.
The rst three chapters each focus on one important variable in the produc-
tion of housing: urban land, housing nance and the residential construction
sector. Each chapter is organized along the diverse- case comparison between the
German and the American historical trajectories, and readers interested in only
one of the three institutional domains or one of the countries can easily nd their
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18 Introduction
way through. Chapter 4 represents an attempt to generalize the two- country nd-
ings to more cases and to bring questions of legal ownership and the political
idea of homeownership into an extended explanation. Readers interested in the
general argument of the book or in how my ndings might affect their specic
country case can turn to the broader picture offered in Chapter 4 and the
Conclusion.
Chapter 1 starts with urban history to explain why, by World War I, the USA
had developed a predominantly suburbanized single- family house type of city,
while German cities had become rental tenement cities. It localizes the causes
not only in the presence or absence of feudal heritage – land restrictions, strength
of municipalities, fortications – but also in the municipal governance that
emerged during the urbanization wave in the nineteenth century. While German
cities were organized in a corporatist form with municipal socialism, the early
democratized American cities developed mainly as private cities. The distinction
resonates with later welfare- type descriptions at the national level. Its main con-
sequence for the already historical homeownership gap shown in Figure I.5 was
the accessibility of urban land. In American cities the uncontrolled private settle-
ment or the suburbanized subdivision and construction through private com-
panies made owner- occupied units much more accessible than in Germany,
where urban land, though privately supplied, was under rm municipal regula-
tion. The chapter shows that cities with lower shares of single- family houses
around the time of World War I tend to have signicantly lower homeownership
rates today, suggesting a long- term effect of the historically constructed housing
stock.
Chapter 2 turns to housing nance as an important ingredient in the extension
of cities as either suburbanized or compact cities prior to World War I. When the
late nineteenth- century banking systems became established, mortgage credit
also gradually moved from traditional lending networks to specialized mortgage
lending banks. Germany adopted rst a bond- nanced type of mortgage bank
that spread particularly throughout Central and Northern Europe up until World
War I. Due to their organizational set- up and protability, these banks, often
founded for agricultural purposes, turned into the major nancers behind rental
building construction. In the USA, by contrast, savings and loans associations
(SLAs) developed as specialized housing banks based on deposit collections and
a preference for single- family house units. The foundation of similar institutions
in Germany was prevented by the competing pre- existing savings banks and
non- prot housing associations, the origin of the social rental tradition. The
German building societies (Bausparkassen) did not emerge until the 1920s and
their considerable growth began as late as in the 1950s.
Chapter 3 turns to another supply- side ingredient of housing, i.e., the organ-
ization of the residential construction sector for single- family houses. Drawing
upon literature on the political economy of vocational training regimes, I
describe how Germany developed a crafts- based production of custom- built
single- family houses of solid building materials. The political support in favor of
the traditional craftsmen sector and the collectively nanced vocational training
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Introduction 19
system impeded the rise of stronger mass- production modes of housing that
would have made single- family houses more affordable in the lower market
segment. In the USA by contrast, a wooden construction culture allowed for pre-
fabrication in single- family house construction beginning in the nineteenth
century. It created favorable conditions for capital- intensive low- skill mass pro-
duction of conventional houses and a post- World War II sector of mobile homes
that brought homeownership within reach of lower income households. While in
Germany the single- family house remained a status good produced on demand
by skilled craftsmen, American single- family houses became car- like mass prod-
ucts, requiring less skilled labor.
Chapter 4 brings the ndings of all three previous chapters to the general
level of OECD countries, providing unique empirical evidence: the more coun-
tries are devoted to a collectively nanced vocational training system, the more
countries developed bond- based mortgage nance and the more their cities had
developed as compact tenement cities by 1900, the lower their national and
urban homeownership rates today. Or, in other words, the lower the collective
skill investment in the construction sector, the more countries relied on deposit-
based mortgage nance and the more their cities had suburbanized as single-
family house cities by 1900, the higher the homeownership rates today. While
these generalizations are well supported for the English- and German- speaking
countries, the historically compact Southern and Eastern European and Scandi-
navian countries with high- homeownership rates today are evidently counter-
examples. Two comparative factors explain these trajectories: rst, these
countries developed earlier and more intensively institutions of horizontal prop-
erty than did the German- speaking countries. Second, as a brief history of
homeownership ideology shows, the political idea of spreading homeownership
more broadly found stronger support in those countries’ party systems. While
conservative parties defended homeownership everywhere, resulting in the rst
housing laws around 1900, left- wing parties defended it more actively in Scandi-
navian countries, the Anglo- Saxon two- party systems and Southern Europe than
in Germany and neighboring countries. These two factors help explain why
today’s cities not only developed country- specic owner- occupied single- family
house and rental tenement cities but also owner- occupied apartment- building
cities.
For readers interested in the general argument, the Conclusion gives a detailed
summary of the previous chapters. It raises puzzling questions that emerged
during the book’s chapters, but these will have to be addressed in future work.
Notes
1 This is not to deny that the initial differences of country- level international homeown-
ership rates were also due to the different forms of land tenure in agriculture, with more
feudal regimes showing more tenants and the early democratic regimes showing more
peasant owners, as Annaniassen (2006a) argues for Norway. Different European
regions also display different rural settlement patterns: politically, more liberal nations
rather contain more dispersed settlements and smaller villages (Dovring 1960). These
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20 Introduction
averages most certainly conceal regional differences that reect geographical variations
and different feudal histories whose complexity goes beyond this book.
2 Methodological note about home ownership statistics: there are ve different measures
that one can distinguish.
First, there is the unit-baseddenition which counts all owner- occupied units and
divides them by all units. This denition prevails for the data based on the countries’
housing censuses and I rely on it for the earliest periods. First, it depends on what
counts as “owning” in critical cases where the bundle of rights of owner- occupiers is
restricted (they cannot freely sell the underlying land or unit, for instance) or entirely
unregulated. I followed the existing denition which counts many owner- occupiers
in the Global South in spite of unclear property rights. I decided to count “cooperative
ownership” in the Scandinavian countries as “owner occupation.” For even though the
bundle of rights was restricted in the early days, cooperative owners had to put money
down for housing, which is essentially different from renting. Second, the unit- based
denition depends on what counts as a unit and on what belongs to the housing stock.
Most common international comparisons are based on UN (UN 1974; Doling 1997: 35,
154) or EU collected data that merely repeat the respective national statistical deni-
tions which differ quite considerably (Behring et al. 2002). Though OECD countries
adopt quite similar denition of housing unit (cf. Donnison and Ungerson 1982: 42) the
US’ inclusion of trailers, seasonal and mobile homes is an exception (US- Census
2013), constituting around 7 percent of the housing stock with signicantly above-
average homeownership rate. These units, were they statistically signicant, would
probably not count as housing units in Germany, for instance. The housing stock can
differ as to whether one includes recreational housing units such as tourist cabins, sec-
ondary residences, trailers, ships, seasonal housing units and vacant or temporarily
unoccupied units. An intra- European comparison of what various national statistical
institutes count in the housing stock of the homeownership rate reveals the German
denition to be among the most conservative (Destatis 1989: 7; SE/CZR 2004), i.e.,
were other countries to adopt the German denition, their homeownership rate would
be even higher. This observation holds also for the US–German comparison: as the US
Census denition of homeownership rate includes seasonal and other mobile units, it
tends to be lower than it would be according to the German denition. The unit- based
denition is distorted by war- time destructions such as in Germany in the 1950s, when
the ofcial unit- based homeownership rate is given as 39.1 percent. Air- raid destruc-
tions of predominantly urban tenement housing had reduced the overall housing stock
and two million people still lived in barracks with many others doubling up, 35.6
percent of households subleasing and the secretary of housing estimating a housing
decit of 4.8 million units, mostly rental (Schulz 1994: 32–35). I will therefore rely on
the more realistic household- based homeownership rate of 26.7 percent in 1950
(Glatzer 1980: 246).
Second, there are household-based denitions which count all owner- occupying
households divided by the overall number of households. This denition, based on rep-
resentative survey data, began to replace the unit- based data from the 1980s onwards
and I rely on them for the more recent data. Some comparisons differ depending on
whether some residual tenancies such as “free- of-charge” or “family housing” is
counted in. Whenever possible, I did not count these categories as owner- occupation.
Household- based numbers are usually a bit higher than the unit- based numbers because
one evades the problem to assess the overall stock. It is also higher because surveys
tend to have a bias in favor of the owner- occupying middle- classes. This seems to be
particularly true for the Eurostat surveys which yield considerably higher numbers than
even national surveys. This is why, where possible, I relied on non- Eurostat sources to
not distort the comparison with non- EU countries.
A third denition is population- based and count the population living in owner-
occupied households divided by the population (Braun 2004). This denition leads
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Introduction 21
to higher homeownership rates than the former due to the statistical prevalence of
families among the owner households. It is important when looking, for instance, at
socialization effects of homeownership but does not play a role in the comparative
data here.
Fourth, a property-based denition counts the number of households owning real
estate. In many countries tenants own property which they do not occupy and numbers
according to this denition are higher than for the household- based denition. Yet, this
does not seem to distort the nding about the low German homeownership rate. The
latest ECB wealth report reveals German households are among the fewest (17.8
percent) to own non- occupied real estate, conrmed by Luxembourg wealth study data
(Sierminska et al. 2013). Countries with strong rent price restrictions and therefore rich
sitting tenants, a vacation home culture and low banking investment alternatives score
highest according to this ownership denition (up to over 50 percent) (ECB 2013: 24).
Especially, when the property- based denition adjusts for the actual wealth of property
this denition is important for comparative wealth studies of different housing tenures.
A fth denition (private- property) counts all residential real estate privately owned as
opposed to the one owned by the state (or corporations) (Jenkis 2010). This denition is
important in the context of communist countries, but also in Western countries, where
cooperatives or corporations had large shares of the overall real estate. I rely on this
number as proxy for owner- occupation in some communist countries where the remain-
ing private property strongly correlated with single- family-house owner occupation.
Existing synoptic tables about tenure rates are (Atterhög 2005: 17; Doling 1997:
159). For this book, however, I mainly rely on the following existing primary and sec-
ondary sources: Australia (Kryger 2009); Austria (UN 1958–2001), Mikrozensus,
(Statistik- Austria 2014), rent- free family housing not counted; Belgium (UN
1958–2001), Census; Canada (CMHC 2014; Harris 1984); Denmark (UN 1958–2001;
Bengtsson et al. 2006), andelsbostäder counted in; Finland (Annaniassen 2006b; OSD
2013); France (Mouillart 2015); Germany (Glatzer 1980: 246; Goebel and Haas 2013;
Sensch 2010); Greece (Emmanuel 1995; UN 1958–2001); Italy (Bernardi and Poggio
2004), ISTAT; Iceland (Sveinsson 2006); Ireland (Fahey and Maître 2004), Central
Statistics Ofce; Japan (Hirayama and Hayakawa 1995), Statistics Japan; Netherlands
(Mulder 2004; Ministerie 2013); New Zealand (Morrison 2008); Norway (Gulbrandsen
2004), Statistics Norway; Portugal (UN 1958–2001), Censos da População e Habit-
ação; Scotland (UN 1958–2001), Census; Spain (UN 1958–2001), Censos de Población
y Viviendas; Sweden (Bengtsson 2006), SCB; Switzerland (UN 1958–2001; BFS
2015); UK (England) (Meen et al. 2016); United States (US- Census 2011, 2016);
Eastern Europe (UN 1958–2001; Hegedüs 2012: 15), Eurostat; Latin America (UN
1958–2001), CEPALSTAT; Asia: Statistics Singapore; Urban China (Chen et al.
2013); South Africa General Household Survey, partially plus fully owned; Russia
(USSR) and (former) Soviet Republics, Narodnoe khozyaistvo SSSR 1922–1982,
(Andrusz 1984; Shleifer and Treisman 2014), the numbers before 1990 are urban
housing in private property only, a small share of private rentals must be discounted;
Greenland, Statbank Greenland; African and Oceanic countries (UN 1958–2001,
2016), HOFINET; Statistics Indonesia.
3 By “Germany” I refer to West Germany for the post- World War II period and I refer
explicitly to the “GDR” where necessary.
4 See, for instance, Saunders: “The popularity of the twentieth century tenurial revolu-
tion in Britain is testimony to the strength of 800 years of a cultural tradition which is
distinctive from that of mainland Europe” (in Doling 1999: 164), which could be seen
to be rooted in a political philosophy termed “possessive individualism” (MacPherson
1967[1964]). Or also:
The desire and willingness to move and the inclination to newness and change,
often paraphrased by the word “adventure,” are widespread character traits of
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22 Introduction
Americans […]. Their restless quest for happiness, advantage and innovation has
played a crucially important role in designing the improvised American urban land-
scape and the nation’s suburbanization.
(Holzner 1996: 45)
Cullen (2003: 133f.) is also among those anchoring ownership of detached houses in
the American dream tradition.
5 For a list of these surveys in Germany see Biedenkopf and Miegel (1978: 18ff.) and in
the USA see Megbolugbe and Linneman (1993: 660).
6 See Weber (1899: 147) for the nding that settlement area does not determine urban
structures.
7 The fact that Reagan’s and Thatcher’s governments also wanted to cut homeowner
subsidies ts less well into the picture (Pierson 1989). Generally, there is still a lack of
empirical precision of mechanisms through which the trade- off is supposed to operate,
but see Mertens (2015).
8 German data refer to homeowners generally, not only to owner- occupiers, and are
therefore even overestimated. Due to low construction in the war years I can combine
the German 1918 building structure with the 1907 ownership data.
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... Over the past few years, reduced housing affordability has become a major policy concern for various cities across the world. Traditionally, housing privatization or 'the transfer of management, residual rights, risks and/or finance … from the public to the private sector' (Whitehead 1993: 110), along with demographic change and urban housing shortage (Kohl, 2017), has been used as a framework for understanding declining urban housing affordability. More recently, however, financialization scholarship demonstrated that the advent of mortgaged homeownership, speculative investments in rental housing and new modes of financialized urban governance have deepened the crisis even more (Aalbers, 2019). ...
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