Impact of housing market transformation in Germany on affordable housing: the case of North Rhine-Westphalia
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Impact of housing market transformation in Germany on affordable housing: the case of North Rhine‑Westphalia Philipp Deschermeier1 · Heide Haas2 · Michael Voigtländer3 Received: 24 January 2018 / Accepted: 14 December 2018 © Springer Nature B.V. 2019
Abstract The German housing market has changed significantly since the first decade of the new millennium. A considerable amount of public sector and company-owned employee housing has been sold off, while a number of large publicly listed real estate firms have emerged. This has been particularly evident in North Rhine-Westphalia. This paper examines the consequences of these changes for the development of rental prices, especially at the lower end of the market, by analysing 300,000 advertisements for rental homes in the ten largest cities in North Rhine-Westphalia. The results show that on average, and taking quality and location into account, the least expensive rental homes are offered by larger housing organisations with co-operatives being especially well priced, while there are only moderate differences between public companies and big private companies. One explanation may be that the rent policies of large private and public providers have converged, while co-operative housing associations still provide rental homes considerably more cheaply. Keywords Housing market · Hedonic regression · Rental prices · Germany
1 Background Within the last two decades, the European rental market has undergone both a huge shift in the structure of housing supply and a change in housing policies. On the one hand, the provision of social housing (expressed as a percentage of the total housing stock) has been
* Michael Voigtländer [email protected] Philipp Deschermeier [email protected] Heide Haas [email protected] 1
Institut Wohnen und Umwelt (IWU), Darmstadt, Germany
2
Institute of Sociology, George-August-Universität, Göttingen, Germany
3
Research Unit for Real Estate and Financial Markets, Institut der deutschen Wirtschaft (IW), Cologne, Germany
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declining in most European countries, as former municipal enterprises have been sold to private housing companies, co-operative housing associations and small-scale private landlords (Whitehead and Scanlon 2007). On the other, former supply-sided subsidies have been replaced by demand-sided instruments that seek to make rents more affordable to low-income households (Haffner 2009). This was the case in Germany in 1990 when the “Wohngemeinnützigkeit”, the charitable status of public housing companies, was abolished. This included the replacement of object subsidies for publicly owned housing companies with housing allowances. Since then, municipal housing companies have been more independent in their objectives and rent policies (Voigtländer 2007), but have also been compelled to adopt more profit-oriented business models (Kemp 2011; Elsinga et al. 2014; Walker 2010). In contrast, private providers have increasingly expanded their portfolio to include th
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