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The neo-liberal restructuring of urban housing markets and the housing conditions of low-income households: An international comparison

Kadi, J.

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The Neo-liberal Restructuring of Urban Housing Markets and the Housing Conditions of Low-income Households

Justin Kadi

The Neo-liberal Restructuring of Urban Housing Markets and the Housing Conditions of Low-income Households: An International Comparison

Justin Kadi

       

THE  NEO-­‐LIBERAL  RESTRUCTURING  OF  URBAN  HOUSING  MARKETS  AND  THE  

HOUSING  CONDITIONS  OF  LOW-­‐INCOME  HOUSEHOLDS:    

AN  INTERNATIONAL  COMPARISON  

Justin Kadi  

   

                                         ISBN.978-94-6259-423-4  Copyright © 2014 by Justin Kadi. All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, without prior permission of the author. (j.kadi@gmx.net)

       

THE  NEO-­‐LIBERAL  RESTRUCTURING  OF  URBAN  HOUSING  MARKETS  AND  THE  

HOUSING  CONDITIONS  OF  LOW-­‐INCOME  HOUSEHOLDS:    

AN  INTERNATIONAL  COMPARISON

ACADEMISCH PROEFSCHRIFT

ter verkrijging van de graad van doctor

aan de Universiteit van Amsterdam

op gezag van de Rector Magnificus

prof. dr. D.C. van den Boom

ten overstaan van een door het College voor Promoties ingestelde

commissie, in het openbaar te verdedigen in de Agnietenkapel

op woensdag 26 november 2014, te 10:00 uur

door

Justin Kadi

geboren te Wenen, Oostenrijk

Promotiecommissie:

Promotor: Prof. dr. S. Musterd Copromotor: Prof. dr. R. Ronald Overige leden: Prof. dr. P.J. Boelhouwer Prof. dr. J.F. Doling

Dr. R.K. Jaffe Prof. dr. J.B.F. Nijman

Prof. dr. W.G.M. Salet Faculteit: Faculteit der Maatschappij- en

Gedragswetenschappen

Contents   Acknowledgments

7

Chapter 1 Introduction

11

Chapter 2 New York

Undermining Housing Affordability for New York’s Low Income Households: The Role of Policy Reform and Rental Sector Restructuring

43

Chapter 3 Amsterdam

Housing for the poor in a neo-liberalizing just city: Still affordable, but increasingly inaccessible

75

Chapter 4 Comparing New York, Amsterdam and Tokyo

Market Based Housing Reforms and the 'Right to the City': The Variegated Experiences of New York, Amsterdam, and Tokyo

109

Chapter 5 Vienna

Re-commodifying housing in formerly ‘Red’ Vienna?

147

Chapter 6 Addendum

Conclusion and discussion Summary Samenvatting Curriculum Vitae

179 197 209 223

     

ACKNOWLEDGMENTS

7

Acknowledgements

Preparing this dissertation has been an exciting, demanding and at times also very challenging experience. Surely, it wouldn’t have been possible without a number of people that helped me along the way. First and most of all, I’m indebted to my two supervisors, Sako Musterd and Richard Ronald, for the enormous time and effort they invested into me and into my research ideas. I have been very fortunate to have two such committed, motivating and professional supporters, who made the PhD a truly rewarding experience. Richard Ronald introduced me to the world of publishing and taught me a lot about academic paper writing. From the very beginning, he was deeply engaged with my work and always provided immediate and extremely helpful feedback, never stopping short of also pointing me to the weaknesses in my arguments in a very constructive manner. Richard, thanks for all the attention and guidance, for showing me how to work effectively and, not least, for the good time. Sako Musterd taught me a lot about empirical research and quantitative methods and showed me how to do critical empirical research. I am deeply thankful for the great deal of trust he put into my research ideas from the very beginning, which not only motivated me to pursue a PhD in the first place, but also, in many moments during the last four years, helped me to overcome my doubts. Sako, thank you for the professional engagement with my work, for the extremely helpful guidance along the way and for such a motivating supervision.

I want to express my gratitude to the Urban Geography research group at the Department of Geography, Planning and International Development and the AISSR at the University of Amsterdam for providing me with the opportunity to do a PhD and to do so, mostly, from abroad. Special thanks goes to Barbara Lawa and Puikang Chan together with the secretariat of the department for their administrative support. Also, I benefitted a lot from the possibility to come to Amsterdam during the last phase of writing and to spend four months at the department, for which I would like to thank the AISSR and the Urban Geography research group, who supported my stay.

ACKNOWLEDGEMENTS 8

I had the chance to present my work at a number of conferences and seminars, among them the RC21 Conference Amsterdam 2011 and the ISA World Forum in Buenos Aires in 2012, and I would like to thank the organizers and colleagues for very insightful events as well as the Urban Geography research group for co-funding some of my trips. I am thankful also to the organizers of the RC21 Summer School, Yuri Kazepov and Jeremy Seekings, for an extremely insightful week on comparative urban studies in Amsterdam in the summer of 2011.

Thanks are due to the Centre of Regional Science at the Vienna University of Technology, where I spent most of my working time during the last four years and also produced large parts of this book. I benefitted from the good working atmosphere and all my supportive colleagues at the Centre.

There are a number of people who helped me along the way and deserve special mentioning. I thank Manuel Aalbers for very helpful feedback on my presentations at a number of conferences, at various occasions, and also for valuable comments on my writings, particularly Chapter 4 of this book. Mara Verlic has been a key person for the completion of the project. She has probably read most of what I have written and has provided invaluable feedback. I have learned a lot also from our numerous discussions and the common teaching that helped me sharpen my thinking and arguments.

I’m thankful to Katinka Wijsman and Sako Musterd for translating the English summary of this book into Dutch – which I would not have been able to do myself.

Additionally I want to thank the following people, who have provided useful comments during the fieldwork phase, at conferences or seminars, or read and commented on parts of the text: Mike Berry, Paul Watt, Ewald Engelen, Andrej Holm, Ray Forrest, Marija Elsinga, Rudolf Giffinger, Gerlinde Gutheil-Knopp-Kirchwald, Johannes Suitner, Nicole Harb, Ate Poorthuis, Andrew Switzer, Alexander Hamedinger, Ali Madanipour, Sabine Knierbein, Alex Schafran, James DeFillipis, Victor Bach, Jerylin Perine, Michelle de la Uz, Alex Schwartz, Ingrid Ellen,

ACKNOWLEDGMENTS

9

David Hanzel, Jeroen van der Veer, Michael McKee, Pieter Terhorst, Dick Schuiling, Annette Freyberg-Inan, Julienne Chen, Julia Kufner, Michiel van Meeteren, Peter Pelzer, Frank Petrasch, Christian Lennartz and Iver Kjar.

Parts of the book have been published elsewhere and I would like to thank the anonymous referees and commentators for giving me advice on how to improve my arguments.

Finally, I would like to thank my family and friends, who were so supportive in all phases of this research and never doubted the usefulness of what I have been doing. The biggest thanks go to Lisa – for everything.  

Justin Kadi

Vienna, June 2014

 

 

 

Chapter 1: Introduction  

   

CHAPTER 1

13

 

 

 

 

 

 

 

 

1. INTRODUCTION

The transformation of cities under conditions of accelerating neo-liberalization has become a key focal point of academic and political debates about urban development in recent years. The contemporary proliferation of free market ideals as a guiding principle of policy making at different scales is considered to be central to understanding the changing social, political, economic and spatial order of cities in the early 21st century. As a field of research, studies on the neo-liberal city acknowledge the institutional embeddedness of urban development in wider political-economic structures. The regulatory changes from a Fordist to a Post-Fordist regime since the 1970s and the concomitant dominance of market principles in policy-making are assumed to be a decisive institutional shift in this respect. There is by now a wide literature available that attempts to disentangle the ramifications of market-oriented regulatory restructuring for urban development in different spheres, such as urban governance, local economies or urban housing markets.

This book contributes to the latter strand, i.e. the recently expanding literature on the neo-liberal restructuring of urban housing markets (Aalbers, 2004; Aalbers & Holm, 2008; Andersson & Turner, 2014; Hedin et al. 2012; Musterd, 2014; Uitermark, 2007; Watt, 2009). The

INTRODUCTION 14

starting point is the notion that housing markets in many cities, particularly in Western Europe, were shaped in important ways by the Fordist regulatory regime that dominated the period of the 1950s and 60s. In the course of the building-up of post-war welfare states and the accompanying intensification of measures to regulate housing markets, de-commodified rental housing stocks in many cities expanded. Alongside the gradual retreat of welfare arrangements from the mid-1970s onwards, however, policies to de-commodify housing have also lost momentum, giving way to the promotion of private market provision. With it, the supply of housing in many cities has changed. Social rental housing stocks have started to decline, rents in formerly regulated segments are being adapted to market rates and homeownership has gradually gained importance.

Within this frame, this book presents four separate studies that deal with the political and academic debate about the neo-liberal restructuring of urban housing markets. Bringing together literature on the neo-liberal city, comparative housing research and comparative urban studies, the specific intention of the book is twofold. Firstly, I aim to move forward the debate about the effects of neo-liberal restructuring on the housing conditions of low-income households. There is a strong literature available that points to how de-commodified housing sectors have exerted dampening effects on housing cost levels and problems of low-income households in the past. Little systematic evidence, however, is yet available that analyzes how the re-commodification of urban housing markets has affected – and is affecting – these households in their housing conditions. The book examines this question in three highly diverse cities, New York, Amsterdam and Vienna. In doing so, the analysis adds to the second intention of the book, i.e. to contribute insights into the role of institutional context in shaping neo-liberal restructuring and its effects. While there has recently been growing interest in the neo-liberalization of urban housing markets, little remains known about differences between cities and about the influence of broader welfare and housing system contexts and its ramifications for reform pathways and effects.

CHAPTER 1

15

In the remainder of this chapter I lay out the theoretical framework for the analysis. I start out by introducing the main elements of an institutional perspective on housing, before turning to the conceptualization of neo-liberal restructuring of housing markets. I introduce the two main problems that the book is concerned with, i.e. the effects of neo-liberal restructuring on low-income housing conditions and the influence of welfare and housing system contexts in shaping reform pathways and effects in different cities. Following this, I discuss the research design and research questions addressed in the study and present the outline of the book.

1.1. Setting the scene: an institutional perspective on housing markets

Over the last two decades, in the field of housing research a quite substantial body of literature has developed that acknowledges that ‘institutions matter’ (e.g. Ball et al. 1988; Lundqvist, 1991; Harloe, 1995; Forrest & Murie, 1989; Harloe, 1995; Ronald, 2008). Most generally, this field of research is concerned with how the organization and functioning of housing markets are influenced and shaped by other social institutions. Institutional housing research, hence, deviates from neo-classical, economic perspectives on housing in that it assumes that collective rules, norms and regulatory arrangements make a fundamental difference for the forms, dynamics and outcomes of housing markets. Set within this broader field, in this book the focus is specifically on formal institutions and government regulations in housing markets.

From an institutional perspective, three dimensions can usefully be distinguished in the analysis of housing markets: housing policies, housing market structures and housing outcomes. The first dimension concerns the forms of government intervention. Berry (1983) distinguishes three elements (see Doling 1997, for a more detailed discussion): first, policies to supplement the private market through different kinds of subsidies for the construction or consumption of housing; second, policies to replace the private market through direct

INTRODUCTION 16

state provision of housing; third, policies to set the rules of the game and define the legal framework of housing provision. The latter may entail, for instance, rent and allocations regulations and land-use controls. The second dimension refers to the housing supply in a market and the type of housing that is available, at what price and under what entry criteria (Barlow & Duncan, 1994). The third dimension relates to how different groups (e.g. tenants, landlords, builders) are served by a given market along different criteria (e.g. affordability, profitability).

While these three dimensions of policies, housing market structures and housing outcomes are usefully distinguished conceptually, a key assumption underpinning institutional housing research is that they are not independent from each other. First, the adopted policies will have an influence on the structure of a market. Depending on the specific mix of interventions, a market may be dominated, for instance, by owner-occupation or by rental housing. Similarly, there may be a (small or large) social rental housing stock available. Along the same lines, rent and allocation regulations will have an impact on the price levels and the possibilities for different households to enter certain market segments. Second, through specific housing market structures, government policies will also exert influence on the long-term outcomes of a market. Depending on the adopted policies, for instance, different housing conditions may be available for a household under a given labor market position.

As Doling (1997) observes, more than in other markets, policy interventions play a key role in housing. In fact, as he argues, there is today no housing market in which governments do not intervene in one way or the other. However, policy interventions have never been even over space and time; quite the contrary. The way governments have intervened have critically hinged on, and been shaped by, the political, economic and cultural context in specific places. From an institutional perspective on housing, then, a key question concerns how government policies have varied over space and time, and with what effects on market structures and housing outcomes.

CHAPTER 1

17

It is against this background that the present study is set. The specific concern is with changes in policy interventions in urban housing markets in the context of a shift from a Fordist to a Post-Fordist regulatory regime and the rising dominance of neo-liberalism as a guiding principle of housing policy making.

1.2. The neo-liberal restructuring of urban housing markets

Many Western cities, particularly in Western Europe, experienced pronounced changes in the structure of their housing markets from the 1950s onwards. Homeownership and unregulated private rental housing, which had previously dominated, gradually lost importance vis-à-vis regulated rental segments, as private or social rental housing. To be sure, in some cities the foundations for regulated rental housing were laid much earlier already. In Vienna, for instance, where relevant measures became particularly salient, in the 1920s, more than 64,000 social rental dwellings were constructed. In the rapidly growing industrializing city, severe housing scarcity and quality problems had revealed the apparent inability of the private market to provide decent housing for the working classes. Radical housing protests pressured for the construction of regulated rental housing as an alternative (Hautmann & Hautmann, 1999). Similar developments occurred, albeit on a smaller scale, in cities like Amsterdam, Berlin, or New York.

It was, however, after World-War-Two, that regulated rental segments expanded on a more significant scale in many cities. These changes to the structure of urban housing markets were embedded in changes to the political framework of housing. Roughly from the 1950s onwards, attempts were intensified across advanced Western societies to reduce the role of private actors in the provision of housing. De-commodification measures were taken to decouple housing access from private markets (cf. Esping-Andersen, 1990). This entailed, among other measures, the granting of object-side subsidies, the construction of social rental housing, and the implementation of rent and allocations regulations in

INTRODUCTION 18

parts of the stock. These interventions, increasingly, not only followed social objectives, but also economic motives: Low housing costs would free up resources for household consumption, keep wage claims low and, in doing so, foster international competitiveness. In that, de-commodified housing would become a relevant measure in Keynesian demand-side management and the post-war welfare state.

Unlike classical spheres of welfare like social security and health care, housing never became fully provided by the state. Also in the most comprehensive welfare states, provision always consisted of a mix of private and public actors. It is also in this context that Torgersen (1987) has famously referred to housing as a wobbly pillar under the welfare state. Nonetheless, there is general agreement that with the expansion of other welfare spheres intervention into housing also expanded to become an important field of post-war welfare arrangements (Boelhouwer et al., 1992; Kleinman, 1996; Doling, 1997).

Harloe (1995) has, probably most prominently, generalized this trend for the US and Western Europe. He distinguishes between a first phase of housing policies, which roughly ranged from the emergence of industrialism through the economic recession of the early 1930s and a second phase, between 1945 and 1975. In the earlier period of liberal capitalism, state intervention into housing was still limited, but first attempts were made to counter the housing problems of the working class through public provision, reflecting growing skepticism concerning the capacity of market actors among policy makers (Boelhouwer & Priemus, 1990). In the second phase, which Harloe refers to as post-war welfare capitalism, intervention was expanded. State-funded housing provision was consolidated to directly ensure the availability of affordable housing and governments adopted a more central role in the provision of housing.1

The expansion of post-war de-commodification measures became manifest in urban housing markets. In Western Europe, many cities

1 Harloe included Britain, France, Germany, the Netherlands, Denmark and the USA in his study. There are other Western countries, like Belgium, where de-commodification remained very limited also in the post-war period (Kesteloot & Cortie, 1998).

CHAPTER 1

19

developed stocks of social rental housing. The Dutch system became particularly comprehensive. According to de Swaan (1988), the Dutch welfare state underwent ‘hyperbolic expansion’ between 1945 and 1974, with housing interventions and particularly social rental housing provision playing a central role. Nation-wide, the sector grew from less than 15% in 1947 to more than 30% in the mid-60s (Musterd, 2014). In Amsterdam, it had become the largest sector in the market by 1970. In the liberal US context, the welfare state never attained a role as central as in many West European countries and also housing interventions remained much more limited (Kemeny, 1995). Accordingly, de-commodified stocks in cities remained much smaller. Nonetheless, there are exceptions, like New York, where regulated rental housing gained more significant size. Rather than through public housing, which never exceeded 10% of the city’s stock, the subsidized private rental housing stock became central to affordable housing policies (DeFillipis & Wyly, 2008).

Since the mid-1970s, post-war welfare states have come under growing pressure. In the context of the global oil crisis, the prevalence of stagflation and mounting budget shortages the post-war economic model has been questioned. Keynesian anti-cyclical policy, demand-side management and state service provision have come under pressure, also driven by the rise of neo-liberalism as a dominant ideological reference point for policy making. Housing has not remained immune from these pressures. Embedded in a broader restructuring of welfare states, also housing policies have been gradually adapted to conform to neo-liberal ideals of free markets, private property and individual responsibility (Forrest & Murie, 1988; Boelhouwer et al., 1992). Measures to de-commodify housing have gradually lost momentum and the overall direction has become one of (re-)commodification. Increasingly, direct housing provision has been questioned in light of attempts to progress to a residual welfare model. Social rental housing as a mainstream tenure has been questioned in a number of countries (Harloe, 1995), giving rise to the promotion of homeownership (Ronald, 2008). Direct production subsidies for rental housing have been reduced, programs to sell off or demolish parts of the tenure have been implemented, and measures to

INTRODUCTION 20

deregulate rents, also in private rental housing have been adopted.2 For Harloe (1995), these developments mark a third phase of housing policies. The phase of welfare capitalism is being replaced with a phase of post-industrialism. Intervention into de-commodified housing is reduced and poor households have to rely increasingly again on the private market to find accommodation.

The UK represents an early case of re-commodification. From the mid-1970s onwards, Thatcher’s ‘Right-to-Buy’ scheme has promoted the large-scale sale of over 2 million council housing units to sitting tenants, eroding not only the affordable housing stock but also the material and symbolic basis of the welfare state (Forrest & Murie, 1988). In the Netherlands the political commitment to de-commodified housing endured through the 1980s (Boelhouwer et al., 1992). Since 1990, however, measures have been taken to reform the Dutch welfare state accompanied by a preference away from social rental housing.3 In the US, reductions in direct production subsidies were accompanied by the targeted demolition of public housing units in the HOPE VI program, alongside measures to promote homeownership growth (Goetz, 2003; Ronald, 2008).

The (re-)commodification of housing has been driven by national attempts to restructure the welfare state. In some cases, however, local governments also played an active role. Globalization and economic restructuring have prompted a greater emphasis on urban competitiveness, entrepreneurial place-making and urban renaissance in local policy-making. In a number of cities, the reduction of de-commodified housing and the promotion of market-driven real estate development have featured as a strategy to relax local budget shortages and to foster local economic growth (Harvey, 1989; Hackworth & Smith, 2001). Redeveloped housing markets and ‘livable’ neighborhoods have also become central concerns for many cities in attempts to attract 2 In the Netherlands, initially, selling off and restructuring parts of the social rented stock have also been used as an earning model of housing associations; with the money gained they were able to realise new social housing. 3 In Amsterdam, the commitment to de-commodified housing lasted somewhat longer and the decline of the social rented sector, in absolute terms, only started in 2000 (Musterd 2014).

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21

affluent urbanites and to deliver the promises of creative city strategies (Lees, 2008). In London, for example, local councils initiated stock transfers of council housing in order to redevelop land and inner-city property through private development (Watt, 2009). In Berlin, the city promoted both the sale of social housing units to tenants and the sale of entire public housing companies (Aalbers & Holm, 2008).

In the European context supra-national policies have also become important in recent years and have put pressure on de-commodified housing. The EU has no direct competence for housing, but has exerted influence through instructing national governments to change policies under EU competition directives. For the EU, financial government support for social housing harms competition. Sweden is one country that has been affected. The Swedish reaction has been to abolish support for non-profit housing companies and to force them to act as for-profit providers (Elsinga & Lind, 2013: 969).4 The Netherlands is another country that has changed policies towards social housing in reaction to EU legislation (Priemus & Gruis, 2011).

The de-commodified structure of post-war urban housing markets has, hence, come under pressure from different scales. National welfare state restructuring, local entrepreneurialism and, in the European sphere, supra-national competition policies have played a role. In this context, social rental sectors have been reduced, rents in regulated market segments have been raised closer to, or near to market levels and homeownership sectors have grown (Aalbers, 2004; Musterd, 2014; Watt, 2009; Aalbers & Holm, 2008). Urban housing markets have become subject to neo-liberal restructuring. Amsterdam is an illustrative case, where this has become particularly visible in the city’s tenure structure. Driven by national and local reforms, and pressured by the EU, the social rental sector has declined sharply since the 1990s, from 58.5% in 1995 to less than 50% of all dwellings in 2009; from 2000 onwards the decline was also in absolute numbers. On the contrary, the homeownership sector

4 In that, EU interventions have reinforced neo-liberal shifts in the Swedish housing system that had been under way for much longer already (Hedin et al. 2012).

INTRODUCTION 22

has tripled, from 7% to 21% (O+S). We will discuss the Amsterdam case further in Chapter 3 of this book.

1.3. Neo-liberal restructuring and the housing conditions of low-income households

While there has been growing attention to the neo-liberal restructuring of urban housing markets in recent years (Aalbers, 2004; Aalbers & Holm, 2008; Andersson & Turner, 2014; Hedin et al. 2012; Musterd, 2014; Uitermark, 2009; Watt, 2009), there is yet limited systematic evidence available as regards the effects on market outcomes in terms of housing conditions. This is quite remarkable, given that there is a strong literature that deals with the effects of de-commodification measures on urban housing conditions, particularly for low-income households. This work, which began to develop in the 1990s, identified positive effects of large social rental sectors, allocation and rent regulations in terms of housing costs and spatial concentration for the poor (see Musterd & Ostendorf 1998; Marcuse & Van Kempen 2000; Fainstein, 2010). These arrangements contributed to a decoupling of housing conditions from labor market inequalities. In cities with de-commodified housing sectors, then, it was less the case that poor households could not afford decent accommodation, respectively were relegated to low-quality housing in the most unattractive locations. De-commodification mitigated housing problems for the poor in terms of housing costs and spatial exclusion. For some this has also made cities with larger de-commodified stocks places of greater justice (Fainstein, 2010).

The literature on de-commodified housing and housing conditions of low-income households has been focused foremost on the European context. In fact, much of the research emerged out of a concern to make sense of the evidence that in European cities, apparently, low-income households would fare better in terms of housing conditions than in many US cities. The higher degree of de-commodification in European cities that emerged out of more comprehensive post-war welfare state interventions was found to be an important factor in this respect. One can argue, however,

CHAPTER 1

23

as hinted at above, that (also in a number of US cities), de-commodified stocks have expanded under conditions of welfare expansion, albeit large local differences apply. For New York, for instance, it has been shown, along the same line of reasoning as in European cities, how de-commodified market segments have, to a certain extent, mitigated housing problems of low-income households (Wyly et al. 2010).

With the progression of housing neo-liberalization, the de-commodified housing sectors in cities that were found to be beneficial in the past, however, have come under pressure. This has coincided with changes to housing demand. In the context of accelerating globalization, the economic structure of Western cities has undergone decisive changes. Most centrally, a shift occurred from manufacturing to service dominated economies. Economic restructuring has induced a rise in high-paid jobs in the producer service sector, and also triggered a growth in low-paid service jobs (Sassen, 2001). Beyond the new service economy, labor markets generally have become more flexible, part-time work has become more common, while social security benefits for the unemployed have been reduced in attempts to change from welfare to workfare service provision. As a result, in many cities, incomes at the top have been growing rapidly, while at the bottom they have only risen slowly and in some cases even stagnated or fell, leading to an increasingly unequal income structure. Growing income inequality has been found to be more pronounced in some cities than in others (Hamnett, 1996; Burgers & Musterd, 2002), but an overall trend is discernible that poor households are increasingly losing ground vis-à-vis richer households.

Taken together, these developments raise questions about the fate of low-income households in contemporary urban housing markets. What does it mean when regulated rental housing, on which low-income households have relied in the past, is no longer being built and the existing stock is being reduced or de-regulated, particularly given the moderate income developments that many of these households recently experienced? How would this affect their housing situation and to what extent would it promote greater problems to find decent accommodation at an affordable price?

INTRODUCTION 24

Initial research on the matter is available in the realm of gentrification research. Relevant studies have explored how the loss in regulated rental units in gentrifying neighborhoods is affecting poor households in their ability to stay put, or to what extent neo-liberal restructuring is forging processes of spatial exclusion. Market restructuring, in this context, has been interpreted as a form of state-led gentrification. Relevant empirical research has been conducted for instance for Swedish, Dutch and US cities. In the Swedish context it was found that the reduction in public housing units through right-to-buy in the inner city of Stockholm has been accompanied by an upgrading of the population mix to higher socio-economic status (Hedin et al. 2012; Andersson & Turner, 2014). At the same time, the population in the remaining public housing properties, mainly in the outskirts of the city, has become poorer, indicating a displacement from the inner city. In Amsterdam, equally, the sale of social rental housing has led to decreasing numbers of low-income households in central areas (Uitermark & Bosker, 2014); however, direct displacement has been limited and the lack of access for new-comers has become an important barrier for the poor (van Gent, 2013). In New York, de-commodified units have acted as protective barriers for low-income households to resist displacement in gentrifying neighborhoods (Newman & Wyly, 2006), but the gradual dismantling of relevant programs has spurred displacement (Wyly et al. 2010). Taking off from this initial research, the current project starts with the hypothesis that, under conditions of moderate income developments for poor households on the housing demand side, the reduction in de-commodified rental housing in cities that follows from neo-liberal housing reforms at national, local and supra-national scales, will lead to growing problems for these households to find affordable accommodation.

1.4. Researching neo-liberal restructuring: the challenge of welfare and housing system contexts

As critical geographers have noted, one problem with research on the neo-liberal city is that it often remains blind to context. Thereby, generally applicable policy pathways and convergence to a singular neo-

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25

liberal model are seemingly assumed. Indeed, Leitner et al. (2007) identify that a compelling assumption has been that advances in neoliberal discourses, policies, and subjectivities have shaped a ‘neoliberal urbanism’ characterized by entrepreneurial forms of urban governance, an elevated role for private sector interests in development projects, and an entrepreneurial and self-regulated approach to urban dwellers and dwellings. In that, much like early work on globalization, economic restructuring and urban change (Fainstein et al. 1992; Fainstein, 1994; Mollenkopf & Castells, 1991), much of the work on the neo-liberal city implicitly sits within a convergence framework.

As Brenner et al. (2009) argue, however, a universal understanding of neo-liberal urbanism is simplistic in that it overlooks how relevant regulatory shifts in specific places are shaped by, and premised upon, pre-existing institutional structures. It may indeed be the case that urban and housing policies across Western cities are increasingly based on a unified, simple set of ideas related to the promotion of private property rights, free markets and free trade. Actual processes of policy change, however, will critically hinge on, and are embedded in, inherited policy regimes, structures and traditions, making reforms highly contingent on local economic, political and cultural circumstances and leading to variegated pathways and effects in different places.

In housing research there is an influential literature available that highlights the highly differentiated institutional landscape that developed in post-war policy structures across Western societies. This work has shown how, similar to other welfare spheres also in housing the expansion of state interventions has taken different routes, reflecting historically established traditions, dominant ideology and power structures (Barlow & Duncan, 1994; Kemeny, 1995; Hoekstra, 2003). One way to demonstrate this has been to relate housing policy developments in different countries to Esping-Andersen’s seminal welfare state typology (1990). Esping-Andersen distinguished three welfare regime types, based on an analysis of unemployment benefits, sickness payments and pension schemes:

INTRODUCTION 26

• The liberal type is characterized by a dominant role of the market in welfare provision. The idea is that state intervention is minimized to help only those who are in greatest need, the poorest of the poor (safety net). Welfare provision is means-tested, and thereby tends to stigmatize those who receive it. Basic organizing principle is to keep direct state intervention as small as possible and to leave welfare as far as possible to the “free” market. The US and Australia represent typical examples of the liberal system.

• The social-democratic type gives a dominant role to the state. The idea is to uplift the poor to middle-class standards through comprehensive state intervention. This is achieved by granting welfare transfers on a middle-class standard universally. Relatively, the poor will benefit more from these transfers. Welfare in the social-democratic system is most decommodified (Esping-Andersen 1990) meaning that the link between the labor market position of a household and the level of the household’s welfare is weakest. Welfare is least traded as a commodity and “de-commodified” through direct intervention of the state. Typical examples of the social-democratic system are the Nordic countries, such as Sweden, Finland and Norway.

• The corporatist type is made up of a mix of state and market in the provision of welfare, and stands in-between the liberal (market-dominated) and the social-democratic (state-dominated) system. Contrary to the other two types the family has a strong role to play. The idea is to preserve the traditional status of people. Welfare is hence given to people according to their specific status, which has the effect that the welfare system is quite fragmented. A typical characteristic of corporatism is also that those who are in the system receive protection, while those who are not (yet) in the system remain unprotected. Austria, Germany and Belgium have been described as typical examples of the corporatist system.

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Comparative housing researchers have related this threefold typology to housing (see Barlow & Duncan, 1994; Hoekstra, 2003). One of the differences between countries regards the degree of influence that has been assigned to market actors and respectively to the importance of state intervention. Another, related difference regards the size and scope of the social rental sector.

• Social-democratic type: In the social-democratic type, the state has a dominant position in the provision of housing. There is a large-scale social housing sector that grants universalized access. Land-use planning is fairly strict and the state exerts strong control over land. Often land is in public ownership. Housing is most de-commodified in this type.

• Liberal type: The liberal type is at the opposite end of the spectrum. Here, the market dominates housing provision. The state only supports marginal groups directly. Hence, social housing accounts only for a small segment of the market and is commonly reserved for the very poor. Public control over land use and land ownership is fairly weak. Housing de-commodification is lowest in the liberal type.

• Corporatist type: The corporatist type is situated somewhat in-between the social-democratic and the liberal type. Here, the state, the family and the market are important in housing provision. State influence is therefore more moderate than in the social-democratic system and aimed at correcting negative effects of the market, but more pronounced than in the liberal system. The social housing sector is considerably large. Access, however, is more restricted than in the social-democratic system.

Comparative research across countries on housing neo-liberalization processes has shown how these differences in post-war interventions have mattered a great deal for shaping reform pathways. In line with Brenner et al. (2009), housing reforms seem to follow variegated patterns. In their study of housing systems in six European countries, for instance, Boelhouwer et al. (1992) find evidence for a general trend towards

INTRODUCTION 28

governmental retreat from direct housing provision in the 1980s. They reject, however, notions of convergence, because, as they argue, the institutional set-up of housing markets is “the product of a series of historical developments unique to each country, the institutions that have been established in the course of time, and the activities of government, which are influenced partly by tradition and by ideology” (ibid.: 295; see also Harloe, 1995 or Ronald, 2008 for arguments along these lines).

While there has been growing attention to neo-liberal restructuring of housing also at the city level in recent years, there is yet little comparative research available. Few studies have focused on more than one city (but see Hackworth, 2007) and even less research is available that has taken different welfare and housing system contexts into account (but see Aalbers & Holm, 2008 for a notable exception) in order to question implicit notions of urban convergence (Nijman, 2007). As a result, to date, little remains known about differences in reform pathways and effects and how they have been shaped by different regulatory contexts. It is against this background that the present study takes on three cities, located in different welfare and housing system contexts to explore the effects of the neo-liberal restructuring of urban housing markets on the housing conditions of low-income households.

1.5. The current study

1.5.1. Main research questions and analytical working scheme

Through the selection of cases and the specification of a period of analysis, the general interest of this study was narrowed down to two specific research questions. The first question that initiated the project, then, was:

How has neo-liberal restructuring affected the housing conditions of low-income households in New York, Amsterdam, and Vienna since 1990?

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My interest is specifically in how neo-liberal reforms have restructured the urban housing supply and how this has affected housing conditions. Following from that I formulated three sub-questions:

1) How have governments at different scales changed their way of intervening in the urban housing market in order to commodify housing?

2) How has this affected the housing supply?

3) How have the housing supply changes affected housing conditions for low-income households?

The focus is hence on the links between policy changes, housing supply changes and housing outcomes.

Taking off from the individual examination of the three cases, the second question concerns the comparison of them:

What are the main differences between the three cities in terms of reform pathways and effects?

Figure 1 below sketches the analytical working scheme on which the research is based. My starting point, in the left column, is that under Fordism, as part of the expansion of state welfare provision, policies were implemented for the de-commodification of different spheres of social reproduction, among them housing. This has affected urban housing markets and led to the expansion of de-commodified market segments. They became important for accommodating low-income households and exerted dampening effects on housing costs and socio-spatial divisions. The right column sketches, how under conditions of Post-Fordism these structures are dismantled. As part of a retreat of state welfare provision, strategies for the de-commodification of services have been scaled back, among them policies for the de-commodification of housing. This has led to a restructuring of urban housing markets and a reduction in de-commodified market segments. I assume that this reduces the dampening effects of the urban housing supply on housing problems of the poor and

INTRODUCTION 30

makes these problems become more acute. I examine these relationships for different cases, which developed institutionally different starting points for neo-liberal restructuring in the period of welfare state expansion.

Figure 1: Analytical working scheme

 Source: own illustration.

1.5.2. Case selection

The research initially started out with two cases, New York and Amsterdam. The rationale for selecting these cities was threefold. First, both cities became focal points of de-commodification policies in the post-war period and developed particularly large regulated rental housing

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sectors, compared to other places in their respective countries. They are hence both places, where post-war interventions become particularly visible. Compared to other US cities, New York developed an exceptionally large regulated private rental stock, next to the country’s largest public housing stock, which together comprised about 51% of all units at the beginning of the 1990s. In Amsterdam, similarly, de-commodification policies became more important than in other places in the Netherlands and in the early 1990s, the city had one of the largest social rental stocks of all Dutch localities (van der Veer & Schuiling, 2005).

Second, New York as well as Amsterdam experienced neo-liberal reforms in their housing markets. In New York, the regulatory framework already began to change in the 1970s, under the Reagan administration, when federal funds for affordable housing programs were cut back, next to a gradual de-centralization in housing responsibilities and greater regulatory efforts to promote homeownership. Since the 1990s, re-commodification pressures have accelerated, driven by market-oriented reforms at federal, state and local levels (Angotti, 2008; Schwartz, 1999; Wyly et al. 2010). In Amsterdam, policies for regulated rental housing have endured longer than in other contexts, following from the longer adherence to post-war policy pathways in the Dutch welfare state, which affected not only housing, but also social security and the Dutch pension system. Since the 1990s, however, there has been a pronounced turn away from state service provision, also in housing, as part of a restructuring of the post-war welfare state. Social rental housing programs have been scaled back and greater reliance is on homeownership and market based housing provision (Dieleman, 1996; van Kempen & Priemus, 2002).

But while New York and Amsterdam show similarities in terms of comparably strong signs of de-commodification and experiences of re-commodification, they crucially differ in another respect, i.e. the broader housing regulation context in which they are embedded. The US has been identified as a typical example of a liberal welfare state, also as regards housing (Barlow & Duncan, 1994). The market has never been challenged as the “natural” provider of housing, direct housing provision

INTRODUCTION 32

by the state has remained limited and consequently, social rental housing5 has also remained small and reserved for those in greatest need. This contrasts to the Netherlands. Comparative welfare research, including Esping-Andersen (1990), has classified the country as a hybrid case, showing elements of social-democratic and corporatist welfare regimes.6 With respect to housing in the early 1990s, however, various researchers have taken the Netherlands as an example of a social-democratic type: First, the state has generally had a strong influence on housing provision and exerted strong control over land use. Second, the stock of social housing is fairly large with universal access (Hoekstra, 2003).

The regulatory differences between the US and the Netherlands are also reflected in the structure of the urban housing markets of New York and Amsterdam in the early 1990s. In New York, social rental housing, with direct provision by the state, accounts only for a marginal share of all units. Even though by US standards the city has developed the country’s largest stock, it still only accounts for 6 percent of all units. Most de-commodified units in New York belong to the regulated private rental market, where policies, in line with liberal principles, have sought to mitigate affordability pressures without, however, substantially curtailing the influence of private market housing provision. In Amsterdam, by contrast, state and non-profit associations have in large parts replaced the market as a provider of housing. The comprehensive commitment to housing de-commodification and non-market provision is reflected in the dominance of the social rental housing stock, comprising almost 60 percent of the stock in the early 1990s. New York and Amsterdam, hence, allow for an analysis of neo-liberal restructuring of urban housing markets in a liberal and a social-democratic housing regulation context.

5 In the US context usually referred to as “public housing“. 6 In the post-war period, the Netherlands developed high degrees of de-commodification, in line with a social-democratic welfare regime type, as defined by Esping-Andersen (1990). However, Esping-Andersen sees the social-democratic regime also as the result of a dominant political position of the labor movement. The Dutch post-war political system, however, was characterized by coalitions and consensus-making, with the labor movement never gaining a solely dominant position, making the country for some an example of a hybrid case.

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In the course of the project, the case selection has been widened and Vienna was included as a third case. Like New York and Amsterdam, Vienna developed a particularly large de-commodified housing stock, compared to the rest of Austria over the course of the 20th century. The origins of affordable housing policies in Vienna go back to the experiments with municipal socialism – today better known as ‘Red Vienna’ – in the 1920s, when the city implemented strict regulations and luxury taxes to drive private landlords out of the market and constructed large swaths of municipal council housing to provide accommodation for the working class. Interventions were expanded from the 1950s onwards, when housing became a pillar in the Austrian post-war welfare state. Contrary to the US liberal context, and the Dutch social-democratic context, Austria has followed the principles of a corporatist welfare state as regards housing (Matznetter, 2002). Vienna, then, allows for an analysis of neo-liberal restructuring of an urban housing market located in a corporatist housing regulation context.

1.5.3. Methods and data sources

A detailed description of the methods and data sources on which the research is based can be found in the separate chapters. Here, nonetheless, I briefly discuss the overall methodological approach. Following from the posed research questions, in each city, the analysis follows essentially three steps: first, the analysis of market-promoting policy changes, second, the analysis of changes to the structure of the housing market and third, the analysis of changes in housing conditions.

The analysis of policy changes is based on a literature and document analysis. Secondary literature and key policy documents are analyzed to identify relevant regulatory changes at different governmental scales. The second and third analytical steps are based on quantitative survey research. First, changes in the structure of the housing market in terms of tenure status and housing cost levels are identified. Second, under considerations of income developments on the demand side, changes to the housing conditions of low-income households are analyzed. The applied concepts are clarified in the separate chapters.

INTRODUCTION 34

The quantitative analysis draws on different sources for the three cities. In New York, the Housing and Vacancy Survey (HVS) is used. It is a survey that is conducted triennially. The primary purpose is to count the number of occupied and vacant units in the city, but there are also several housing and tenant-related variables included.7 The survey provides micro-data on the individual household level. The sample of about 18.000 households is representative for the city and weights in the dataset make it possible to draw conclusions about city-wide developments. The data used covers the period from 1993 to 2008. For the case of Amsterdam, the analysis is based on the Wonen in Amsterdam Survey (WiA). The WiA is a biennial survey in Amsterdam that is conducted since 1995. It provides micro-level data on the household level of approximately 18.000 households. The selection of households is representative of the city-wide population, similar to Vienna. Weights in the dataset allow to draw city-wide conclusions. The datasets used cover the period from 1995 to 2009. For the case of Vienna, I draw on several data sources, including national census data and EU-SILC data.

1.5.4. Measuring housing conditions

For the measurement of housing conditions, the study will draw on the concept of housing affordability, as one standard measure for housing outcomes. Housing affordability is a function of housing costs and household income. Depending on the development of the two factors, housing affordability can remain stable, improve or deteriorate (see also Figure 2). On the micro level of the individual household, affordability refers to the relation between housing costs and household income. On the macro level of the city it indicates the relationship between housing supply and demand (Doling 1997).

7 The survey originated from attempts to monitor the state of New York’s housing market for the New York State rent regulation system. Rent regulation was introduced in the 1950s as an emergency measure to counter the city’s severe housing problems. The real estate lobby agreed to the introduction only under the premise that once the city’s housing emergency is over, the regulation will be automatically abolished. The state of emergency was defined as a vacancy rate below 5 % of all units. Since the 1950s, New York’s housing market has been in a permanent state of emergency, vacancy has never exceeded 5 % and rent regulation has ever since remained in place.

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Different concepts have been developed to measure affordability (see Stone, 2006 for an overview). Most commonly used is the cost-income-ratio approach, which we will also apply. It calculates the share of household income (usually monthly) that is devoted to housing costs. High cost-income ratios indicate low affordability, low cost-income ratios high affordability.8

Figure 2: Logical possibilities of changes in housing affordability

               

        Household  income  

 

 

Source: Own illustration.

8 One critique of the ratio approach is related to the so-called “threshold” problem. Usually, a normative threshold is used as a tipping point up to / above which housing is considered affordable / not affordable. This raises the problem of how to define the threshold, and whether the same threshold can be used in different contexts, and for different groups. We are aware of this problem, but in this study our interest is in trends and how affordability changed over time, whether it became better or worse. Hence we are not confronted with the threshold definition problem.

 

Affordability  

stable  

 

Affordability  

improving  

 

Affordability  

improving  

 

Affordability  

deteriorating  

 

Affordability  

stable  

 

Affordability  

improving  

 

Affordability  

deteriorating  

 

Affordability  

deteriorating  

 

Affordability  

stable  

Decrease

Increase

Increase Decrease

Hou

sing

cos

ts

INTRODUCTION 36

One central problem with housing affordability as a measure for housing outcomes is that it does not capture the dimension of housing access. It may indeed be the case that housing is highly affordable in a city as soon as a household has gotten access to a certain market segment. There may, however, be financial access barriers, for instance through down-payments that a household has to pay. Similarly, the number of available affordable dwellings may be small, due to low mobility within the inexpensive sector and / or the lack of new construction of such units. To account for this shortcoming of an affordability measure, from Chapter 3 on the analysis is extended to also include the issue of accessibility. Accessibility refers to the ability of households to enter the housing market, respectively certain market segments.

1.5.5. Outline of the book

The book consists of four studies, all of which were prepared as individual journal articles. In that, they represent separate studies. Nonetheless, they build on each other in their analysis. In so doing, the order of the chapters also reflects the intellectual journey that I underwent during the research process.

The following, second Chapter is concerned with the neo-liberal restructuring in New York since 1990. Focusing on the city’s rental market, it starts out by giving an overview of housing reforms at federal, state and local scale that have promoted greater market influence over the last two decades. Based on it, the paper analyzes reform effects on the structure of the rental market in terms of tenure segments and rent levels, and identifies the impact on housing affordability. It finds that, already prior to the reforms, affordable housing for poor New Yorkers was short in supply. However, the reforms have triggered a further loss of inexpensive units. As income developments for low-income households in the city have only been moderate, affordability problems have become more severe. Housing has become less affordable not only for poor but also for middle-income New Yorkers, with the former, however, particularly hard hit.

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Based on these findings Chapter 3 turns to Amsterdam and neo-liberal restructuring in a social-democratic housing system context. It identifies key market-based reforms at national, local and EU level from 1990 onwards. This is followed by a more focused empirical analysis of reform effects on the city’s tenure structure and rent levels, and how they affected housing affordability and accessibility of different income groups. The paper finds that, against expectations, despite rising rents and moderate income developments for the poor, affordability for low-income households has not deteriorated in the city in the course of reforms, mainly thanks to the remaining social rental housing stock and the extensive housing allowance scheme. Nonetheless, the analysis identifies that accessibility has emerged as a key problem for poor Amsterdammers, and, following from neo-liberal restructuring, getting access to the housing system and finding an affordable accommodation for newcomers in the city has become increasingly difficult.

Chapter 4 builds on the findings of the first two chapters. It compares neo-liberal restructuring in New York and Amsterdam as examples of cities in liberal and social-democratic welfare and housing systems. The paper also adds Tokyo as a third case, as an example of a city in a developmentalist welfare regime. The paper finds that in all three cities, housing reforms have forged changes to the market structure, leading to greater problems for the poor to find affordable accommodation in the city. However, the paper also highlights the differences in the pathway of restructuring and shows, specifically, how key policy shifts and market transformations are highly differentiated in the three cases, following their embeddedness in distinct combinations of urban, welfare and housing systems.

Chapter 5, finally, takes on the case of Vienna, as an example of a city in a corporatist housing context. The paper starts out from the observation that in fact a great deal of de-commodification policies have remained in place, which is also well documented in the literature about Vienna. However, the analysis identifies two key policy shifts in which de-commodification has been weakened, through reforms in the social rental and the private rental stock. The paper finds that, as a consequence, both segments have become increasingly more expensive to enter. This has

INTRODUCTION 38

forged a division between low-income insiders and outsiders, with the former still fairly well served, but the latter having increasing difficulties to find affordable housing in the city. As a result, the time of market entrance has become critical as regards available housing conditions and rights for low-income households.

Chapter 6 is the concluding chapter. It does two things. First, it provides a summary of the findings by reflecting on the two main research questions and drawing together the results from the different chapters. Second, it discusses potentially salient avenues for further research.

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INTRODUCTION 40

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INTRODUCTION 42

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Chapter 2: New York  

   

NEW YORK 44

Abstract

While public programs, rent controls and subsidy schemes have not been able to resolve New York’s historic and long standing housing crisis, they have played important parts in dampening housing problems of low-income New Yorkers. Along with an encroaching neo-liberal hegemony, however, since the 1990s redistributive policies have come under growing pressure. This paper focuses specifically on the neo-liberal restructuring of the city’s rental market and the effects on housing affordability. First, we present an overview of the reforms and policy changes, at various scales, that have impacted the rental market in recent decades. Second, we demonstrate, using survey data, how reforms have affected the rental market structure before going on to assess how supply changes have affected affordability. We find that policy reforms have led to a reduction in inexpensive rental units in the city, reshaping patterns of affordability among different income groups, with particularly negative outcomes for low-income households.

Keywords:  housing policy, housing reform, neo-liberalism, New York, rental market  

 

 

 

 

 

 

 

 

 

 

 

This paper has been submitted for review. The second author is Richard Ronald.

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2. Undermining Housing Affordability for New York’s Low Income Households: The Role of Policy Reform and Rental Sector Restructuring

2.1. Introduction

Although housing markets in most US cities have been dominated by private actors, New York has historically implemented numerous policies to supplement market based housing provision. Reflecting this, the city developed a large rental housing stock featuring a substantial and relatively well-maintained public housing sector, a comprehensive system of rent regulation and other subsidy programs to decouple housing access, to a certain extent, from market dynamics. At the same time, the real-estate sector has been particular volatile as result of intense exposure to fluctuations in global capital in context of high local housing demand and a severe scarcity of space. Redistributive housing programs have thus played important parts in supporting low-income households in finding affordable accommodation in the city and in mitigating their housing problems (Schill, 1999).

Since the 1990s, however, regulatory strategies to intervene in New York’s market have changed considerably. Along with an encroaching neo-liberal economic hegemony, housing policies have undermined redistributive programs to create more room for the operation of free market forces. While neo-liberalization has not been a coherent strategy, and relevant measures have in parts overlapped with new redistributive programs, overall, policies have reflected greater market orientation (Angotti, 2008; Schwartz, 1999; Wyly et al., 2010).

The neo-liberal restructuring of New York’s housing market has attracted considerable attention and scholars have explored the restructuring of different sub-segments of the market. Bach and Waters (2007; 2008), Schwartz and Vidal (1999), and DeFilippis and Wyly (2008), among

NEW YORK 46

others, have documented changes in federal housing laws and their impact on subsidized housing in the city. Hackworth (2003; 2007) and Thompson (1999), meanwhile, have focused in particular on changes in public housing regulations, and Keating (1998) and McKee (2008) have examined the restructuring of rent regulation laws in New York State and their effects on the city’s housing stock.

Gentrification researchers have also focused on processes of housing neo-liberalization (Hackworth, 2007; van Gent, 2013; Hedin et al. 2012). Wyly et al. (2010), for instance, point at how reform-induced changes in New York’s housing supply have accelerated displacement pressure. In particular, they argue that the restructuring of the private rental market heightens problems for poor households to stay put. While Wyly et al. (ibid.) are specifically concerned with gentrifying neighbourhoods, their findings hint at a broader question: Given the important function that regulated housing sectors have attained for housing low-income households in New York, how has the gradual retreat from redistributive programs and the concomitant restructuring of the housing supply since the 1990s affected housing conditions of these households?

The contribution of this paper is to empirically explore this question, through an analysis of reform effects on housing affordability. Moving from policy changes to housing supply changes and housing outcomes, we specifically contribute to understanding in three ways. First, we bring together existing accounts of market-based reforms in different sub-segments of New York’s rental housing market to argue that the restructuring has been driven by policy changes at different scales. Second, we present empirical evidence based on long-term survey data that demonstrates how reforms have affected the structure of the rental market between 1990 and 2008. Third, similarly based on new survey data analysis, we show how the supply changes have affected housing affordability over the same period.

The paper has four parts. We start out by briefly setting housing neo-liberalization in a broader theoretical context and discuss the main driving forces behind the process. After specifying our methodology, the second part focuses on the case of New York, demonstrating how

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housing policies changed over the last two decades, how it affected the rental market structure and impacted patterns of affordability. The final section discusses the results and raises points for further research. The paper draws on several data sources comprising secondary literature and policy documents as well as survey data from the New York City Housing and Vacancy Survey.9

2.2. Housing Markets and Neoliberalization

2.2.1. Housing Markets and the State

Government intervention in housing has varied greatly over time and space, reflecting cultural, social and political context as well as ideological standpoints regarding the market–government relations (Barlow and Duncan, 1994). Despite variation, historically, three periods have been broadly distinguished in developed societies (see Harloe, 1995). In the first period, from the late-19th century until World-War-Two, governments introduced various measures to supplement the market. The main objective was to absorb the most detrimental market outcomes and guarantee affordable and decent housing for those inadequately served by private provision. The second period, from 1945 until the 1970s, featured governments replacing the market in the provision of housing reflecting wide-spread scepticism concerning the capacity of market actors among policy makers (Boelhouwer and Priemus, 1990). Redistributive housing programs were thus implemented to directly ensure the availability of decent, affordable housing. The third period, since the 1970s, is characterized by diminishing faith in public provision. With the economic crises of the 1970s, the undermining of Fordist regimes and the subsequent growth of public deficits, a socio-ideological climate emerged in which free markets came to be considered a superior means to expand the common good (Saegert et al, 2009). In the field of housing, the primary political objective became the expansion

9 The New York City Housing and Vacancy Survey (NYCHVS) is a triennial housing survey conducted by the US Bureau of Census.

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and intensification of market principles in formerly de-commodified segments, in order to give market forces more room for manoeuvre (Brenner & Theodore, 2002). The latter transformation marks the rise of the neoliberal period.

There have been marked differences, nonetheless, between countries in the progression of state interventions. The US government significantly expanded spending on, and its presence in, the housing market as part of the ‘New Deal’ during the 1930s depression10 (Grigsby, 1990). West European countries, however, began to elaborate social housing policies in the late-1940s and 1950s along with the rolling out of post-war welfare states. Moreover, European interventions emphasized directly subsidized rental provision leading to governments in Britain and the Netherlands, for example, becoming major landlords11. In post-war USA alternatively, the failure of market sectors in meeting housing needs was largely dealt with through subsidies for private developers – to build rental housing for low-income families – or direct user subsidies such as housing vouchers that enhance the capacity of low-income renters in the market (Bratt and Keating, 1993; Varady and Walker, 2003).

Variation in housing policies does not only apply at the cross-country level, however, but also emerged within countries. This particularly holds true for the US, where cities had more leeway over housing market interventions. New York historically took a more pro-active stance compared to most other cities and as early as 1867 enacted the nation’s first tenement housing law (Pluntz, 1990). Meanwhile the first low-income housing project was built in 1937. Cities like Philadelphia or Chicago, by way of contrast, gave market forces more room and refrained from intervening as comprehensively. The tenure structure of urban housing markets in the US has come to strongly reflect these differences in public interventions. In the mid-1990s, more than 70 % of all housing units in New York were rented housing, roughly two-thirds of which

10 Innovations included the Federal Home Loan Banking System, The Federal Housing Administration, The Federal National Mortgage Association (Fannie Mae), the Federal Savings and Loans Insurance Corp and the Reconstruction Finance Corp. 11 Public rental sectors in the UK and the Netherlands at the end of the 1970s constituted more than 31 and 40 percent of housing, respectively.

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were in protected rental segments. In Chicago, by comparison, rented housing only amounted to 59 % and in Philadelphia 38 % (Schill, 1999).

2.2.2. The Policies of Housing Neo-liberalization

The expansion of market principles in housing has become a relatively familiar topic (see Forrest and Murie, 1988; Forrest, 2008; Ginsburg, 1989; Hays 1994; Harloe, 1995; Hodkinson, 2013; Lundqvist, 1992; Ronald, 2008, Van Vliet, 1990). Relevant policy changes have arguably been multi-faceted, but limiting ourselves to the U.S. context three general traits can be distinguished.

First, housing responsibilities were transferred from national to lower levels (Hays, 1985; Basolo, 1999). Firstly, this came out of political pressures derived from growing deficit burdens on national budgets. Direct housing subsidy, which has proved a particularly expensive undertaking, was one of the first to be cut back. Secondly, the emerging political ideology largely considered regulation less efficient in centralized forms compared to decentralized ones. Centralized regulation was considered too distant from the final housing consumer and resulted in unnecessary bureaucracy and costs. Thus, next to cut-backs in federal housing dollars12, responsibilities were also ‘downloaded’ to localities (Davis, 2006).

Secondly, supply-side subsidies for rental housing were gradually phased out. Redistributive programs like US post-war public housing had set aside a nominal amount of the housing supply outside the market. This situation was increasingly considered inappropriate as the market could also provide low-cost units and more efficiently. By doing so, house prices could rise to market levels and would not be kept “artificially” low.13 Only those incapable of bearing the full costs of market housing

12 The federal expenditures for subsidized housing declined drastically from $31.5 billion in 1978, to $13.3 billion in 1982, $9.5 billion in 1987, and $6 billion in 1989 (Fox-Gotham, 2000:245). 13 The shift from supply to demand-side subsidies was partially justified on the basis of discourses focused on negative effects of concentrated poverty associated with public housing neighborhoods (Wilson 1987).

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would receive subsidies, while the activation of market forces in housing provision would make it more effective (Ditch, Lewis and Wilcox, 2001).

Thirdly, governments shifted funds from inexpensive rental housing towards promoting owner-occupation (Shlay, 2006). From the very beginning, homeownership had supported liberal ideologies surrounding private property rights and responsibilities (Ronald, 2008), and promulgation of this tenure was considered an essential tool in advancing the performance of housing markets. Consequently, from the mid-1970s onwards support for rental housing programs gradually declined to be replaced with programs focused on increasing the number of homeowners.

Neo-liberalization strategies were not only implemented at the federal level, but also at lower levels of governance. Confronted with growing financial pressure and inter-urban competition, many local and regional governments reduced redistributive interventions and, embedded in a broader entrepreneurial turn in urban governance (Harvey, 1989), increasingly utilized the housing market as leverage to boost economic growth (Hackworth & Smith, 2001). In this context, attracting middle-class households to urban neighbourhoods through the transformation of housing markets and environments became a central strategy to increase local tax revenues (Hackworth, 2007; Varady & Raffel, 1995). In New York, like many US metropolises, intensive housing market activity in various pockets of the city was increasingly recognised as a means to re-galvanise urban investment. This stimulated city led strategies to encourage speculative investment in housing, regardless of the impact on housing affordability for indigenous urban populations.

2.2.3. The Effects of Neo-liberalization on Low-Income Households

in Cities

Recently, gentrification researchers have shown growing interest in processes of housing neo-liberalization. They have identified the reform-induced changes in the urban housing supply as a key factor for growing displacement pressure on low-income households. Relevant studies are

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available for a number of European cities. In the highly-regulated Swedish housing context, for instance, the sale of public housing has set in motion powerful gentrification forces in the inner cities of Stockholm, Malmoe and Gothenburg (Hedin et al. 2012). Similar processes have been found for Dutch (van Gent, 2013) and German cities (Holm, 2006), but also for U.S. cities, including New York (Wyly et al. 2010). Neo-liberal housing reforms have contributed to growing difficulties for low-income households to stay put in upgrading neighbourhoods.

While gentrification studies are concerned, not surprisingly, with the fate of low-income households in gentrifying neighbourhoods, their findings point to a broader question: Given the important role of regulated housing sectors for housing low-income households in the past, how has neo-liberalization and the concomitant restructuring of the urban housing supply affected these households in their housing conditions? As Atkinson (2008: 2672) argues, neo-liberal reforms have contributed to a “system-wide scarcity” of affordable housing in many cities. The retreat from redistributive policy interventions has triggered a pronounced reduction in inexpensive units. These supply-side changes have interacted with demand-side developments, most importantly as regards income developments. Flexible labour markets, the rise in precarious working conditions and low-paid jobs have contributed to growing inequality, particularly undermining the purchasing power of poor households. Consequently, many of these households are confronted with affordability problems, where the available housing supply does not match their ability to pay.

Against this background, the remainder of the paper empirically focuses on the ‘actually existing neo-liberalism’ (Brenner & Theodore, 2002) in New York and the links between neo-liberal housing reforms, rental housing supply and affordability. Specifically, we do three things. First, we ask how governments at different scales have attempted to dismantle redistributive housing programs in New York’s rental market since 1990. Second, we ask how this has affected the rental housing supply in the city. Third, we explore the implications for housing affordability of low-income households.

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2.3. Methodology and Approach

The analysis initially builds from a state of the art examination of the academic literature as that also taps a number of key policy documents. The results of this contextual analysis are presented in two parts: First, we discuss redistributive policy interventions that were implemented in the period between 1950 and 1990. They set the scene for an understanding of the reforms that followed. The second part shows how redistributive programmes have gradually been dismantled since 1990.14 Our analysis ends in 2008 and therefore does not include the period of the recent financial crisis, as an assessment of the complex policy changes that the crisis induced goes beyond the scope of this paper and the outcomes for housing affordability are yet difficult to identify.

In a second step, we analysed public survey data in order to more definitively ascertain the effects of regulatory reforms on the structure of the city’s rental market. We specifically focused on tenure structures, market segments and rent levels. The analysis covers the period between 1993 and 2008, the period for which comparable numbers are available.15 The data stem from the triennial Housing and Vacancy Survey.

Based on the same dataset, in a third step we analyzed the affordability implications of rental housing supply changes. Affordability refers to the relation between housing costs and household income. Various measures of housing affordability have been developed (see Stone, 2006 for an overview). Despite some conceptual contention, the most often used measure is the rent-income ratio, which we also apply. In this analysis we first estimated the development of the supply / demand balance in the rental market, based on the commonly-used affordability ratio of 25 %.

14 Arguably, market-based reform endeavors in the U.S. date back already to the 1970s and 80s. Therefore the choice of the two periods may be questioned. However, despite these early reforms, as we show below, in the 1980s, at the local level in New York relevant redistributive programs were still implemented. Since 1990, however, reform endeavours at different scales have intensified. 15 Since the microdata in the 1990s and 2000s were weighted differently, absolute numbers are not strictly comparable and serve as a rough indicator of changes. To allow for exact comparison shares and ratios are used whenever possible.

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Second, we looked at actual affordability burdens for households in different income quintiles.

2.4. Housing Reforms and Housing Affordability for the Poor

2.4.1. Setting the scene: Redistributive rental housing policies

in New York between 1950 and 1990

The exceptional status of New York in the U.S. concerning housing interventions is well documented (Schill, 1999; Furman Center, 2001; Wyly & DeFillipis, 2008). Over the course of the 20th century, amidst a highly competitive market the city developed a number of redistributive housing segments to protect low-income households. This resulted not only from successful lobbying at federal and state levels, but also from a more pro-active stance regarding housing policies at the local level as part of the city’s vital municipal welfare state (Gifford, 1978).

Despite the more far-reaching intervention compared to other U.S. cities, New York policy makers, in line with liberal housing regulation principles, never explicitly targeted comprehensive de-commodification of housing in the city. On the contrary, the real estate lobby has always played a powerful role in the local growth coalition and the city has always attempted to avoid too much interference. However, persistently severe housing problems, on the one hand, and a historically well-organized tenant and community organizations, on the other, prompted the city to implement – or lobby for – several ad-hoc interventions. In order not to interfere too much with the private market, redistributive programs often involved private developers, who were given subsidies, loans or tax exemptions in exchange for providing low-income housing (Harloe et al., 1992).

With this regulatory strategy, New York was never able to adequately resolve its housing crisis and housing has consistently remained short in supply, particularly in boom periods when the real estate market has

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heated up. Nonetheless, redistributive programs did a great deal to mitigate housing shortages for the poor. The most relevant programs that were implemented between 1950 and 1990 can be summarized (see also Table 1 below).

Firstly, public housing became one of the most important redistributive housing programs in the Post-War period. Originally implemented as part of the New Deal in the 1930s, the program gained pace in the 1950s (Schwartz, 2010). It provided fully-funded, government-owned housing, allocated on the basis of need. Rents were set so as not to exceed 25% of tenant income. New York always was at the forefront among US cities in developing federal assisted public housing. In the post-war era it became the city with the largest public housing stock. Moreover, New York public housing maintained a better reputation than in other US cities and did not bear the stigma of being the last resort in the housing market where crime and poverty are concentrated. By 1993, the public housing program had produced almost 173,000 units in New York. This equalled 6.2% of all occupied units (See Table 2 below).

Secondly, project-based Section-8 became relevant for New York. The program replaced public housing, in which construction was terminated in 1974. This supply-side program granted subsidies to private landlords so that they keep rents below a certain level for a period of 20 years. The subsidy was a combination of rent subsidy attached to the unit and tax advantages for the developer. The crucial difference with public housing was that housing was privately owned and thus private actors were involved in the provision process. Despite the fact that it was terminated in 1983, project-based Section 8 had already become an important program and funded more than 850,000 units nationwide of which more than 33,000 were located in New York (National Housing Trust, 2005).

At the State level, the Mitchell-Lama program also affected New York’s rental market. The program, launched in 1955 is comparable to project-based Section 8. In exchange for low-interest loans developers agree to keep rents below a certain limit for a period of 25 to 30 years. Despite being a state-funded program, more than 40% of Mitchell-Lama developments in New York City received additional funding from federal

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programs (DeFilippis and Wyly, 2008). In 1993, more than 120,000 units or 4.3% of all occupied units fell under the Mitchell-Lama program (US Bureau of the Census, 1993).16

Rent regulation, introduced in 1943, marked a further cornerstone of redistributive regulations in the post-war era. It is a New York State law and was in its original form called rent control. In 1974, rent control was replaced with rent stabilization that gave more power to landlords. Despite this, rent regulation remained a fairly important tool in New York in keeping rents low. In 1993, 1.07 million units were rent regulated in New York City. This equalled a share of 38.8% of all occupied units (US Bureau of the Census, 1993).

While HUD and, in part, New York State, began to reduce redistributive intervention in New York’s housing market in the 1970s, the city still launched a number of supply-side programs in the 1980s. These ostensibly aimed to counter potentially negative effects of cutbacks in federal programs. Noteworthy in this respect are two interventions: the ‘in-rem’ housing program, and the Ten-Year Housing Plan by Mayor Koch. In-rem housing was a stock of tax-foreclosed units that the city took into ownership, rehabilitated and rented out at below-market rates (see Braconi, 1999). In the 1980s, it became the segment for those on the lowest incomes since it offered comparably decent housing for fairly low rents. In 1993, the in-rem segment included some 34,000 units, which amounted to 1.2% of the occupied stock (US Bureau of the Census, 1993; See Table 2). Mayor Koch’s Ten Year Housing Plan launched in 1986, on the other hand, marked a spending-intensive supply-side initiative. It included the construction, renovation and preservation of more than 250.000 units. Low-income households and formerly homeless people were the main target groups of this plan (Schwartz, 1999).

Together, these interventions at federal, state and local level clearly shaped New York’s rental market between 1950 and 1990. In 1993, the structure of the market reflected the influence of the described programs

16 The Mitchell-Lama program is divided into a rental and a cooperative part. Of the roughly 120,000 units in 1993, 79,000 were rentals and 41,000 cooperatives. Here we focus on the rental part of the segment.

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(See Table 2). Income levels in the different market segments furthermore reveal the redistributive role that these programmes, and the rental sector more generally, fulfilled in 1993. First, tenant incomes were much lower in the rental sector than in the owner-occupied stock, while in the protected rental stock (Public housing, rent-regulated, project-based Section 8, Mitchell-Lama rental and in rem) incomes were, in turn, much lower than in the unprotected, private rental stock. This follows from the generally lower rents in the protected stock. Second, those with lowest incomes were to be found in in-rem housing. Median tenant income in this segment was less than one third of the income in the private rental segment, reflecting lower rents compared to other segments. Clearly, the low rents that protected segments offered made them particularly important for those with least financial means (See Table 2 below).

2.4.2. The neo-liberalization of housing in New York

Since the 1990s, market-based housing reforms at different scales have intensified and changed the regulatory framework for New York’s housing market. The federal government further retreated from supply-side interventions in rental housing and increasingly promoted homeownership. The annual federal budget for rental housing declined between 1976 and 2004 from $56.4 billion to $29.25 billion (corrected for inflation; in 2004$). This stands against indirect subsidies for homeowners of $84 billion in 2004 (Dolbeare, Saraf and Crowley, 2004). At the state level, supply-side subsidies were equally reduced, together with a weakening of protective rent regulation laws. Policy changes at the local level were more complex. After interventions declined in the 1990s, since the early 2000s attempts have been made to counter the loss in regulated rental units. Nonetheless, overall, there has been a gradual retreat from redistributive measures and a greater reliance on private market provision.

These general shifts involved concrete policy changes in the regulation of New York’s rental market. The most important ones can be summarized (See also Table 1).

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First, federal funding for supply-side programs like project-based Section-8 was discontinued. For a large number of units the contract period of 20 years expired, which enabled landlords to prepay outstanding loans, to take the unit out of the program and rent it out at market rates. While HUD attempted to secure some of the units by expanding subsidies for renewed contracts, funds were insufficient to make it attractive for many landlords to extend the rent restrictions (Bach and Waters, 2007) meaning that they “opted out” and took the unit to the free market. Mitchell-Lama units were similarly affected by a federal and state government reluctance to continue funding the program.

Second, New York state rent regulation was significantly undermined in 1993, and again in 1997. Under pressure from the real-estate industry, so-called “luxury decontrol” was introduced in 1993. Apartments with a monthly rent of $2000 or more were automatically rent-decontrolled upon vacancy (Keating, 1998). In 1997, this rule was extended to also include occupied units. Now, even without vacancy a unit could be deregulated if the regular monthly rent exceeded $2000 and tenant income $175,000 a year for two consecutive years (McKee, 2008). Additional legislation made it possible for developers to make agreements with the city, exempting new construction from rent regulation for a period of fifty years (Collins, 2006).

Third, at the local level, supply-side subsidies were scaled back in the 1990s (see Schill et al. 2002). Although the Koch’s housing plan was still de jure, the city’s housing spending dropped significantly, from $850 million annually in the late 1980s to $200 million by the mid-1990s (Schwartz, 1999). Additionally, the city placed a moratorium on in-rem housing and in 1997 it was decided to pursue the disposal of the stock by 2007 (Braconi, 1999). In the early 2000s, a new housing plan was launched. The New Housing Marketplace plan provided new funding for affordable housing construction and preservation. Housing advocates initially criticized it for the generous support for middle-income rather than low-income units (Bach and Waters, 2007) and recently, a revision of the strategy also shifted more resources to preservation of existing units in order to protect poor tenants from rising prices (Independent Budget Office, 2012). Nonetheless, despite a proposed investment of $3

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billion for the creation of 27,000 new affordable apartments and the rehabilitation and preservation of additional 38,000 units, starting in 2004, as shown below, the program was unable to compensate for the losses in inexpensive units.

Table 1: Policy milestones in the regulation and de-regulation of New York’s rental housing market

Source: Own illustration.

2.4.3. The effects of neo-liberalization on the rental market

In the 2000s, New York’s real estate market heated up. International investment soared and prices rocketed. In anticipation of higher returns, many landlords made use of the loopholes opened up by regulatory reforms and took units out of regulation. As a result, the structure of the city’s rental market transformed. Generally speaking, a shift occurred

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from protected to unprotected rental segments. This was driven, in particular, by the reduction in three sub-segments of the market. First, the Section-8 stock shrank. Between 1990 and 2006, it diminished by 11 % or 5,900 units (National Housing Trust, 2005). Second, the number of Mitchell-Lama units decreased by more than 26,000 units over the same period (Bach and Waters, 2007). In relative terms, the segment shrank from 2.8 % of all occupied units in New York in 1993 to 1.9 % in 2008 (US Bureau of the Census, 2008). Many of the units in the two segments, however, did not go straight to the unprotected rental market, but were subsequently covered by rent regulation. The rent-regulated segment, however, was reduced most drastically. Following the weakening of regulation, thousands of units were taken out of the program between 1993 and 2008.17 The threshold of $2000 above which units would automatically be de-regulated was never adapted and when New York’s housing market heated up, thousands of units surpassed the threshold and lost their regulated status. Between 1993 and 2008, the share of rent-regulated units of all occupied units declined from 38.8% to 32.9%. This equals a reduction of around 55,000 units.

Table 2 summarizes the shifts in the city’s rental market between 1993 and 2008. Alongside the shrinkage of protected rental segments, the unprotected rental segment grew substantially: from 19.9% in 1993 to 24.3% in 2008 of all occupied units. Additionally, the homeownership sector grew from 29% in 1993 to 32.9% in 2008. Conversely, the rental sector, in relative terms, shrank.

17 See ANHD (2009) for how the transfer of rent-regulated units to “free” market units was utilized as a lucrative business model for large-scale investors like Deutsche Bank in recent years.

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Table 2: New York’s shifting housing market structure, 1993 - 2008*

*corrected for inflation (2008$); Source: Housing and Vacancy Survey (HVS). Own calculations.

The decline in protected rental housing and the growth in the unprotected segments were accompanied by substantial rent increases. In the period from 1993 to 2008, the median rent increased, corrected for inflation, by 35.7% (US Bureau of the Census, 1993; 2008). This is equivalent to an increase of $250 per household on top of inflation. The median contract

1993 ShareAbsolute

number of unitsMedian Tenant Income in 2008$

Median Contract

Rent in 2008$

Average Contract

Rent in 2008$

Public housing 6.2% 172,970 1,020 280 368Rent-regulated1 38.8% 1,076,680 2,600 706 801Other state and federal rental programs 2 4.8% 133,850 1,750 587 605In Rem 1.2% 34,150 920 347 359Private rental 19.9% 551,200 3,240 901 958Mitchell-Lama coop 1.5% 41,500 3,470 - -Owner-occupied private coop / condo 8.2% 226,330 6,060 - -Owner-occupied conventional 19.4% 537,040 4,850 - -

All rental units 71.0% 1,968,870 - -Total stock 100.0% 2,773,730 3,090 - -

2008 ShareAbsolute

number of unitsMedian Tenant Income in 2008$

Median Contract

Rent in 2008$

Average Contract

Rent in 2008$

Public housing 5.9% 183,810 1,300 387 424Rent-regulated1 32.9% 1,021,140 3,170 911 1,000Other state and federal rental programs 2 3.9% 119,380 1,580 715 701In Rem 0.1% 3,140 1,930 357 432Private rental 24.3% 753,880 4,190 1,200 1,524Mitchell-Lama coop 1.1% 34,700 3,330 - -Owner-occupied private coop / condo 11.6% 359,880 7,250 - -Owner-occupied conventional 20.1% 324,760 5,830 - -

All rental units 67.1% 2,081,350 - -Total stock 100.0% 3,100,690 4,080 - -

Change 1993 - 2008 ShareAbsolute

number of unitsMedian Tenant Income in 2008$

Median Contract

Rent in 2008$

Average Contract

Rent in 2008$

Public housing -0.3% +10,835 +280 +107 +56Rent-regulated1 -5.9% -55,543 +570 +205 +199Other state and federal rental programs 2 +2.6% +85,234 -170 +128 +96In Rem -19.8% -548,063 +1,010 +10 +73Private rental +22.8% +712,381 +950 +299 +566Mitchell-Lama coop -7.0% -148,701 -140 - -Owner-occupied private coop / condo -7.8% -309,709 +1,190 - -Owner-occupied conventional +20.1% +714,382 +980 - -

All rental units -3.9% +112,490 - -Total stock +11.8% +326,960 +990 - -

1  Inc ludes  rent-­‐contro lled,  rent-­‐s tabilized  (pre-­‐47)  and  rent-­‐s tabilized  (po s t-­‐47)  units .2  Inc ludes  pro jec t-­‐bas ed  S ec tion-­‐8,  M itchell-­‐L ama  rental,  o ther  HUD -­‐regulated  units  and  A rtic le  4/5  units .  

Median  income  and  number  o f  units  rounded.  Y early  income  converted  to  monthly  income.  (div ided  by  12)  L o ft-­‐board  regulated  buildings  exc luded.

S ource:  H ous ing  and  Vacancy  S urvey  (HVS ).  Own  calculations .

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rent rose in all rental segments, but most pronounced in the unprotected private rental segment. Here, the median contract rent in 2008 was almost $300 higher than in 1993 (all corrected for inflation; ibid.). Apparently, landlords made increasing use of the possibility to increase rents in this part of the market.

An analysis of units by rent categories reveals a clear upward shift of the rental market over the last fifteen years (See Figure 1). Between 1993 and 2008, the cheapest segment ($1 to $599) lost most units and the most expensive segment ($1400 and above) gained most. The two most inexpensive segments lost the greatest share in the market, whereas the most expensive segments gained significantly. The loss of more than 400,000 of the least expensive apartments stands against the increase of about the same number of units in the most expensive market segments. In absolute numbers, New York’s rental market grew by 112,000 units between 1993 and 2008. The type of housing that is available within the sector, however, changed decisively.

Figure 1: Changes in rental stock by rent level categories, New York, 1993 – 2008*

*corrected for inflation (2008$) Source: US Bureau of the Census 1993; 2008. Own calculation.

-­‐20%  

-­‐15%  

-­‐10%  

-­‐5%  

0%  

5%  

10%  

15%  

20%  

$1  -­‐  $599   $600  -­‐  $799   $800  -­‐  $999   $1000  -­‐  $1199  $1200  -­‐  $1399   $1400  and  above  

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2.4.4. The implications for housing affordability

While on the supply side, rents rose, on the demand side, incomes also increased. Between 1993 and 2008, the median household income in New York grew by 32.3%, just a little out of step with the median rent increase of 35.7% over the same period (US Bureau of the Census, 1993; 2008).18 Income developments differentiated by income groups, however, reveal a very different picture. There is growing income inequality evident between the poor and the rich when income quintiles and deciles are compared, with poor households in New York increasingly falling behind. For the tenth decile, incomes rose by 40% between 1993 and 2008, while for the fifth quintile, they increased by 33.3%. In contrast, households in the first decile earned 22.6% more in 1993 and 2008, while for the first quintile incomes increased only by 18.2%.

Coupled with a shrinking supply of inexpensive units this produced growing difficulties for low-income households to find affordable accommodation, as the data indicate. Figure Two shows an estimate of the shortage of inexpensive units and how it developed between 1993 and 2008. It compares the share of inexpensive units with the share of all households in need of such a unit, based on an affordability threshold of 25 %. As can be seen, in 1993 there were already more households in need of such a unit than actual supply. Since then supply has decreased as inexpensive units have disappeared from the market. Although income has nominally increased, as Figure 2 shows, units have been subtracted from the market faster than incomes have risen, leading to a growing undersupply of inexpensive housing in the city.

This has translated into growing affordability problems. In 2008, 43% of all rental households in the city had an affordability problem (defined as a rent burden of more than 30%). This is an increase of 2% since 1993. Severe affordability problems similarly increased, from 22.5% to 24.1% 18 Figures represent median gross household income of all households in units marked as occupied in the NYCHVS, corrected for inflation. Gross income includes the income of all household members older than fifteen years from welfare transfers, pensions and paid work, as well shelter allowance payments. For the exact definition see http://www.census.gov/hhes/www/housing/nychvs/2008/gloss08.html.

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(defined as a rent burden of more than 50%; see Table 3). The median rent-income ratio also increased, but the numbers fluctuate over the years. An analysis of rent-income ratios by income quintiles reveals a relatively clear trend, however: Low-income households, who already had the greatest affordability problems in the past, were most negatively affected by the developments of the last two decades. For all but the lowest quintile, median rent-income ratios did not increase by more than 1.2 points. However, the median rent-income ratio for the 20% poorest households increased by as much as 3.4 points between 1993 and 2008 (Table 3).

Figure 2: Estimated under-supply of inexpensive rental units1, New York, 1993 - 2008*

1 Defined as units with a monthly rent between $1 and $599. *corrected for inflation (2008$) Source: US Bureau of the Census 1993; 2008. Own calculation.

 

An analysis of affordability problems by rental market segments is further revealing. It shows that the protected market segments are not able to fully offset affordability problems. In fact, 88.3 % of all low-income households (defined as households in the first income quintile) in

-­‐13.0%

 

-­‐17.4%

 

-­‐19.1%

 

-­‐15.6%

 

-­‐20.1%

 

-­‐19.9%

 

10%  

15%  

20%  

25%  

30%  

35%  

40%  

45%  

50%  

55%  

1993   1996   1999   2002   2005   2008  

Households  in  need  of  inexpensive  unit  based  on  25%  rent-­‐income  raAo  in  %  of  all  households    Available  inexpensive  units  in  %  of  the  housing  stock  

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the protected rental market had an affordability problem in 2008. In the rent-regulated sector in particular, many low-income households have to spend more than 30% of their income on rent. Nonetheless, the overall protection from market forces is still much better in the protected segments, as rent data reveals. Rents were clearly highest in the unprotected segment and also increased most between 1993 and 2008 (see Table 2). Nonetheless, with the protected segments shrinking, poor households increasingly have had to rely on this segment, despite rising prices. In 2008, 4.8% more low-income households lived in the unprotected rental segment instead of in protected segments (US Bureau of Census, 1993; 2008). This translates into higher rent burdens. In 2008, the median rent burden in the unprotected rental segment was 67.2 %, while it was 50.8% in the protected rental market segments. Clearly, this suggests that the reforms have exacerbated affordability problems for poor households in the city.

Table 3: Housing affordability in New York, 1993 -2008

1 Includes units in public housing, project-based Section-8 and other HUD regulated programs, Mitchell-Lama rental, Article 4/5, rent-stabilized pre-1947 and post-1947, rent controlled and in rem. Source: US Bureau of the Census 1993; 2008. Own calculation.

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2.5. Discussion and concluding remarks

This paper has set out to analyze the effects of neo-liberal housing reforms on housing affordability of low-income households in New York between 1990 and 2008. Starting point has been the growing interest in neo-liberalization trends in New York's housing market and recent gentrification studies that point to negative effects of neo-liberal market restructuring on the housing conditions of poor households. Through our analysis we have added in three ways to the available literature.

First, we have provided an overview of relevant reforms that impacted New York's rental market to show that the restructuring has been driven by policy changes at different scales. At the federal level, embedded in a broader shift towards homeownership promotion and away from support for rental housing support, various supply-side subsidies have been reduced. For New York, this became relevant above all regarding a number of units in project-based Section-8 and Mitchell-Lama, for which contracts expired in the 1990s. New York state equally retreated from supply-side subsidies, most importantly in the state-funded part of Mitchell-Lama. In addition, state rent regulation was weakened and luxury de-control was introduced. At the local level, the decrease of funding for affordable housing in the 1990s was a central reform element, even though the policy direction was not one-directional and in the 2000s, funding was partly expanded again under the Bloomberg plan. Hence, reforms at federal, state and local level became important in the restructuring of the city's rental market.

Second, we have provided new empirical evidence for how these regulatory changes have affected the rental housing supply, through survey data analysis covering the period between 1993 and 2008. Overall, the rental sector has declined vis-á-vis homeownership. Within rental housing, unprotected market segments have increased while protected segments have become smaller. The analysis suggests that the reforms are crucial to understand this development. Protected segments have become smaller, most importantly, through a loss in project-based Section-8, Mitchell-Lama and rent-regulated units. As we show, with the shift from protected to unprotected rental market segments, the structure

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of the market has also changed with regard to rent levels. The number of inexpensive units has declined sharply, while expensive market segments have increased.

The third part of the paper has presented new survey data analysis on affordability shifts that reflect parallel rental housing supply changes. Our results indicate that the reforms have indeed contributed to a growing affordable housing shortage in the city. While already in the early 1990s, inexpensive housing was short in the city, under-supply has become more pronounced as the supply of low-cost housing has decreased and incomes of poorer households have fallen even further behind. Generally, this has translated into higher rent-income burdens on the household level and affordability has become more problematic, with poor households, however, clearly most negatively affected. The data suggest that a key factor is that with the shrinkage in protected rental segments poor households increasingly have had to rely on the unprotected rental market, where rents are much higher than in the protected segments and, consequently, affordability burdens increase.

What does this analysis tell us more generally about housing neo-liberalization and the housing conditions of low-income New Yorkers? For one, it highlights the crucial role of the reforms as a key driver of housing problems in the city. We have clearly identified parallel market-based reforms, an upgrading of the rental housing supply and growing affordability burdens. With these findings we add additional empirical evidence to recent gentrification studies that have pointed to neo-liberal reforms as a central factor for growing housing problems of low-income households in the city. Meanwhile, our findings also go somewhat beyond these studies, by showing that reforms have affected poor households on a wider scale, beyond gentrifying neighbourhoods. Indeed, as our affordability analysis suggests, there is today on overall lack of affordable accommodation in New York, which has clearly become more severe in the course of market-based reforms since 1990.

Inevitably, an analysis in an article of this length remains limited. One limitation is that our focus on housing affordability has left aside other ways how poor households deal with the growing scarcity of inexpensive

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housing in the city. Some have, for instance, ostensibly opted to leave the city altogether. The Center for Urban Future (2009) reported that in 2006, 23% of among all households that moved away from New York the most often cited reason for leaving was high housing costs. Some individuals, meanwhile, have simply left the formal housing market and become effectively homelessness. Between 2002 and 2008, the number of people who used the shelter at some point in the year went up from 82,802 to 109,314 (Coalition for the Homeless, 2009).

Other groups have escaped the rental housing shortage by entering homeownership, and in particular the segment of low-equity coops, which has lower access barriers than conventional owner-occupation. Many have alternatively relied on the informal rental housing market, which is estimated to include up to 100,000 units (Botein, 2005). Another important group to consider among those affected by declining housing affordability have been those forced to move within the city to escape rising costs in attractive locations. Annually, more than 10,000 households are officially reported to be displaced in New York (U.S. Bureau of the Census, 2008), becoming victims to forms of spatial injustice (cf. Soja, 2013).

While our analysis of market restructuring and affordability in New York housing has been revealing, it tells us relatively little about the universalities of these processes. Indeed, as we stated at the outset, New York is by no means a ‘typical’ North American city, and there has been considerable room dismantling of redistributive programs. Further comparative research, beyond the “actually existing neo-liberalism” (Brenner and Theodore, 2002) of New York, would thus be desirable. In the last few years a number of studies beyond North America have begun to reveal both a common influence of neoliberal reform, but also considerable variety in their manifestation and impact on different types of households housed in different parts of the market (Hedin et al. 2012; Musterd, 2014). Comparisons of policy transformations and the outcomes of increased marketization in other global cities, particularly those of social democratic regimes in Europe for example, would be particularly insightful in terms of illustrating diversity and continuity, as

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well as the particular salience of housing regulation as a medium of neoliberalization and a driver of social inequality.

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Chapter 3: Amsterdam  

 

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Abstract

With a comparably high degree of de-commodification in the urban housing market, Amsterdam has been long considered a prime example of a ‘European city’ and a ‘just city’. This paper looks at how the city’s housing tenure sectors have changed since the 1990s due to neo-liberalization processes and specifies effects for housing conditions of the poor. It highlights how restructuring has been driven by policy changes at different scales, and analyses the effects of reform on issues of accessibility and affordability. We identify a gap between insiders and outsiders, with affordability for the poor inside the system not yet deteriorating, but accessibility for poor outsiders emerging as a key problem. In the conclusion we speculate on future developments of the Amsterdam housing market and relate our findings to debates about the ‘European city’ and the ‘just city’.

Keywords:  urban housing market – affordability – accessibility – neoliberal housing policies - Amsterdam    

 

 

 

 

 

 

 

 

 

 

 

 This is the accepted version of the following article: Kadi, J. & S. Musterd (in press) "Housing for the poor in a neo-liberalizingjust city: Still affordable, but increasingly inaccessible", which is going to be published in final form at http://onlinelibrary.wiley.com/journal/10.1111/%28ISSN%291467-9663

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3. Housing for the poor in a neo-liberalizing just city: Still affordable, but increasingly inaccessible

3.1. Introduction

There is a prevalent notion in comparative urban studies about the alleged ‘otherness’ of the European city (see e.g. Crouch 1999; Kazepov 2005). The ‘European city thesis’ distinguishes market-dominated versions of American urbanism from more coordinated, de-commodified forms of European urban development. An important element in this literature considers the functioning of urban housing markets and how institutional differences in the organization of the urban housing supply have played a key role in mitigating socio-spatial divisions, segregation and exclusion, more generally, and housing problems of the poor in particular (Musterd & Ostendorf, 1998). It devotes attention to the significant state-owned and not-for-profit housing sectors and the distinctive regulatory frameworks for private rental housing. To an important extent these developed in a number of European cities as part of national welfare state arrangements in the post-war period (cf. van Kempen & Murie, 2009).

Amsterdam can be considered the epitome of a European city when it comes to the degree of post-war housing de-commodification. After World War II, housing production became dominated by non-profit housing associations, supported by comprehensive supply-side state subsidies. In the late 1980s, the social housing sector in Amsterdam accounted for 58% of all units, with about 90% of the private rental market tightly regulated, which inhibited the influence of market principles. Unlike public housing in many U.S. cities, housing for the poor in Amsterdam was not residualised. The high degree of de-commodification made housing, even for those on relatively low incomes, comparably affordable and accessible. The city appeared to be a prototype of a just city (Fainstein, 1999; 2010; Gilderbloom et al, 2009).

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We will show in this paper that over the last two decades Amsterdam’s housing market has come under neo-liberal pressure. Firstly, provision of de-commodified housing has lost appeal in the context of a retreating national welfare state (Dieleman, 1996). Secondly, housing re-commodification has become an element in entrepreneurial strategies to boost urban competitiveness (van Gent, 2013). Thirdly, and more recently, the European Union pressured the Dutch government under EU competition directives to give market principles greater purchase (Priemus & Gruis, 2011). In this context, direct subsidies for housing associations have been terminated, programmes to sell social housing were implemented and homeownership promotion strategies have led to a tripling of the sector in the city since 1995. Through a ‘revolution’ in housing regulation (Dieleman, 1996), Amsterdam’s former ‘pseudo market’ (van der Veer & Schuiling, 2005) has increasingly become influenced by market principles.

The paper focuses on the neo-liberal restructuring of Amsterdam’s housing market since the 1990s and the effects on housing conditions of the poor. The restructuring has also been addressed by others. Aalbers (2004) analyzed homeownership promotion policies and the related sale of social housing units. In a later publication Aalbers (2011) interpreted urban renewal policies through the lens of urban revanchism. Van Gent (2013) took a gentrification perspective, specifying the path-dependent nature of third-wave gentrification. Uitermark (2009) provided insight into how urban social movements gradually lost momentum and how this relates to the neo-liberal re-orientation of urban renewal policies.

Our approach is different. Firstly, we specify policy changes at different governmental levels in order to highlight how Amsterdam’s market has come under pressure. Whereas the post-war configuration of European urban housing markets is strongly associated with national welfare states, we aim to show that now national, local and supra-national marketization policies are driving restructuring. Secondly, we take a novel look at reform effects on the poor. Much of the available literature on this issue focuses on the residualization of social housing. We, instead, combine the concepts of affordability and accessibility to measure reform effects. We find that reforms have forged a division between insiders and outsiders on

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the market. To date, affordability for the poor has hardly deteriorated, but accessibility is emerging as a key problem. Poor households inside the system are still protected, but access to this system is getting increasingly difficult. We interpret this as the outcome of a ‘layering’ (cf. Brenner & Theodore, 2002) of neo-liberal structures with former redistributive structures.

We proceed through three research questions:

1) Why has Amsterdam’s housing market come under growing marketization pressure since the early 1990s?

2) How did regulatory changes affect the structure of the housing market in terms of tenure and rent levels?

3) What were the effects on housing conditions for the poor in terms of housing affordability and accessibility?

Our findings contribute to two broader debates. First, we contribute to the debate about the ‘European city’ and neo-liberal urbanism, particularly regarding the neo-liberalization of European urban housing markets (Aalbers, 2011; van Gent, 2013; Hedin et al. 2012; Uitermark, 2009; Uitermark et al., 2007). The second contribution is to the debate about Amsterdam and its status as a just city (Fainstein, 1999; 2010; Uitermark, 2009; 2011; Novy & Mayer, 2009).

The paper has four sections. The following one presents our theoretical framework. The second section specifies the methodological approach and the third the empirical analysis. In the final section we reflect on our findings, speculate on future developments of Amsterdam’s market and discuss the results in relation to the broader debates mentioned.

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3.2. Neoliberalizing urban housing markets in a Western European context

3.2.1. Driving forces at different scales

There is growing recognition as to how the institutional configuration of Western European urban housing markets have been fundamentally changing in the context of a rising neo-liberal policy discourse and practice since the 1980s (see e.g. Aalbers, 2004; Hedin et al. 2012; Musterd, 2014). As governments have sought “to extend market discipline, competition and commodification” (Brenner and Theodore 2002: 3), supply-side interventions that had contributed to a de-commodification of housing stocks in the 1950s and 60s have been reduced or partly abolished. Social housing as a mainstream tenure has been questioned in a number of European countries (Harloe, 1995), giving way to the promotion and growth of homeownership (Ronald, 2008). Direct production subsidies for social rental housing have been reduced, programmes to sell off or demolish parts of the tenure have been implemented, and measures to deregulate rents, also in private rental housing have been adopted (Whitehead & Scanlon, 2007).

This has occurred in the context of a broader restructuring of post-war welfare states, which have been increasingly considered a failure, economically and ideologically. As national governments have sought adaptation, housing, as a particularly spending-intensive field, has become centrally affected (Malpass, 2008). In the UK, Thatcher’s ‘Right-to-Buy’ scheme promoted the large-scale sale of over 2 million council housing units to sitting tenants, eroding not only the affordable housing stock but also the material and symbolic basis of the welfare state (Forrest & Murie, 1988). Germany has taken a different route. Social housing units have also been sold at a large scale, but mainly to institutional investors rather than sitting tenants (Murie et al. 2005). Additionally, each year, about 100,000 units are removed from the social housing stock as temporary rent restrictions expire (Scanlon & Whitehead, 2007). In the Netherlands the political commitment to de-commodified housing endured through the 1980s (Boelhouwer et al.,

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1992). Since 1990, however, measures have been taken to reform the Dutch welfare state accompanied by a preference away from social rental housing. While privatization of social housing was moderate in scale, there has been extensive promotion for owner-occupied housing (Murie et al. 2005; Priemus, 1995).

The reforms of national welfare states have been particularly relevant for urban housing markets because it was in cities that de-commodified housing became concentrated in the post-war period. The restructuring of urban housing markets has, however, not only been driven by national welfare reforms, but also by local strategies. A number of cities considered the reduction of de-commodified housing as a promising strategy to relax local budget shortages and to foster local economic growth through real estate development (Hackworth & Smith, 2001). In London, for example, local councils initiated stock transfers of council housing in order to redevelop land and inner-city property through private development (Watt, 2009). In Berlin, the city promoted both the sale of social housing units to tenants and the sale of entire public housing companies (Aalbers & Holm, 2008). Another related element is that policy makers have seen redeveloped housing markets and ‘liveable’ neighbourhoods as a means to attract affluent urbanites in attempts to deliver the promises of creative city strategies.

In the last years, the structure of European urban housing markets has also come under pressure from the European Union. The EU has no direct competence for housing policy, but has exerted influence through instructing national governments to change policies under EU competition directives. For the EU, financial government support for social housing harms competition. Sweden is one country that has been affected. The Swedish reaction has been to abolish support for non-profit housing companies and to force them to act as for-profit providers. The effect of this decision, from today’s point of view, is far-reaching as it may mean ‘the end of below market rents and with that the end of non-profit housing’ in Sweden (Elsinga & Lind, 2013: 969). The Netherlands is another country that has changed policies towards social housing in reaction to EU legislation, as we discuss below.

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There are, hence, policy pressures at different levels - national, local and supra-national – that interact in the restructuring of European urban housing markets. Importantly, in this process, pre-existing policy programmes and de-commodified market segments have not fully been eradicated. New social housing is still constructed in a number of European countries (Scanlon & Whitehead, 2008), yet there is significant decline and the overall direction is towards a smaller social housing sector (cf. Harloe, 1995). Other examples are demand-side subsidies that have remained in place in a number of cities. Housing markets in most European cities have hence not yet been fully neo-liberalized. Instead, a ‘layering’ of older de-commodified and newer neo-liberal structures occurred (Brenner et al. 2010). Nonetheless, important questions have arisen about how the reforms affected the urban poor and their housing conditions.

3.2.2. Effects on the poor: residualization of social housing,

affordability and accessibility problems

One relevant dimension, which has received much attention in the literature, is related to social housing and how the composition of the sector is changing (see e.g. Forrest & Murie, 1983; Meusen & van Kempen, 1995; Van der Veer & Schuiling, 2005). Concerns have been raised that the sector would turn from a socially-mixed into a residual, socially-segregated domain that caters only to those unable to find private accommodation, especially in countries with a large social housing sector such as the UK and the Netherlands.. The poor would then be relegated to a stigmatized last resort in the market and the remote location of the remaining stock would also spatially isolate them. A clear trend towards residualization has been found for the UK, following the Right-to-Buy scheme and the reduction of the council housing stock (Murie, 1997). Also in the Netherlands, studies have shown that social housing is increasingly dominated by low-income households (Meusen & van Kempen, 1995). Musterd (2014) has also found evidence for this trend, but also argues that the Dutch social rental sector is still comparably mixed in terms of incomes, making residualization much less pronounced

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than in the UK context. This is especially true in Amsterdam, where still many middle-income households reside in social housing.

A second dimension of growing housing problems for the poor, which we will explore in our analysis, is housing affordability. As the inexpensive rental housing stock on which poor households usually rely is being reduced, and as rents are increased, households will have to pay a greater share of income to cover housing costs. Flexible labour markets, the rise in precarious working conditions and low-paid jobs will further exacerbate problems to find affordable accommodation. These neo-liberal reforms may lead to greater affordability problems among the poor.

A third dimension, also included in our analysis, is housing accessibility. Whereas in the past social and non-profit housing facilitated access for the poor based on entry criteria other than the ability to pay, today a growing share of the market access is purely based on financial ability. In de-regulated market segments prices and rents will increase when demand is high. This has been observed for both home ownership and the private rental market and is contrary to observations in regulated market segments. Additionally, in the homeownership sector, high entry costs pose a financial barrier. This can be expected to ‘lock out’ the poor from the market. In Swedish cities, growing accessibility problems emerged from a shrinking de-commodified rental sector and a growing, but overly expensive homeownership sector (Christophers, 2013). In Germany, de-regulated social housing units were upgraded and sold on to investors at high prices. Poor and less advantaged households struggle to get access to a shrinking poor-quality social housing stock (Droste & Knorr-Siedow, 2007). In the remainder of the paper we provide an analysis for the case of Amsterdam.

3.3. Methods, operationalization and data sources

Following our research questions we will proceed in three steps. We begin by tracing national and local market-based housing policy change that impacted Amsterdam’s housing market in the period 1990 to 2009. We limit ourselves to housing policies, leaving out fields that indirectly

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impact the functioning of urban housing markets (e.g. infrastructure policy). The analysis is based on a systematic review of available research and policy documents, complemented by interviews with local housing experts conducted in summer 2010.19 The second part deals with the effects of the policy change on Amsterdam’s housing market structure. We analyse changes based on housing survey data covering the period 1995 to 2009. We focus on two variables, tenure structure and rent levels. Thirdly, we examine effects on housing conditions, based on the concepts of housing affordability and accessibility.

Affordability refers to the relationship between housing costs and household income. Different measures have been developed for it (see Stone, 2006 for an overview). Most commonly used is the ratio measure, which we will also apply. It calculates the share of monthly household income that is spent on housing. High cost-income ratios indicate low affordability, low cost-income ratios high affordability. We analyse cost-income ratios for income quintiles and deciles in Amsterdam over the period 1995 to 2009. For the analysis we focus on the entire rental sector as this was not only by far the city’s largest sector prior to the reforms (88% of all units in 1995), but also the sector where almost all low-income households lived at that time (97.1% of 1st quintile, 97% of 2nd quintile in 1995). For our calculations we adopt a pragmatic definition of “low-income households”, based on available household income. We are aware of the fact that a definition based on income lumps together different groups of households that suffer from poverty, such as working poor, precarious (self-)employees and unemployed households. However, essentially we are interested in the relationship between available income and housing costs, leaving aside other, poverty-related household characteristics. We distinguish between “poor” or “low-income households”, as households in the 1st income quintile, and “very poor households” as households in the 1st income decile. Importantly, as we draw on official statistics our data are likely to exclude a significant part of poor households, who reside in the city, but are unregistered.

19 Interviewees included Manuel Aalbers, Richard Ronald, Dick Schuiling, Jeroen van der Veer and Pieter Terhorst.

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The affordability analysis is complemented by a discussion of housing accessibility. Accessibility refers to the ability of households to enter the housing market. We look at changes in tenure compositions by households of different income groups as well as waiting list times to determine accessibility problems. All our data stem from a biannual housing survey that was kindly provided by O+S Amsterdam.

3.4. The neoliberalization of Amsterdam’s housing market

Neoliberal reforms in Amsterdam’s housing market are tightly interwoven with regulatory intervention in the market prior to the reforms. Starting in the beginning of the 20th century and intensifying in the period after World War II, the Netherlands, like many other Western industrialized countries developed a system of housing de-commodification policies as part of the build-up of the national welfare state. The strongly centralized Dutch system, which put greater constraints on market forces than systems in many other countries rested on three pillars: supply-side subsidies for the construction and operation of social housing; rent regulation based on a housing quality point system applying to both the social and the private rented segment, with annual rent increases set by the parliament; and allocation regulations based on length of time since registration and urgency of housing need applied to social housing units and parts of the private rented stock. These programmes were complemented by a system of non-profit housing associations. The associations agreed to fulfil public tasks, like the provision of decent and affordable housing, in exchange for financial aid from the state. They became a powerful player on the Dutch housing market, and owned 42% of the nationwide housing stock by the mid-1990s (Priemus, 1995).

Redistributive policies were particularly developed in the Dutch big cities, especially in Amsterdam. Between 1945 and 1985, 90% of residential construction in the city took place in the subsidized social rental segment (Fainstein, 2010). The share of social housing in

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Amsterdam at that time was even higher than the – by international standards – already high share in the Netherlands overall. In 1995, 39.2% of all dwellings nationwide belonged to social housing (CBS Statline). In Amsterdam, this was about 58.5%. In addition, 30% of the city’s housing stock was private rental housing, 90% of which also fulfilled a social role, meaning that rents were regulated and every other tenant was allocated a unit by the municipality. The share of dwellings traded on the “free market” in Amsterdam was thus extremely low: a 10% share of the private rental segment and 12% owner-occupied units.

3.4.1. National neoliberal reforms

Given the strongly centralized policy structure that developed in the post-war era, the marketization process in Amsterdam was also highly intertwined with regulatory changes at the national level. A turning point from de-commodification towards market-based policies in the Dutch housing sector was the year 1989, when a new housing memorandum was released by Minister Heerma. Together with another memorandum in 2001, entitled “What people want, where people live”, this document opened the door for stronger market orientation. Government money spent on housing was being reduced. The fact that many households with higher incomes lived in social housing was considered too costly. Under the new premise to reduce the stock, these households were seen as undeservingly benefitting from subsidies (‘scheefwoners’) (Dieleman & van Kempen, 1994). Additionally, a large socially-mixed social housing sector was no longer considered primarily desirable from the perspective of low-income households, but also undesirable from the perspective of higher-income households. They would not be granted enough choice on the market. These problems were considered to be particularly pronounced in the big cities.

The concrete changes to national housing policy that followed from the two documents comprised three major elements. Firstly, subsidies for renters were drastically reduced. Supply-side subsidies for social housing maintenance and construction were virtually terminated as of 1995 (Priemus, 1995). The only remaining rental subsidy was for demand-side

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allowances (Priemus 1998). Secondly, rent regulation was reformed in order to increase rental revenues for housing associations in the absence of supply-side subsidies. The national government set a yearly rent increase above the inflation rate to bring rents closer to market levels, while associations were simultaneously given more freedom in setting rents for individual units. Thirdly, measures were taken to promote homeownership. As Richard Ronald puts it: “There is basically an embracing of the growth of homeownership, with subsidies and policies that support the sector and promote the increase of house prices” (personal interview). This was done through retaining and extending generous subsidies for homeowners (unlimited deductibility of mortgage interest payments, subsidy on imputed rent, no capital gains tax). In 2006, fiscal support for homeowners through mortgage interest payment deduction nationwide totalled some €14 billion. This stands against €3 billion spent on the only remaining subsidy for renters, i.e. housing allowances (Conijn, 2008). Homeownership was also promoted through construction targets set by the government and agreed upon with housing associations. The Promotion of Homeownership Act (BEW) in 2001 proposed to increase the nationwide homeownership rate from 53 to 60% by 2010. In addition, national spatial planning and “restructuring” policies also stimulated increase of the homeownership rate particularly in the big cities through new construction but also tenure conversion and demolition of inexpensive social rental housing (van Kempen and Priemus, 2002).

These reform steps were linked to fundamental changes in the role of housing associations, and in the relationship between government and the associations. With the reforms the financial ties between the two were cut loose. “From that moment on the associations were financially independent, but they also didn’t receive any more subsidies. So it was a major change in our welfare state arrangement. It meant that the associations were completely independent” (Van der Veer, personal interview). This stimulated the associations to become more market-oriented and to engage in profitable activities through the sale of social housing or the provision of homeownership units (see e.g. Salet, 1999 for a useful discussion).

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3.4.2. Local neoliberal reforms

Initially, local policy makers in Amsterdam were rather unwilling to implement the national proposals to restructure the city’s housing market (Aalbers & Holm, 2008). Nonetheless, in 2001 plans were set up between the associations, municipality, district authorities and tenant associations to transfer 28,575 units of social housing, 14% of the city-wide stock, to private landlords. Likewise, in 2001, local officials and housing associations agreed to increase the share of owner-occupied dwellings from 19 to 35% by 2010. Until 2003, concomitant sales, however, were sluggish (Aalbers, 2004).

Since then, however, Amsterdam policy makers have become more active in promoting restructuring. In 2008, a memorandum was released entitled ‘Living in the metropolis’ (Wonen in de metropool) that deemed housing to be too affordable and too dominated by social rental housing. It proposed to reduce the stock of inexpensive units in the city by 51,000 by 2020. It stated that “for a long time housing policy was directed at people with lowest incomes” and continued that there will be now “more attention to middle segments, both in the rental and owner-occupied sectors, for example through sale of social housing” (Gemeente Amsterdam, 2009: 11, authors’ translation). The latest policy, ‘Building the City’ (‘Bouwen aan de Stad II 2010), states that 30,000 social rental units should be sold off by 2027. The municipality seems to consider sale as a direct way to relax its strained budget situation. Associations are obliged to pay €8,500 to the city for every sold unit.

3.4.3. Reform pressure from the European Union

Lately, the EU has emerged as a new player in the marketization of Amsterdam’s housing sector. Following a complaint from the Dutch Association of Institutional Investors, the European Commission prompted concerns about the level playing field of competition between social and commercial providers in the Dutch housing sector. The main concern was that housing associations are still supported in their social housing activities, most importantly through a capital guarantee fund that

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facilitates access to loans on the capital market. At the same time, the associations are also engaged in profit-making activities, which they use to cross-finance social housing activities. For the EU, this represents a form of illegal state aid (Priemus & Gruis, 2011). “Europe says you either have state activities or market activities. Housing associations are hybrid organizations. They operate on the market, just like developers, and invest their profits in social housing.” (van der Veer, personal interview). The Dutch government and the European Union have agreed that social housing is targeted more closely to poor households and the maximum income limit for social housing access is reduced to €34,100 per year. At least 90% of the stock has to be allocated to this target group (Elsinga & Lind, 2013). This implies that the social housing stock, particularly in Amsterdam, needs further reduction.

Based on national, local and lately also EU decisions housing in Amsterdam has thus been pushed closer to the market. Importantly, however, the reforms did not fully offset post-war de-commodification policies. Housing associations are still required to include at least 30% social housing in new construction. They are not only supported by the aforementioned national capital guarantee fund, but also through a land provision agreement with the local government, which provides land at below market price (Buitelaar, 2010). Likewise, rent regulation is still in effect as well as allocation regulations for part of the city’s housing stock albeit in a relaxed form. In addition, there is still a system of demand-side subsidies to support poor renters. The reform trajectory in Amsterdam is thus a clear example of a layering of institutional structures in the course of neo-liberal reforms. Today, redistributive and market-based layers co-exist.

3.4.4. Effects on housing market structures

But how concretely did the changes affect the structure of the market? Here, we concentrate on two types of effects: changes to the tenure structure and to rent levels.

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The most visible effect occurred in the construction of new dwellings. Following the strategic shift towards homeownership the proportion of rented and owner-occupied housing in new construction reversed over the last 20 years. Where the latter represented no more than 10% of new construction in the late 1980s, this rose to more than 60% in 2009, and remained around 50% even during the recent recession (Figure 1). This was mainly due to the fact that housing associations got re-oriented to owner occupied housing. Already in 2003, 69% of newly built housing by the associations was for sale, whilst only 31% was rental housing (AFWC, 2004).

Figure 1: Share of owner-occupied housing on total new construction, Amsterdam, 1988 - 2009

 

   

       

                                                                                         Source: CBS, Statline, 2011; O+S Amsterdam, own calculations.  

                         Together with the amalgamation, demolition and conversion of rented

housing into owner-occupied housing this resulted in a considerable decline of the rented sector in the period between 1995 and 2009. The share of social housing was reduced from 59% in 1995 to less than 50% in 2009. The privately rented segment shrunk from almost 30% in 1995

0%

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to little more than 20%. The owner-occupied sector gained 17 percentage points. In 2009, it accounted for 28.8% of all dwellings.20 (Figure 2) Rent levels increased markedly between 1995 and 2009. Overall, the median rent jumped from €304 in 1995 to €389 in 2009, corrected for inflation. This amounts to an increase by 28%. More telling than the median rent level is an examination of the rental market by rent level categories. As the data show, the stock of inexpensive units was reduced, while more expensive dwellings were added to the stock. In the least expensive category, the share of dwellings decreased by 5% (15,100 dwellings). In the second cheapest category, the decrease totalled some 21% (around 73,000 units). The most expensive segment grew by 3.4%, or 9,000 units (See Figure 3).

Figure 2: Tenure structure Amsterdam, 1995 - 2009

 

   

                                          Source: Onderzoek & Statistiek, own calculations.

20 As abovementioned, the local plans for transforming the city’s tenure structure were even more drastic. See Aalbers (2004) for an explanation of why they were not fully realized.

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Clearly, Amsterdam’s housing market structure has adapted to the policy change. First, a pronounced shift occurred towards owner-occupied housing. This was accompanied by substantial rent increases, in particular through a reduction in inexpensive market segments. In the next section we will address how these supply-side changes affected housing affordability and access.

Figure 3: Changes in rental stock by rent level categories, Amsterdam, 1995 - 2009, corrected for inflation  

 

 

Source: Onderzoek & Statistiek, 1995; 2009; own calculations.

3.4.5. Effects on housing affordability

Changes to the housing supply do not directly translate into changes in housing affordability. Affordability results from an interaction between demand and supply. On the demand side, income developments are central. Stagnating incomes can create growing rent-income gaps in a situation where on the supply side rent levels rise. For Amsterdam, data show that the median income level rose by 31.5% in the period between 1995 and 2009. This makes the median rent increase of 28% look less dramatic. More interesting however are relative income developments per income category. The data show that when the poor and affluent (1st and 5th quintile) are compared, incomes in Amsterdam developed at an almost

-­‐25.0%  -­‐20.0%  -­‐15.0%  -­‐10.0%  -­‐5.0%  0.0%  5.0%  10.0%  15.0%  

€1  -­‐  €  149   €150  -­‐  €299  

€300  -­‐  €449  

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equal pace over the last 15 years. Incomes for the 1st quintile rose by 34%, while those for the 5th quintile by 40% between 1995 and 2009 (See Figure 4). Growing income inequality, however, is evident when the very affluent and the very poor are compared. While incomes in the 1st decile rose only by 16%, those in the 10th decile rose by 34% (all corrected for inflation; Onderzoek en Statistiek, 1995; 2009). Growing income inequality is a nation-wide trend in the Netherlands and not limited to Amsterdam. On average, incomes in the Netherlands increased 1.4% per year between the mid-1980s and the late 2000s. However, for the bottom decile the increase was only 0.5%, while for the top decile it was 1.6% (OECD, 2011). Compared to the rest of the country, incomes in Amsterdam are on average lower, due to the large number of students and single households. However, recently the difference to national average has become smaller.

Figure 4: Relative income development Amsterdam, 1995 - 2010, corrected for inflation  

                                                                                                                                             

Source: Onderzoek & Statistiek, 1995 - 2009; own calculations.

The data reveal that overall housing affordability in Amsterdam deteriorated between 1995 and 2009. The median rent-income ratio increased from 21.1 to 25% (see Table 1). A more differentiated analysis by income quintiles reveals that poor households in particular pay more

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1995   1997   1999   2001   2003   2005   2007   2009  

Income  1st  decile   Income  10th  decile  

Income  1st  quinHle   Income  5th  quinHle  

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(1st quintile +8.2%), affluent pay slightly more (5th quintile +1.6%), while for middle-income households the ratios remained fairly stable. When further broken down into income deciles we see that the very poor clearly pay more (1st decile +12.2%) and the very affluent a bit more (10th decile +3%). The interpretation for middle-income households is less clear, also because the percentage changes are rather low and since ratios fluctuate over the years interpretations about changes based on only two points in time have to be made with caution. However, the data suggest that lower middle-income households paid less while higher middle-income households paid a bit more in 2009 than in 1995.

Table 1: Housing affordability Amsterdam 1995, 2009, rent-income ratio

Source: Onderzoek & Statistiek, 1995, 2009. Own calculations.

Having said that, households in Amsterdam can draw on a fairly extensive system of housing allowances, which has to be taken into account for affordability calculations, since the very idea of the scheme is to close rent-income gaps, particularly for poorer households. To what extent have allowances been able to compensate for higher housing costs

T able  1:  H ous ing  affo rdability  A ms terdam  1995,  2009,  rent-­‐income  ratio

Change  1995 2009 1995  -­‐  2009

Median  all  rental  households 21,1 25,0 +3,9

1st  quintile 31,6 39,8 +8,22nd  quintile 26,9 27,1 +0,23rd  quintile 20,4 20,8 +0,34th  quintile 17,0 17,4 +0,45th  quintile 12,9 14,4 +1,6

1st  decile 37,1 49,3 +12,22nd  decile 31,9 35,7 +3,83rd  decile 30,1 28,8 -­‐1,34th  decile 27,1 25,1 -­‐2,05th  decile 23,7 22,8 -­‐0,96th  decile 21,9 20,1 -­‐1,87th  decile 19,2 19,3 +0,18th  decile 17,5 18,0 +0,59th  decile 15,9 16,5 +0,610th  decile 13,0 16,0 +3,0Onderzoek  &  S tatis tiek,  1995,  2009.  Own  calculations .

Before  allowances

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in the city? The data reveal that the allowances had a strong dampening effect on affordability ratios in the city. Corrected for allowances, the median rent-income ratio increased only slightly, from 20 to 21.7% between 1995 and 2009 (Table 2). Importantly, when affordability ratios before and after allowances are compared over time it is evident that the allowance system has become relatively more important in keeping affordability ratios low (See Figure 3).  

Figure 5: Affordability Amsterdam 1995 - 2009, rent-income ratio    

   

                 

Source: Onderzoek en Statistiek, 1995 - 2009. Own calculations.

   When analysed by income groups the data show that the allowances have a quite strong redistributional effect. Without allowances particularly the ratios for low-income households would have increased. After allowances ratios for low-income households have risen only slightly (1st decile), or even decreased (2nd, 3rd decile; 1st quintile) (See Table 2). Affordability ratios for affluent households, on the other hand, remain about the same before and after allowances. This means the allowance system is fairly accurate in its targeting and supports mainly those on low incomes. After correcting for allowances, it is thus foremost high-income households who pay more on rental housing after the reforms than before (10th decile +3%; 5th quintile +1.7%). Middle-income households tend to pay a bit more, but the changes are small. Overall, low-income households have

18%  19%  20%  21%  22%  23%  24%  25%  26%  

1995   1997   1999   2001   2003   2005   2007   2009  

Before  allowances   A[er  allowances  

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even lower affordability ratios than prior to the reforms, with the exception of a slight deterioration for those on very low incomes.

Table 2: Affordability Amsterdam after allowances 1995, 2009, rent-income ratio

 Source: Onderzoek en Statistiek, 1995 - 2009. Own calculations.

3.4.6. Effects on housing accessibility

But how did the changing market structure affect the ability of the poor to access housing? Amsterdam has been highly attractive to households in recent years, both rich and poor, and consequently, demand for housing in all segments of the market has been high. However, the market restructuring has clearly altered the accessibility for different groups.

For rich households with financial capital, it has become easier to find accommodation. In the past, the social housing sector and the strictly regulated private rental market determined market access in the majority

Table  2:  Housing  affordability  Amsterdam  after  allowances  1995,  2009,  rent-­‐income  ratio

Change  after  allowances1995 2009 1995  -­‐  2009

Median  all  rental  households 20,0 21,7 -­‐2,2 +1,7

1st  quintile 26,3 25,2 -­‐9,3 -­‐1,12nd  quintile 22,5 22,8 +0,1 +0,33rd  quintile 19,4 20,2 +0,5 +0,84th  quintile 16,7 17,3 +0,2 +0,65th  quintile 12,8 14,5 +0,1 +1,7

1st  decile 33,0 33,8 -­‐11,3 +0,92nd  decile 26,1 25,1 -­‐4,8 -­‐1,03rd  decile 25,9 24,5 -­‐0,0 -­‐1,34th  decile 22,9 23,7 +2,7 +0,85th  decile 21,7 22,2 +1,4 +0,56th  decile 21,1 19,7 +0,4 -­‐1,47th  decile 18,9 19,1 +0,1 +0,28th  decile 17,3 18,1 +0,2 +0,79th  decile 15,8 16,5 +0,1 +0,710th  decile 13,0 15,9 -­‐0,1 +2,9Onderzoek  &  Statistiek,  1995,  2009.  Own  calculations.

After  allowancesDiff.  Before  -­‐  

after  allowance

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of units based on criteria other than the ability to pay. Conversely, the supply of housing for purchase, which those able to pay high prices could buy into, was small. Consequently, those with money also had to wait for a unit. With the shrinking rental sector and the growth in homeownership, this has changed. In line with the policy objectives those who can pay can now more easily access the market. This trend is reflected by changes in the composition of the homeownership sector. We see a disproportionate increase of the most affluent households living in the sector (5th and 4th quintile; see also Figure 6).

Figure 6: Tenure composition by income quintiles, Amsterdam    

   

                                                                                                                                         Source: Onderzoek en Statistiek, 1995; 2009; own calculations. Regulated = social or private rental dwellings with rents below liberalization limit, non-regulated = rental dwellings with rents above liberalization limit, ownership = owner-occupied dwellings. Own calculations.

While homeownership is growing but becoming increasingly inaccessible for the poor, the share of social housing, with allocation based on non-market criteria, is gradually shrinking. Access to the sector is difficult due also to the many middle-income households that decided not to move to the homeownership sector but rather remained in social housing. There

0%   20%   40%   60%   80%  100%  

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regulated   non-­‐regulated   ownership  

0%   20%   40%   60%   80%  100%  

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are two reasons for this. The first regards high prices for homeownership. The second reason relates to a specific aspect in Dutch post-war social housing regulation. While tenants can only apply if their income is below a certain limit, they do not have to move out of the sector once their income rises. Many middle-income households decided to stay in social rental housing (Aalbers, 2004). The fact that they did not move has prevented a further residualization of the social housing sector. Figure 6 confirms the findings by Musterd (2014) that the social rental sector has remained relatively mixed. However, low mobility has exacerbated accessibility problems of the poor to the sector.

Taken together, with market restructuring accessibility for poor households to Amsterdam’s market has become more difficult than in the past. At the core, there is growing competition for a shrinking social housing sector with low mobility. This is reflected in the development of waiting lists for the sector. As Uitermark (2009:357) reports, between 1982 and 2008, the average waiting time for a two-bedroom apartment has rocketed from two to ten years. Beyond that, for a growing number of low-income households striving to live in the city, reliance on the waiting list is not a viable option. In many cases they lack a proper working contract, sufficient Dutch language skills and adequate knowledge of given housing rights – all of which is necessary to enter the regulated housing sector.

3.5. Discussion and concluding remarks

Amsterdam is sometimes considered a prime example of a ‘European city’ and a ‘just city’, not least with regard to the de-commodified structure of the urban housing market that was established after the War. In contrast to market-dominated American cities, poor Amsterdam residents could live in a socially-mixed social rental sector. Also, housing in the city was comparably affordable and accessible. We have shown how the city’s market has come under neo-liberal pressure since the beginning of the 1990s at different scales. At the national level the housing sector has been targeted as part of a broader restructuring of the

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Dutch welfare state. Local policy makers, while initially reluctant to follow national reform proposals, have become more active in putting forward marketization plans in attempts to relax local budget shortages. Lately, the supra-national level has also put pressure on Dutch governments to restructure the housing sector, following from concerns by the EU about unfair competition among housing providers. Policies at these three levels have interacted in the marketization of Amsterdam’s market. There is still a comparably large social housing stock, targets to build 30% of all new units as social housing, and rent regulations as well as demand-side subsidies to support the poor [who have managed to access the social security system and therefore regulated housing market in the first place]. Nonetheless, a clear shift occurred towards giving market principles a greater hold. As a result, homeownership tripled, rents increased and the social housing sector decreased significantly.

We have differentiated the effects on housing conditions of the poor between housing affordability and accessibility. The affordability analysis revealed that poor households inside the system are still fairly well served by the social rental sector, but increasingly supported by housing allowances. Also, they can enjoy a sector which is still only modestly residualized (cf. Musterd, 2014). The effects of market restructuring on the poor, however, are already visible with regard to accessibility. A growing homeownership sector with rocketing prices and a shrinking social rental sector, where mobility is low, have made accessibility clearly more difficult. Poor households have to cope with drastically longer waiting lists for regulated housing. Also, there are a growing number of low-income households with precarious employment and / or migrant background, who strive to live in the city, but lack a proper working contract, adequate Dutch language skills and knowledge of given housing rights. For many of them, the regulated housing sector is not a viable option.

After twenty years of reforms, Amsterdam’s housing market still provides fairly good support to poor market insiders. However, access to this system has become increasingly difficult for low-income outsiders. These findings can be interpreted as the result of a layering of older de-

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commodification and newer market-based policies in the city’s housing market (Brenner et al. 2010).

Recent developments make it uncertain to what extent poor insiders will stay protected in the longer term. The national government strives to increase rents in the entire social rental sector to market rents. For that, a new landlord tax is planned for 2014 in order to encourage housing associations to further increase rents (Elsinga & Lind, 2013). At the same time, budgets for housing allowances are subject to political negotiation. A proposal was made that associations collectively contribute to the allowance costs starting in 2014. For the associations in Amsterdam this would mean a burden of €51 million per year. Clearly, these two developments threaten affordability for poor insiders in the market. Next to that, there are new policy proposals on the table for social housing. The national government intends to increase pressure on associations to sell off social housing. The Kamerbrief Woonvisie 2011 (vision statement of the minister sent to Parliament) stated that associations should be legally obliged to sell units to private owners, which effectively would mean a shift from a “right to sell” to an “obligation to sell”. At the same time, new policies are proposed to pressure better-off households to leave social housing. To this end, an income-dependent rent-policy is being discussed in the parliament, which would incentivize higher-income households to leave the sector. This reflects an on-going concern to reduce the ‘skewed income ratio’, but is also considered a means to respond to the accessibility problems for the poor. What is overlooked in this discussion is that as more households with higher income leave the social rental sector, it will become more residualized. If these policies are continued, those who manage to get access to the social rental market may then be relegated to a small and residualized sector.

Our findings contribute to two broader debates. First, to a body of knowledge that challenges the notions of the European city with regard to a growing marketization of European urban development, not least with regard to urban housing markets (see e.g. Aalbers, 2011; van Kempen & Murie, 2009; Uitermark, 2009; Uitermark et al., 2007). We have shown how even one of the most de-commodified housing markets has been incorporated into forms of neo-liberal urbanism since the 1990s. This is

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not to argue that we currently see an ‘Americanization’ of European urban housing markets. Such a statement would be too simplistic. Our findings suggest that there is still much that distinguishes Amsterdam’s market from fully liberalized housing markets. However, the direction towards greater market influence is clearly discernible, even though these changes are occurring at fairly slow pace. Nonetheless, they raise important questions about how to think about European urban housing markets and European cities more broadly in the contemporary period.

Secondly, our findings contribute to discussions about Amsterdam’s status as a just city (see Fainstein, 1999; 2010; Uitermark, 2009; 2011; Novy & Mayer, 2009). If Amsterdam was considered just in the past for the fact that, among other aspects, housing for the poor was relatively affordable and accessible and housing conditions were disconnected from market forces to a greater extent than in other cities, our analysis suggests, following the findings by Uitermark (2009), that justice in the city has clearly been reduced. Most importantly, as we have shown, in the course of the reforms accessibility for rich households has become easier, while for the poor it has become more difficult. Having said that our findings, concerning housing conditions for poor market insiders, also suggest that the just city has not yet entirely evaporated. An ‘in memoriam’ for the just city (Uitermark, 2009) may be premature, and rather than ‘just a nice city’ (ibid.), Amsterdam may currently represent a neo-liberalizing just city as regards the state of the urban housing market. Nonetheless, the direction clearly points to the fact that over the long term Amsterdam may lose the features that have distinguished it for many as an example of a just city.

The paper raises a number of questions for further research. One relates to the spatial effects of market restructuring. One could argue that it matters not only if and under what conditions poor households are able to live in the city under conditions of accelerating neo-liberalization, but also where. In the past, Amsterdam’s housing stock has mitigated the direct translation of social inequalities into spatial patterns to a greater extent than other cities (Musterd & Ostendorf, 1998). Access to all neighbourhoods was, until recently, a realistic option for the poor. However, important changes are afoot. Firstly, until recently, the 30%

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share of social housing that housing associations have to construct had to be part of every completed project. This rule has been abolished and associations can now also build the units elsewhere. Secondly, for a long time there has been no price differentiation by location in regulated rental units in Amsterdam. Recently, rent regulation has been relaxed and the possibility to charge higher rents for better locations has been introduced (van der Veer & Schuiling, 2013). These developments bear the danger that, with the restructuring of the market, patterns of spatial exclusion will also become more pronounced in Amsterdam.

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Chapter 4: Comparing New York, Amsterdam and Tokyo  

   

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Abstract

Market-based reforms have played important parts in restructuring urban housing sectors in recent decades and have increasingly marginalized or excluded lower income groups, especially in the so-called ‘global cities’ where market pressures have been strongest. While accounts of housing policy and market transformations in cities are not uncommon, existing studies demonstrate a strong North-American bias. Moreover, comparative analyses have so far been rare. In this paper, neoliberal transformations in housing practices and conditions are examined in three highly differentiated and contrasting cities from three different continents: New York, Amsterdam and Tokyo. The analysis demonstrates remarkable variegation in the manifestation of neoliberalization of housing as well as considerable path dependency in terms of housing policies, practices and market restructuring. What becomes evident is that both symbolic and de-facto erosion of the ‘right to the city’ for low-income residents, while a relatively ubiquitous outcome of housing marketization, is strongly mediated by local housing practices, structural constraints and policy legacies and regimes.

Key words: housing neo-liberalization, comparative urbanism, housing

policy, housing market

 

 

 

 

 

 

This is an Accepted Manuscript of an article published in the InternationalJournal of Housing Policy on 11 July 2014, available online: www.tandfonline.com/doi/abs/10.1080/14616718.2014.928098#.VFDNJeeLH3q.

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4. Market Based Housing Reforms and the 'Right to the City': The Variegated Experiences of New York, Amsterdam, and Tokyo

4.1. Introduction

Over the last two decades, the accelerated marketization of housing provision and consumption across Western societies has become the subject of wider debate in urban research and, increasingly, the social sciences more broadly (see Aalbers, 2008; Forrest & Murie, 1988; Ronald, 2008; Schwartz & Seabrooke, 2008). More recently, attention has centred on the dysfunctional effects of housing de- and re-regulation for low-income households at the urban scale, highlighting how intensified housing commodification is threatening the poor in their ‘right to the city’ (Harvey, 2008). Moreover, considerations of market-facing housing reforms (e.g. Aalbers & Holm, 2008; Musterd, in press; Hedin et al. 2012), have often overlapped work on state-led gentrification (e.g. Hackworth & Smith, 2001; van Gent, 2013; Wyly et al. 2010) – with the latter often eclipsing the former – to provide evidence of how neoliberalization and housing are related in regard to concrete mechanisms that lie behind the growing exclusion of low-income households from cities.

Despite the marketization of urban housing markets representing a ‘global’ phenomenon (Smith, 2002), explanations of urban housing market transformations, nonetheless, demonstrate a strong North-Atlantic bias. In fact, international comparative accounts of housing marketization have largely been absent (cf. Lees, 2012), especially those that look at, and between, cities beyond the English speaking world, meaning that systematic knowledge of processes of differentiation and impacts of institutional and housing system contexts remain limited.

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In addressing this omission, this paper provides a comparative analysis of market-based housing reforms over the last two decades in three explicitly diverse global city contexts where marketization pressures have become particularly pronounced: New York, Amsterdam and Tokyo. Considering these three cases, the specific contribution of the paper is to highlight the role of housing systems and institutional policy contexts in shaping policy changes and market transformations. Against the notion of generally applicable neo-liberal policy and restructuring pathways we present three city contexts with highly differentiated experiences of urban housing market reforms that have affected low-income households in their right to the city. Essentially, New York provides a starting point, not only because of its ‘paradigmatic status’ as a market liberal city (Fainstein, 2001), but also because of the nature of transformations, which were strongly orientated around the de-regulation of the private rental housing sector. Amsterdam, by contrast, is a characteristically social-democratic housing regulation system, and in the mid-1990s more than two-thirds of housing was either rent controlled or owned by social housing associations. Since then, home ownership rates have almost tripled and housing associations have retreated in line with a massive social rental sector restructuring. Finally, Tokyo represents a developed, non-Western context from which to consider the influence of developmentalist state practices and a productivist policy regime. Here, neoliberal influences on policy more broadly have interacted with the housing system to exclude low-income households through the regeneration of the core city and the elimination of low-quality, low-price private rental housing stock.

The paper proceeds from an exploration of housing market reform processes and the implications for low-income urban households, as well as the relevance of our three-city comparison for advancing understanding in housing and urban research. The comparison involves aspects of process tracing and assumes path dependency where material, historical and geographic context ‘matter’ (Bengtsson and Ruonavaara, 2011), but with a focus on outcomes in terms of housing conditions. We then consider the three empirical cases in turn, identifying key policy shifts and drawing upon secondary data sources to illustrate how

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differentiated manifestations of market-orientated reform have impacted the prospects and conditions of urban households, to diminish their right to the city.

4.2. Neoliberalization and Urban Housing Market Reforms

Since the 1980s, housing regulation has undergone pronounced changes across the vast majority of developed societies. While transformations have not been exclusively neo-liberal in nature, privatization and marketization of housing policies and practices have dominated in context of a broader neoliberalization of regulatory arrangements (Dodson, 2007; Forrest & Murie, 1988; van Vliet, 1990; Ronald, 2008). Most essentially, governments have attempted to reduce the level of de-commodification in housing sectors, i.e. the degree to which housing access is disconnected from market mechanisms, in order to promote private market provision. This has entailed, in various measures, strategies to demolish or sell-off social rental housing; reduced subsidies for rental housing construction and a switch to targeted household benefits; deregulated rents; and the promotion of (low-cost) homeownership.

Our analysis builds on a recent stream of inquiry that has focused empirically on the effects of neoliberal housing policies on urban housing markets. Such studies have taken different starting points. A number of authors have highlighted the reconfiguration of urban social rental sectors (Aalbers & Holm, 2008; Hackworth, 2003). Meanwhile, gentrification studies, specifically in North-American cities, have related the expansion of neighbourhood transformations and inner-city investment to market-facing changes in housing regulation (Wyly & Hammel, 2004; Lees & Ley, 2008)

A couple of studies have gone one step further, detailing the linkages between market-based reforms, market restructuring and housing outcomes. These studies have shown how market-based reforms not only

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led to structural reconfigurations of urban housing markets, but also make them more exclusive, threatening poor households in their ‘right to the city’ (see for example Wyly et al 2010; Wyly and DeFillipis, 2010). This is achieved in numerous ways, including the reduction in social or protected rental housing, leading to affordability problems for poorer households, or through shifts from project-based to demand-side subsidies, which make it more difficult for poor households to find affordable housing in central city locations. Similarly, shifts towards owner occupied housing stimulate speculative activity, which also undermine the availability and affordability of rental housing.

Understanding, however, has largely been based on North American cases, leading to a somewhat one-sided view of housing marketization processes and their outcomes for social inequality in cities. Research from elsewhere has, nonetheless, begun to indicate the multifaceted features of housing marketization and what it represents in terms of the right to the city for lower-income households. Studies by Hedin et al.(2012) on the ramifications of the restructuring of Sweden’s housing system (see also Christophers, 2013), or by Aalbers and Holm (2008) on the privatisation of social housing in Berlin and Amsterdam point to how context matters a great deal for both reform trajectories and effects (see also Lundqvist, 1992 or Murie et al. 2005). Such studies also point to the crucial role of broader institutional contexts for understanding housing transformations and the impact of reform.

4.3. Three Urban Housing Market Contexts

Many theories of neoliberalization assume patterns of convergence around a distinct form of urbanism. Indeed, Leitner et al (2007:4), identify that a compelling assumption has been that advances in neoliberal discourses, policies, and subjectivities has shaped a ‘neoliberal urbanism‘ characterised by entrepreneurial forms of urban governance, an elevated role for private sector interests in urban projects, and, importantly for this paper, an entrepreneurial and self-regulated approach to urban dwellers and dwellings. However, as Brenner et al. (2009)

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highlight, market-based transformations and related forms of exclusion, while becoming increasingly ubiquitous processes, are embedded in, and premised upon, pre-existing institutional structures, making reforms highly contingent on local economic, political and cultural circumstances and leading to variegated pathways in different places.

On this basis, the remainder of this paper contrasts the experiences of housing market reform in New York, Amsterdam and Tokyo, respectively, in order to highlight the role of context in understanding the effects of housing marketization. Insight into three specific city contexts raises questions about the representative nature of the cases. New York, the ‘paradigmatic city’ in the debate certainly has an exceptional status in the US when it comes to the functioning of the housing market. Greater regulatory efforts to de-commodify housing, but also greater market pressures have clearly distinguished the city’s market from the rest of the country. Amsterdam, one could argue, represents an extreme case of the wider Dutch social-democratic housing systems in which it is embedded. National interventions into housing have historically become more pronounced in the city, not least because of the city’s specific economic and demographic structure. Tokyo, finally, represents an archetypal East-Asian developmental-productivist regime regarding the structure and functioning of the housing market.

For Leitner et al (2007) neoliberalization translates onto the urban terrain through the conduits of urban regulation and social welfare regimes. Neoliberal urban regulation typically privileges property ownership and ownership rights, and promotes urban restructuring through de- or reregulation. Social welfare regimes under neoliberal pressures are usually transformed by the withdrawal of rights to, and subsidies for subsidized goods (such public housing provision) exacerbating spatial manifestations of social inequality. Considerations of these conduits provide contexts for our evaluation of housing marketization pathways.

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Table 1: Housing market characteristics New York City, Amsterdam and Tokyo City

Population Total

housing stock

Home owner ship

Private rental

housing

Social / public rental

housing

United States 308.7 ml 130.4 ml 67.8% x31.7% 0.3%

New York City

8.35 ml 3.10 ml 32.9% y61.1% 5.9%

Netherlands 16.6 ml 7.04 ml 56.0% z9% 35.0%

Amsterdam 0.75 ml 0.39 ml 28.8% z21.8% 49.4%

Japan 126.6 ml 57.6 ml 61.1% 26.9% *8.9%

Tokyo City 8.9 ml 5.95 ml 47.7% 39.7% *12.6%

Sources: US / New York: Census Bureau (all numbers from 2008); NL: CBS (various years); Amsterdam: CBS, O&S (2009); Tokyo Statistical Yearbook (various years), Building Centre of Japan (2013) *Public rental and company supplied rental housing for employees x Includes units under various federal, state and local subsidy programs y Includes units under federal subsidy programs (e.g. Section-8), Mitchell-Lama rental, rent-controlled, rent-stabilized, Article 4 /5, HUD regulated and ‘in rem’ units z Includes private rental housing under rent regulation. The rest of our analysis concerns changes in housing policies and regulations with a focus on transformations in tenure sectors and relationships between them. Housing policies play a critical role in structuring market tenure mix, shaping what sort of housing is available, entry criteria, and, to varying degrees, at which price and to whom. While policies have a key influence on housing conditions (cf. Barlow & Duncan, 1994), transformations do not directly translate into housing outcomes. These also hinge on factors such as income developments, demographic changes, shifting housing preferences, etc. An anchor point

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for our analysis is that from changes in institutional and tenure frameworks, housing outcomes can be approached. Also of interest is the way policy transformations combine in each context to exclude lower-income households from central cities. According to Gerring (2007), comparative studies facilitate context-specific understandings, although comparison itself is a contentious methodological notion. In this paper we aim for a mid-range comparative analysis (see Kemeny and Lowe 1998), which on the one hand seeks to avoid unstructured juxtapositioning of different national (and in this case, city) cases, and on the other, data-driven variable-oriented comparisons that can disguise or over-elaborate meaningful trends and divergences. Certainly, more fine-grained studies on each aspect of housing and urban transformation are available for all three cities individually. Our aim, however, is not to add another layer of detailed empirical analysis, but rather to consolidate existing data and analyses in order to illuminate the role of context in shaping reform pathways. Our analysis has, moreover, a largely chronological nature that tries to understand historical processes, assuming considerable path dependency in each city where material, historical and geographic context matter (Bengtsson and Ruonavaara, 2010). The restructuring of tenure sectors, furthermore forms a specific lens for understanding processes of transformation and exclusion.

In our reference to the ‘right to the city’ we follow Harvey’s (2008) interpretation of this Lefebvrian notion. For Harvey, the right to access and decide about the future of the city is, subsequent to the accelerating commodification of urban space, increasingly falling into the hands of a small financial elite, who use urban development as a source for profit extraction, while pushing out and excluding those with limited resources. The right to the city is both a cry about this intensified dominance of the private market in shaping urban space, and a demand to actively challenge and contest it. There is a growing body of work that focuses specifically on housing, and processes of commodification, and relates them to debates about the right to the city. For the present analysis, we also deem it a useful framework in two ways. For one, our argument is that neo-liberal state transformations are an important driving force in the commodification of urban housing markets and are central to

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understanding the exclusion of the poor in the context of expanding private market influence. At the same time, recognition of the protective measures that have more successfully shielded low-income households from market forces in the past, we would argue, also open up possibilities to think about, and organize for, alternative ways to regulate urban housing markets in order to reach more equal and just cities. The context-specific differences in the institutional set-up of housing markets and related changes to them that we demonstrate also point to the politically constructed nature of urban housing markets and the possibilities to actively challenge and contest them.

4.4. New York

Without doubt, New York has featured most prominently in debates on neoliberal urbanism and real estate-induced transformations of global cities (see Fainstein, 2001; Smith, 2002). Weak central state structures have traditionally combined with fiscal localism, facilitating the development of local growth coalitions that have driven intense urban development. New York housing construction and real estate consequently adopted a central position in the urban political economy, simultaneously satisfying objectives of local leaders and global real estate investment. At the same time, housing market intensity has stimulated socio-spatial polarization and exacerbated housing conditions for the poor (Mollenkopf & Castells, 1990).

In the post-war period in particular, a number of de-commodification policies were implemented in New York’s housing market. While going farther than in most other U.S. cities, these policies have, however, not been part of a coherent de-commodification strategy that has sought to systematically disconnect housing access from market mechanisms. Rather, interventions were characterized by ad-hoc measures to alleviate the most severe housing problems resulting from volatile housing market conditions (Braconi, 1999). Historically then, housing policies have reflected both growth oriented objectives and social policy concerns, in ‘a marriage of machine politics and progressive visions of reform’ (Wyly et

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al. 2010: 2606), with the latter, however, never fundamentally challenging the former.

While de-commodification attempts occurred well before the 1950s (i.e. the 1901 tenement law and the first low-income housing projects in 1937), it wasn’t until after World-War-Two that policy frameworks extended their influence on market structures. De-commodification was achieved, primarily, through private rental market regulation, seeking to mitigate affordability pressures without substantially curtailing real-estate growth (Harloe et al. 1991). Specific interventions typically comprised a number of federal, state and local programs, resulting in an overly complex and fragmented tenure structure, reflecting the lack of a comprehensive regulatory strategy.

The neoliberal re-orientation of housing policies was initiated in the 1970s, when federal urban development and housing funds were cutback.

After New York declared bankruptcy in 1975, the promotion of the city as an attractive investment place became a greater political priority (see Harvey, 2005), undermining social policy objectives and, especially since 1990, reshaping the housing sector (Angotti, 2008). In the following section we consider the different tenures in New York’s housing market and how they were transformed in the course of marketization endeavours.

4.4.1. Market-based housing reforms

One result of the historically more far-reaching intervention in New York compared to other places in the U.S. is the relatively small homeownership sector. Whereas around two-thirds of housing is owner-occupied nationally, in New York, only one-in-three households are homeowners. Particular to the city is a substantial number of housing cooperatives, accounting for almost 200,000 units, complementing a more conventional owner-occupied sector (Schill & Scafidi, 1999). New York homeowners primarily belong to upper-middle and higher-income groups, particularly in the cooperative sector (Furman Center, 2008; Census Bureau, 2013).

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Efforts to promote homeownership – especially for low-income and minority households – regained impetus in the 1990s at all levels of government (Saegert, 2009). Combined with a boom in luxury condominium construction and an expansion of the cooperative segment, homeownership increased from 29% to 33% of New York housing between 1993 and 2008 (Census Bureau). Entering the sector, however, has become increasingly difficult, particularly in light of booming house prices since the turn of the century. Indeed, the price index increased 50% between 2002 and 2006 alone (Furman Center, 2009:10). Consequently, low-income households still constitute a marginal group in the sector (Census Bureau, 2013).

One component of the large rental stock in New York is public rental housing, largely funded by the federal government. In 2008, it comprised 184,000 units, an equivalent to 6% of all dwellings, more than three times the national average. While their small size, remote location and poor quality have led to the stigmatization of public rental units in most U.S. cities, in New York, the sector has traditionally been larger, spread more widely over the city and has also traditionally housed a small share of middle-income households. Meanwhile, supply has never been close to meeting demand with waiting lists often exceeding 150.000 households (Thompson, 1999).

Since the 1980s, federal funding for public housing has dried up and the federal government has promoted the reduction of the sector through targeted demolition, most centrally through the HOPE VI program (Goetz, 2003). Strikingly, in contrast to many other cities, in New York, public housing remained stable and even grew by 4,000 units in the 1990s and 2000s (Census Bureau, 2013). New York’s qualitatively better public housing stock has remained largely unaffected by HOPE VI, due in part to successful tenant protest against the program (Hackworth, 2007).

Private renting, at around 62% of all dwellings, constitutes the largest housing sector in New York. It consists of a myriad of different sub-tenures, but with a clear bifurcation between unregulated and regulated parts, with the former roughly making up one-third and the latter two-

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thirds of the segment (Census Bureau, 2013)21. Important features of the regulated stock are (Federal) Section-8 and (State) Mitchell-Lama units, which derive from low-interest loan programs for private developers. The largest share - dating back to State Laws from the 1940s – are rent-regulated units (980.000 in 2008). Overall, rents are considerably lower in regulated rentals and house many low-income households unable to find housing in the public rental sector.

Over the last two decades, this part of the market has become central to neo-liberalization endeavours. One factor has been a reduction in funding for federal and state programs (specifically Section-8 and Mitchell-Lama) (DeFillipis & Wyly, 2008). Federal funds in particular, have been in decline since the 1980s as part of a broader shift from project-based subsidies to tenant-based assistance (especially Housing Choice Vouchers). A second significant change has occurred to rent regulation. Under pressure from the real estate lobby, New York State relaxed the law in the 1990s (further to liberalization in the 1970s), making it easier for landlords to raise rents. A threshold above which rents would automatically be deregulated (‘luxury decontrol’) was also introduced (McKee, 2008). Amidst booming house prices in the 2000s many landlords have seized the opportunity to take units out of regulation, with more than 100,000 dwellings falling out the rent protected sector (Census Bureau, 2013; see also Bach & Waters, 2007).

We can identify key policy shifts in New York’s market particularly with regard to the private rental market. Homeownership promotion and public housing demolition constituted a central policy concern in the wider neo-liberalization of the US housing system. In New York, their relevance has been dwarfed by the reduction in funding for federal and state subsidy programs for private rental housing and the relaxation of rent control in the segment. These measures have become drivers of market restructuring.

How has this affected poor households in their housing situation? Generally, despite historically greater efforts (compared to other U.S. 21 In 2008; this includes units under HUD regulation, Article 4 / 5, rent stabilized pre and post-1947, Mitchell-Lama rental, rent controlled, and in the ‘in rem’ program.

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cities) to provide housing for those excluded by private housing prices, New York has never successfully resolved its housing shortages and quality deficits (Wolkoff, 1990). Low-income households have always struggled to find decent and affordable accommodation amidst a highly competitive market dominated by private capital, high demand and scarcity of space. Nonetheless, the regulated rental stock, particularly in the public and private rental sectors, did a great deal in dampening housing problems and mitigating pressures in the post-war period, and enabled at least some of the poor to inhabit housing in the (inner) city (Wyly et al. 2010). This has become more difficult over the last two decades. While neo-liberalization has not been a coherent strategy and – following in the tradition of the city’s somewhat chaotic approach – commodification measures have in parts overlapped with new de-commodification attempts, overall, policies have reflected less socio-economically redistributive concerns. The subsequent erosion in inexpensive units, particularly in the private rental market, has driven gentrification and affordability problems, intensifying housing barriers to low income people.

4.5. Amsterdam

Amsterdam provides a significantly different context for neo-liberal urban transformations compared to the market liberal New York case. While in New York today a little more than one-third of all units are shielded from market forces in some way, in Amsterdam it is about 61 %. The city’s development historically has been deeply regulated and firmly embedded in a comprehensive welfare state, in which housing regulation played a significant role. Large-scale intervention was driven not solely by social-democratic pressures to improve universal housing standards (which had gained support with growing housing scarcity and high birth-rates after the war), but also part of Keynesian economic policy, whereby inexpensive housing allowed for low wages and greater international competitiveness (Dieleman, 1994).

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Although the beginnings of Dutch housing de-commodification date back to the early 20th century, policies were consolidated after World-War-Two. Construction became focused on social rental housing provided by non-profit associations, with the sector expanding from 23% in 1960 to 38% of all housing nationally in 1985 (Boelhouwer & Priemus, 1990: 115). This was accompanied on one side by growing direct subsidies, which rose sixfold between 1970 and 1987 (ibid. 110), and on the other by a strict and comprehensive rent regulation law, which also ensured de-commodification in parts of the private rental market. The de-coupling of housing from market forces went particularly far in the big cities, especially Amsterdam (Musterd, in press). Here, a large social rental sector was complemented by a system of strict land-use planning and public land ownership, which dampened socio-spatial division and housing costs to comparatively low levels (Musterd & Ostendorf, 1998).

Since the 1990s, however, as part of a broader restructuring of the Dutch welfare state, housing regulation has become subject to marketization. Political and policy discourses increasingly claimed that the continued de-commodified provision of housing (beyond post-war shortages) constrained choice and put unsustainable financial burdens on the state (Dieleman, 1994). This has more recently been coupled with a specific concern with utilizing housing reforms to promote urban competitiveness through state-led gentrification, particularly in Amsterdam (van Gent, 2013).

4.5.1. Market-based housing reforms

Whereas the social rental sector in Amsterdam was the smallest part of the market in the 1950s with an 18% share, by 1995 it had grown to 58% (O&S, 2010). Significant growth occurred during the 1980s, with economic recession forcing private developers to retreat and construction therefore shifting almost entirely to non-profit associations. In social housing, rents are regulated, largely in terms of quality, and dwellings allocated based on waiting lists. Access has historically been granted to both low and middle-income households.

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With neo-liberal principles in the ascendancy since the 1990s, the long-term objective has become to substantially shrink the stock. It is no longer considered a sector for middle-income groups, and is increasingly being reconstituted as safety-net for those unable to afford market housing (see Priemus, 1995).22 This approach has also been promoted by the European Union and since 2008, EC legislation on competition has forced housing associations to target social housing more closely to economically vulnerable households (Priemus & Gruis, 2011). In Amsterdam the sector has declined substantially, from 58% in 1995 to 48% in 2012 (O+S, 2010). Parliamentary rent adaptation and stock upgrading have also pushed up rents in the sector, with the monthly median increasing from €310 to €389 between 1995 and 2009 (corrected for inflation; O&S, 2010). Together with stock shrinkage this has significantly reduced the inexpensive housing supply in the city.

An important element in the reduction of social housing has been the sale of units to tenants. Whereas sales initially lagged behind agreed plans (see Aalbers, 2004), they took off in the early-2000s and between 1998 and 2012, 19,227 dwellings were transferred from housing associations to private owners (Amsterdamse Federeratie van Woningcorporaties, 2013). This has contributed to the rise of homeownership in the city.

Homeownership has historically been a marginal sector in Amsterdam. This began to change, however, since the 1990s. While attempts were made to expand the stock through the 1970s and 1980s already, after 1990 the promotion of homeownership was intensified and national subsidies for the construction of rental housing were virtually terminated as of 1995. Meanwhile, large tax incentives for homebuyers were retained, mortgage-lending practices were relaxed, interest rates fell and housing associations were encouraged to sell off social housing. All of which contributed to the expansion of the tenure (Aalbers, 2004; Ronald and Dol, 2011). In Amsterdam, both homeownership rates and housing

22 Housing associations in Amsterdam are still obliged to provide 30 % of new construction in the social housing sector – a target which they have also in large parts realized in recent years. However, still, today about 60 % of construction takes place in the homeownership sector, which means that the social rental sector, in relative terms, is gradually shrinking.

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prices increased almost threefold between 1990 and 2010 (O&S). While the purchase of a former social rental unit enabled some lower-income households to get access to the expanding sector, overall, the sharp price increases have pushed homeownership farther out of reach for most of these households. Moreover, many middle-income households, who were expected to move out of social housing, have also struggled to purchase a home.

Private renting has been in decline in Amsterdam since the 1950s. Whereas back then it was the city’s majority sector, in 1985 it accounted for 44% of housing and in 2009 had shrunk further to 21.8 % (O&S, 2010). This followed a lack of political support and few financial incentives for landlords. In most of the units (about 69.5 % in 2013) rules similar to social rental housing apply (absolute rent limits, tenants partly allocated by the municipality), which makes the sector relevant for lower-income households. There is a less strictly regulated part, which is newer and of higher quality, where there is no absolute rent limit (although rent increases for sitting tenants are controlled). In both parts of the private sector, tenants have very secure rights of tenure, which has also dis-incentivised investors. Strikingly, plans to expand the private rental sector vis-à-vis social housing have, until very recently, not been part of marketization strategies. Continuing in a longer-term trend, private renting has remained largely unfavourable to investors and the stock has shrunk further since the 1990s (O&S, 2010). As with social housing, renovation and parliamentary rent adaptations led to sharp rent increases, which has contributed to the overall reduction in inexpensive units in the city.

With the high degree of de-commodification in the decades following World-War-Two, Amsterdam became fairly successful in providing decent housing conditions for low-income households. In fact, for some, the quality of, and access to housing made Amsterdam – in the words of Fainstein (2005) – a prime example of a ‘just city’. The social rental sector in particular offered, by international standards, a high volume of good quality low rent housing that, through spatial spread, also played an important role in mitigating segregation (Fainstein, 2005). Although the basic framework of social housing survived the 1980s, neo-liberalization

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has, ever since, been in the ascendancy. As regards key policy changes, the reconstitution of social housing as a safety net and the termination of direct state funding for provision of the sector have been central to neo-liberalization. They have combined with roll-out programs for tenure conversion and measures to promote homeownership. In the very latest housing policy revisions, a ‘landlord-levy’ has been proposed in which social and private landlords are encouraged to increase rents for middle income tenants in price controlled units, with increased revenues being taxed to offset lost government revenue derived from reductions in transaction taxes for home-buyers. Reforms have led to a profound restructuring of Amsterdam’s stock, with a larger share of units under direct market influence and a sharp decline in inexpensive units. In this context, exclusionary displacement and reduced accessibility to the shrinking regulated housing supply have increasingly emerged as key problems for low-income households, especially younger ones seeking to establish a home in Amsterdam.

4.6. Tokyo

In recent years, debates on neoliberal urban transformations have been subverted by the rise of non-western forms of urbanism. Tokyo in particular has provided challenges to North-Atlantic assumptions, representing for Waley a ‘counter-paradigmatic city’ that remains under-theorized in terms of mainstream conceptual lenses (2013:43). Tokyo’s arrival as a global city was shaped by a ‘developmental state’ focused on planned industrial and economic growth, and sustained by strong political alliances between political, bureaucratic and economic elites (see Johnson 1982). This distinguished Tokyo from market centred, capital driven urban formation characteristic of other global-cities (Hill and Kim, 2000). Land use was mixed and housing policies promoted individual and small-to-medium scale housing development. Along with the growing sense of middle-classness and ostensible socio-cultural homogeneity, Tokyo was thus considered immune from the patterns of segregation found in cities in the Western world (see Lützeler, 2008).

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Housing policy took on a particular role within the developmental state and while on the one hand construction featured in economic growth orientated objectives, on the other, it fulfilled demands of a ‘productivist’ welfare regime in which public policies support economic productive households, rather than extending social rights to de-commodified welfare goods (Holliday and Wilding, 2003). Developmentalism and productivism thus gave housing a particular salience as a good supported by public policy, but provided in commodified forms that sustained the welfare capacity of self-reliant family households.

In the 1990s and 2000s Japan suffered from a sustained economic downturn in which property prices dropped more than a third in value between 1992 and 2002 and interest rates fell to historic lows (zero rates). In context of continued economic stagnation, Japan shifted towards a ‘post-developmental state’ in which neoliberal rhetoric and policies are more clearly evident (Fujita, 2011). Along with the changing nature of developmentalism, the urban housing sector has become increasingly marketized with more intensive and larger scale development practices (Hirayama, 2005).

4.6.1. Market-based housing reforms

Key mechanisms for housing and urban transformation were originally established in line with developmental objectives in the early-1950s, with the inauguration of a comprehensive national housing policy framework in which the state played a central role. Despite the role of public agencies, owner-occupied housing production dominated post-war urban rebuilding. Home ownership was driven by subsidised (long-term fixed-interest) housing loans provided by the Government Housing Loan Corporation (GHLC), as well as Japan’s ‘enterprise society’ in which lifelong employment and welfare provided by employers – including support for home purchase – constituted welfare pillars (Sato, 2007). A third element was the hegemonic ‘standard family model’ that promoted a fixed housing career culminating in detached home ownership, which enhanced the welfare capacity of the family and sustained intergenerational transfers (Ronald and Alexy, 2011, Hinokidani, 2007).

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Home ownership rates boomed in the 1950s and 1960s accounting for around 62% of urban housing by the 1980s up from 26% in 1941 (Hayakawa, 1990).

The downturn in the owner-occupied housing market in the early 1990s initially led to an increase in public money being injected into GHLC loans in a bid to pump-prime the market (see Oizumi, 2007). However, from the mid-1990s onward the government began to retreat from a market-regulating role and demolish the post-war housing pillars. Regulated mortgage interest rates were liberalized and then, from the early-2000s, the government set about dismantling the market of GHLC loans. In 2007, such lending stopped entirely and the GHLC was transformed into the Japan Housing Finance Agency and tasked with sustaining a secondary mortgage market in which Mortgage Backed Securities derived from private lending are circulated. During the same period, labour laws were relaxed (specifically in 1999 and 2003) undermining lifelong employment contracts. Essentially, the benefits of ‘enterprise society’ were not extended to the next generation of Japanese employees, among whom secure work and prospects of wage increases evaporated (Genda, 2001). This combination of housing policy restructuring and labour market deregulation has pulled the rug from under many households, contributing to a decline in housing affordability. Although prices have not significantly increased, it has become increasingly harder for lower-income, and especially younger households, to meet housing costs in Tokyo.

Next to homeownership, public rental housing output was also a dimension of post-war housing policy. Publicly Operated Housing (POH) supplied by local authorities since 1951 has been the main form of social rental housing. By 2007 there were 176,560 units in Tokyo’s 23 central wards23. Public housing essentially provided a stopgap for low-income families, assuming that as household economic conditions improved so

23 Tokyo operates on a number of scales: 1) Tokyo City made up of 23 special wards with 8.9 million people; 2) Greater Tokyo (the prefectural administrative district of Tokyo-To) with 13.0 million inhabitants (23 wards, 26 cities, 5 towns and 8 villages); 3) Tokyo Metropolitan Area (including Yokohama, Chiba and surrounding cities) is the most inclusive categorisation of Tokyo with 31.7 million inhabitants.

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would moves into private housing. This transition was enforced from 1959 onwards, and since 1970 eligibility has been steadily reduced to socially marginal households (Hirayama, 2005, 2010). Stricter access restrictions have been accompanied by declining construction activity in the sector.

From the 1950s onwards, the government has also contributed to urban housing supply through the Japanese Housing Corporation (JHC) (from 1955)24, which in 2004 became the Urban Renaissance Agency (UR). The JHC was established to supply housing for both sale and rent (but mostly the latter) for working people affected by urban housing shortage. In the early-2000s the UR began to diminish its housing provision role to focus on management of the stock (around 420,000 in the Tokyo Metropolitan Area in 2012). Moreover, the agency established an ambition to reduce the total stock by 50,000 units by 2018, with the long-term objective of an overall 30% reduction by 2048. At the same time, UR has continued to be active in the redevelopment of targeted areas, especially in Tokyo.

Based on the Law on Special Measures for Urban Renaissance (2002) the state has promoted private finance initiatives for the construction of middle-income housing, intending to support inner-city repopulation and increase the competitiveness of Tokyo city centre. Much of the new housing constructed in central Tokyo with the support of the UR has ended up being for the luxury market. Furthermore, redevelopment has only taken into account property owners rights, ignoring those of renters who are effectively displaced from upgraded neighbourhoods (Hohn, 2000).

Company provided rental housing has also been a component of Tokyo housing. In the 1960s employers became increasingly active in supplying workers with rental units – often as a means of rendering younger workers to centres of production – and more than 7% of urban housing was made up of company units by the 1980s (Wiltshire, 2003). However, as pressures to, and capacity for providing company welfare receded during the post-bubble economic downturn, swathes of company housing 24 From the 1980s, the agency had been known as the Housing and Urban Development Corporation.

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and land was sold off. In central Tokyo the proportion of company housing had fallen from 5.0% in 1998 to 3.6% by 2008.

Private renting has been central to urban housing, especially for lower-income people, and is the largest sector in the Tokyo city wards. One of the outstanding features of this sector is the small dwelling size. As of 2003, 73.2% of rental units in Tokyo were smaller (floor-area) than 49m² and 40.9% were 29 m² or less (Ronald and Hirayama, 2009). There is a wide diversity in terms of quality, location and type of landlord, the latter including a lot of small-scale amateur landlords. Since the 1990s, this sector has also been restructured. The argument has been that small-scale family investment in private letting was too low-profit, which hindered landlord investment in the stock and held back more professional investors from entering the market (Hirayama, 2010). As the sector has become more professionalized and city centre redevelopment has intensified, the available supply of low-cost rental housing has declined, in particular the stock of multi-household wooden units. While these have been considered substandard, they have nonetheless provided for a large sector for low-income households. Between 1988 and 2008, the stock dropped from 19.6 % to 9.1 % of units in Tokyo. Additionally, diminished security of tenure (with the revision of tenancy laws in 2000) has, in principle, made it easier for landlords in private renting to calculate profits and increase rents through the turnover of new contracts and tenants (Seko and Sumita, 2007). It has also shaped a divide between those on old or new leases: with younger tenants typically on the latter and more vulnerable to market shifts. Meanwhile, the housing stock has been intensively modernised, further undermining the availability of low-rent units. It is also important to note that housing allowance has not been pursued within Japanese housing policy, meaning that most poor urban tenants rely on the market of cheap private rental housing.

To conclude, in the post-war era, Tokyo became a global city with a relatively high home ownership rate, supported by a large price variegated private rental sector and small employer-provided and public housing segment. Embedded in a broader shift towards a ‘post-developmental’ state, since the 1990s Japanese housing regulation has increasingly become marketized, with reforms aimed at reshaping a more

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urban driven economy. The policy focus on housing consumption has gradually given way to private-led redevelopment of Tokyo, where subsidies are centred on large-scale redevelopment projects. Meanwhile, the public housing finance system for individual households has been dismantled, funding for new public rental housing development withdrawn and regulations protecting private renters eased.. Housing policy changes have also interacted with a neo-liberalization of labour policies and a hollowing out of the ‘enterprise society’ model more broadly to increasingly undermine the capacity for more marginal households to live in the city, especially the more central districts.

4.7. Discussion and Concluding Remarks

This paper has provided an analysis that addresses three highly differentiated and contrasting cities (on three continents), that demonstrate remarkable variegation in housing market changes that have combined to increasingly exclude poorer households from urban centres. Three distinctive patterns of exclusion and the way in which transformations in the housing market have undermined the right to the city for the low income and poor can be considered in the case of each city.

In New York, private rental market restructuring has specifically undermined the supply of inexpensive housing, fuelling affordability problems and pushing displacement. Meanwhile, housing vouchers have offered no meaningful alternative. They have not only been insufficient in supply, with 224,000 New Yorker households on the waiting list in the mid-2000s (Rose et al., 2004: 12), but have also pushed recipients farther away from the inner city, where many regulated units were lost (DeFillipis & Wyly, 2008). In 2008, 43% of all rental households were reported to be suffering from a housing affordability problem, while 25% encountered severe problems (Census Bureau).25 For low-income households the situation is particularly tense. Among the poorest fifth of rental households in the city, the median rent-income ratio in 2008 25 Defined as paying more than 30 % respectively 50 % of income on rent.

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amounted to 78.1 % (ibid.). The number of displaced households now exceeds 10,000 reported cases p.a., which excludes those that leave without official notice (Wyly et al. 2010). While there is still a stock of de-commodified units available and the city continues attempts to mitigate severe housing problems, the overall result of market-based reforms of the last two decades has clearly been to further transform the city into “one vast gated community for the rich” (Harvey, 2008: 38).

In Amsterdam access to all urban neighbourhoods was, until recently, a realistic proposition for nearly all income categories. However, with the decline in social rental and lower-end private rental housing, and the growth of expensive homeownership units, increasing proportions of city housing, especially in more desirable areas in more central locations and with better access to facilities, are no longer with the reach of low- or even middle-income households. Since 2000, rent and house price increases in Amsterdam have decoupled from national trends and accelerated well beyond advances in income and inflation, although a fairly effective allowance system has dampened negative affordability effects for very low-income renters.

Even though restrictive tenant protection has remained intact and has reduced direct displacement pressures (van Gent, 2013), as less low-cost units are available, and because existing tenants are particularly reluctant to vacate (even as household income improves), accessibility has emerged as a key problem. Average waiting list times for a two-bedroom social rental apartment have increased from two to eight years since the 1980s (Uitermark, 2009). While the remnants of the socialised post-war housing system still offer protection for those who already live in the city, reforms have clearly curtailed the poor’s right to the city. Also, while in the past more drastic plans for marketization have not been realized in the context of a regulatory landscape dominated by non-profit housing corporations, socially orientated housing practices and public regulation, the consensus around comprehensive intervention has been evaporating and there is now strong pressure from national and local governments for

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further reforms (van der Veer & Schuiling, 2013).26 This will most likely result in greater housing problems for the poor in years to come. A key factor has been the diminished legitimacy and role of housing corporations in Amsterdam, which have since the 1980s supplied most new housing in the city.

In Tokyo, the most important housing market factor has been that new apartment building has, subject to a more explicitly neo-liberal state manifesto, become particularly concentrated in Tokyo, and especially in the most central wards. This has effectively pushed up the price of available housing there more than anywhere else. Crucially, redevelopment on pre-existing residential districts has often been difficult due to the highly fragmented nature of property rights (Sonobe 2001). In this context, displacement of poorer residents from redeveloped districts has been limited, or at least Western style gentrification has been absent (Lützeler, 2008). Upgrading of urban districts since 1990s can therefore be better regarded as a special case of ‘new build’ gentrification (Davidson and Lees, 2005), with the intensified elimination of older – especially wooden – stock undermining low cost rental housing supply for the poor.

Through a combination of shifts in prices and the income structure, Japanese housing has become less affordable overall, but especially in Tokyo. Younger households who have not been as advantaged as their predecessors by government housing market regulation, or had comparable access to secure or better paid employment, have been specifically affected (Hirayama, 2010). According to a Ministry White Paper (MLIT, 2012) between 1989 and 2009, the proportion of disposable income spent on mortgage repayments in Japan grew from 10.7% to 16.9%. This was particularly pronounced for people in their 30s, with an increase from 13.2% to 19.8%. Over the same period, the percentage of disposable income spent on rent for single males under the age of 40 increased from 12.4% to 19.9%, and for single females it increased from 19.0% to 24.7%. It is important to realise then that neo- 26 Reforms include a rule that location is given greater influence in rent setting in the social sector on top of the introduction of a landlord levy (van der Veer & Schuiling, 2013).

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liberalisation of the labour market since the 1990s (and deregulation of employment contracts in particular) have combined with market orientated housing reforms to marginalise or exclude low-income urban residents.

In trying to understand the importance of market institutional and housing system contexts to the manifestations of urban transformations that affect who can live where, these three cities provide particular insights. Moreover, by contrasting them comparatively we instantly recognise how western based models, especially those focused on US- (or even English-) cities in isolation, do not do justice to the complexity and diversity on neoliberal reforms and how they play out in a particular place over a specific period. Table 2 provides a framework from which to begin to more systematically address the comparative differences between these three urban cases. What is particularly of note are the combinations of elements and the links between urban and social welfare regimes and policy and reform practices, as well as the diverse constitution and roles of different tenures in each context. Indeed, housing tenure sectors are particularly contingent. Dutch social rental sectors provide a high standard of housing, contain diverse households by types and have a wide distribution. Even in the most desirable neighbourhoods of Amsterdam can be found concentrations of social rental units that make up a minimum of 20 to 30% of stock. Meanwhile, Tokyo public housing is usually of a liveable standard and is complemented by a small company rental housing stock that serves largely white-collar tenants. Social sectors in both cities thus contrast to New York public housing. Similarly, owner-occupied and private rental sectors represent quite different types and qualities of housing in all three cities.

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Table 2: Housing marketization pathways and their contextual embeddedness in New York, Amsterdam and Tokyo

Historic housing policy approach

Market-based reforms

Implications for the ‘Right to the City’

New York

Market housing provision with redistributive ad-hoc measures, reflecting unresolved political conflict between growth and redistribution orientated objectives in the housing market De-commodification through rent regulation and loans to private developers, together with direct subsidies for marginal public rental sector Tenure structure fragmented; two-thirds rental housing, with private rental market, two-thirds regulated, dominating

Fragmented and somewhat chaotic shift, featuring, most importantly, de-regulation of various private rental protection programs Tenure structure largely stable, but pronounced loss in regulated private rental units in the context of house price boom since the early 2000s

Accelerating displacement and housing problems of the poor in light of erosion of existing ‘islands of affordability’ through loss in inexpensive private rental units

Amsterdam

Large-scale social rental housing provision, reflecting national welfare strategy to de-commodify social reproduction, which became particularly developed in Amsterdam De-commodifiation through direct subsidies to housing associations for social rental housing coupled with strong rent regulation, also for private rental market Tenure structure dominated by social rental housing, marginal homeownership sector and declining private rental market (since 1950)

Comprehensive strategy for marketization as part of broader welfare state restructuring, featuring, most centrally, promotion of homeownership and resituating of social rental housing as safety net Large tenure shifts, with loss in social rental housing and explosion of homeownership sector, which tripled in size

Exclusionary displacement and declining accessibility to the shrinking submarket-rent stock (and increasing waiting times)

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Table 2: Housing marketization pathways and their contextual embeddedness in New York, Amsterdam and Tokyo (continued)

Historic housing policy approach

Market-based reforms

Implications for the ‘Right to the City’

Tokyo

Housing supported by public policy but provided in commodified forms, reflecting developmental / productivist strategies of self-provision facilitated by the state Homeownership promotion through subsidized housing loans, with marginal public rental housing provision and significant company housing supply Tenure structure dominated by homeownership and private rental housing, with marginal de-commodified supply

Restructuring of housing policies as part of shift towards ‘post-developmental’ state, featuring reform of government housing finance and growing focus on private-led redevelopment of Tokyo, interacting with hollowing out of ‘enterprise society’ Tenure structure largely stable, but continued residualisation of public rental housing (only for elderly and vulnerable households), together with renewal of private rental stock

Growing affordability problems particularly for younger people confronted with rising house prices in light of worsening employment situation

Source: own illustration

One of our arguments is that a contrast of housing marketization in New York, Amsterdam and Tokyo provides a counterpoint to the dominance of state-led gentrification studies that have typically ignored how the promotion of market-based redevelopment of certain areas is embedded within a broader restructuring of housing systems and welfare regimes. Aalbers and Holm (2008) have argued – looking between the cities of Berlin and Amsterdam – that ‘a wider view into housing policies… shows a general trend of privatisation, but the concrete face of privatisation seems to depend more on local political structures and networks as well as on specific national and urban policies’ (ibid.:21). Our analysis in this paper seems to support this, but also, by engaging with an even more diverse range of cases, goes somewhat further in unpicking the relationship between convergence (in terms of outcomes

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for the urban poor) and persistent divergence (in terms of ways and means) under neoliberalism.

Indeed, in line with Brenner et al., (2009), our comparison seems to demonstrate that market-facing reforms are strongly variegated and path-dependent reflecting quite significant historical institutional and regulatory embeddedness in distinct combinations of capital, urban and welfare regimes. However, it also supports the position that urban housing marketization is becoming generalized (Smith, 2002), with various governments increasingly promoting housing as a commodity that is bought and sold and used to make money, with detrimental effects on the poor. The specific contribution of this paper has been to show how these processes, while general in nature, have interacted with, and been shaped by, historical context and inherited institutional landscapes. This raises questions about the adequacy of current comparative research, which, as we highlighted earlier in this paper, has been held back by an overemphasis on a particularly western and largely Anglo-Saxon paradigm. The consideration then of less- or even counter-paradigmatic contexts, like Amsterdam and Tokyo, allows us to reflect more objectively on processes and impacts of neo-liberalisation.

More generally, our findings suggest that market-facing reforms in urban housing markets are a central factor for understanding how ‘the right to the city [is increasingly] falling into the hands of private or quasi-private interests’ (Harvey, 2008: 38). The political advancement of private market housing provision – regardless of contextual differences – has reshaped urban housing sectors according to the interest of financiers, but to the detriment of the urban poor. But our analysis also opens up room for change. It points to regulatory measures that have more successfully shielded poor households from market forces in the past, which may represent possible anchor points for contesting contemporary commodification processes and for thinking about, and organizing for alternative, more equal and just cities.

Inevitably, a focus on housing neo-liberalization and market-based reforms has limits as regards developing understanding of contemporary transformations in urban housing markets. A relevant dimension, which

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we have not been able to cover, regards the embeddedness of these three global cities and their housing markets in international flows of finance. New York has certainly been most open to large-scale investment and has attracted swaths of financial capital into the urban housing stock, especially since the beginning of the 2000s. In Amsterdam, the housing financing structure has remained more nationalized, but the growing integration of the Dutch system into global markets is indirectly fostering the international connectivity of the city’s housing stock. Tokyo’s housing system, finally, has so far remained disconnected with international finance, although the promotion of global city-making also involves efforts to connect housing more closely to global circuits of capital. Further, comparative explorations of this macro-economic dimension, how it affects the three housing markets and interacts with neo-liberalization processes, would be fruitful routes for further research.

Finally, we have to acknowledge that the depth of comparison on three radically different cities is limited in an article of this length. It has tried, nonetheless, to focus on a bigger picture in which housing marketization is more or less subtle, is highly differentiated and where tenure structures and their transformation play a more varied role in the exclusion of low-income households. This provides a basis from which to contextualise gentrification orientated analyses that focus on neighbourhood-based processes (cf. Lees & Ley, 2008). It also illustrates the need to encourage research into, and develop conceptual frameworks that allow for, far greater variation in cities and contexts.

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Chapter 5: Vienna

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Abstract

Among West European cities, Vienna stands out as a case that has developed a particularly large de-commodified housing stock over the 20th century. The city’s housing model has also shown greater stability against wider re-commodification trends since the 1980s. This paper centers on two policy changes since the mid-1990s: first, the local government has ceased to provide council housing and is now entirely relying on non-profit associations for the provision of social rental housing. Second, the national government has liberalized rent regulation in the private rental market. The first part of the paper introduces these changes, discusses how they represent steps towards greater market influence and how they put pressure on de-commodified housing, particularly since the mid-2000s. The second part argues that the reforms have initiated a dualization trend among low-income households, forging a division between market insiders and outsiders. The third part reflects whether the policy changes mean that Vienna is also increasingly incorporated into broader re-commodification trends. We argue that substantial de-commodification policies have remained in place, although they have been severely weakened by re-commodification attempts. Representations of Vienna as an exceptional case without significant re-commodification, however, should be questioned.

Keywords:  urban housing market – re-commodification – housing policies – social housing – Vienna                          This paper has been submitted for review.

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5. Re-commodifying housing in formerly ‘Red’ Vienna?

5.1. Introduction

While in the post-war period, alongside the expansion of national welfare states, housing markets in many West European cities experienced greater state involvement and de-commodified housing stocks grew larger, it appears that since the 1980s, the overall direction is towards governmental retreat and greater reliance on market housing provision. The restructuring of national welfare states and the attempts to adapt to residual welfare models together with the rise of competition-oriented urban governance have put pressure on post-war policy models in many cities. They have promoted smaller social rental housing and regulated private rental sectors vis-à-vis an expansion of homeownership. The recent literature has focused on market restructuring in different cities (Aalbers 2004; Aalbers & Holm 2008; Andersson & Turner 2014; Musterd 2014; Watt 2009), but has also put attention on low-income households and has explored whether greater market reliance may undermine their ability to find affordable housing in cities, potentially threatening the socio-spatially integrated “European city” model more broadly (Hedin et al. 2012; Kadi & Musterd fc; Uitermark & Bosker 2014).

In few European cities, de-commodification strategies became as comprehensive as in Vienna. Affordable housing policies go back to experiments with municipal socialism in the 1920s – today better known as ‘Red Vienna’ - and also continued in the post-war period, when housing became a key pillar in the corporatist welfare consensus (Matznetter 2002). Interventions became inscribed into the market structure and in 1990, social rental housing accounted for more than 40.9 percent of housing in Vienna, next to a tightly regulated private rental market with 32.7 percent of all units. Both sectors played important parts

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in decoupling housing access from market forces and dampened housing problems and socio-spatial divisions in the city (Eigner et al. 1999).

Embedded in a relatively stable national context, Vienna’s housing system has also shown greater stability since the 1980s, compared to many other European cities. The Austrian post-war housing consensus has largely been retained, with non-profit associations and subsidized housing still holding a strong position in the market. In Vienna, today, social rental housing is not only the largest market sector, with 42.3 percent of all units, but also dominates new construction, keeping homeownership at a marginal size. For some, this makes Vienna stand out as a somewhat exceptional case as regards broader re-commodification trends (Lawson 2010; Mundt & Amann 2010). Also, the still very large regulated rental sector is argued to have prevented housing affordability problems experienced in cities that have undergone comprehensive market promoting reforms (Lawson 2010).

This paper starts out from the observation that the overall focus on stability in Vienna’s market has sidelined policy changes that have actually occurred since the 1980s (but see Matznetter 1990 or Novy et al. 2001 for notable exceptions). In doing so, also housing problems that have resulted from implemented reforms have been downplayed. In an attempt to correct this dominant discourse about Vienna’s housing market, the present paper centers on two policy changes at the national and local level in the city’s de-commodified housing stock since the mid-1990s. Both have not yet received ample attention in the literature. First, Vienna has gradually retreated from council housing construction and since 2004 entirely relies on non-profit associations for the provision of social rental housing. Second, in a stepwise process, the national government has liberalized rent regulation in the private rental market.

The first part of the paper introduces these changes and discusses how they have put up pressure on de-commodified housing in the city, particularly since the mid-2000s. The second part explores the implications for low-income households. We draw on the dualization concept from welfare research (Emmenegger 2012) to argue that policy changes have forged a division between low-income insiders and

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outsiders on the market and made the time of market entrance critical as regards available housing conditions and rights. The third and final part reflects whether the policy changes mean that Vienna is also increasingly becoming incorporated into broader re-commodification trends. We argue that comprehensive de-commodification policies have remained in place, although reforms have severely weakened them. However, the signs of re-commodification that we discuss raise important questions for conversations about Vienna as an exceptional case of re-commodification, and in doing so, also for conversations about the further regulatory path of European urban housing markets more broadly. We end by speculating about the future development of Vienna’s housing market. Before we turn to our case we briefly sketch the main pillars of the debate around the re-commodification of European urban housing markets.

5.2. Policy pressures on de-commodified housing sectors in European cities since the 1980s

Since the 1980s, the de-commodified structure of European urban housing markets has come under growing pressure. All welfare states have experienced neo-liberal restructuring of some sort and, alongside classical welfare spheres like social security, education and pension systems also housing policies have been adapted to conform to principles of free markets, private property and individual responsibility. State housing provision has lost momentum and social rental housing as a mainstream tenure has been questioned in a number of countries (Harloe 1995). Existing stocks have been offered for sale (like through the Right-To-Buy in the UK (Forrest & Murie 1988)), or were demolished (like through the restructuring policy in the Netherlands (Priemus & van Kempen 1999)), accompanied by attempts to de-regulate rents. While concrete policy pathways have differed considerably across countries, there has generally been greater reliance on market housing provision and the encouragement of asset-based welfare has put property ownership in a more central position (Ronald 2008; Doling & Ronald 2009). If de-commodification has been the dominant policy direction in the post-war

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period in West European countries, it appears that since the 1980s re-commodification has become the overall regulatory trend (Scanlon & Whitehead 2008; Harloe 1995). Welfare state restructuring has particularly affected urban housing markets, as it was here that de-commodified stocks became concentrated in the post-war period.

Shifts in urban governance have furthermore put up pressure on de-commodified urban housing stocks. Globalization and economic restructuring have prompted greater emphasis on urban competitiveness, entrepreneurial place-making and urban renaissance. Local efforts to attract talent and the creative class have involved a focus on soft factors, like housing and neighborhood, for making places that are attractive to highly-mobile knowledge workers. Inner-city renewal, tenure mixing strategies and regeneration programs have upgraded the urban housing supply, but generally entailed a reduction in de-commodified housing sectors (van Gent 2013; Smith & Hackworth 2001).

Policies to grant market provision greater purchase in urban housing markets have impacted low-income households and their housing conditions. The retreat from de-commodification measures has tended to lead to a growth in expensive homeownership that is inaccessible for many households with limited financial resources. They have to struggle for access to the remaining regulated rental sector in less attractive locations. Sweden and Stockholm is an insightful example. While in the post-war period, Stockholm developed one of the most de-commodified housing markets, since the 1990s, there have been radical attempts to re-commodify housing. In this context, Stockholm has experienced large-scale tenure shifts, with the proportion of market-based cooperative housing in the inner-city climbing from 26 to 62 percent over the last 20 years and the public housing stock being cut in half, declining from 19 to 7 percent. As Andersson & Turner (2014) report, low-income households have growing difficulties to find accommodation in the inner city and there is evidence of growing concentration of these households in the inexpensive public housing units at the periphery of the city. In Amsterdam, equally, reforms have triggered a decline in inexpensive social rental dwellings and rising, overly expensive homeownership. While demand-side subsidies have still kept affordability burdens low,

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the city keeps attracting high numbers of poor households, who have growing difficulties to get access to the shrinking inexpensive housing stock, particularly in attractive inner-city locations (van Gent 2013; Kadi & Musterd fc). These developments have raised questions about the future of European housing markets and, specifically, as to what extent the distinct market-buffering function vis-à-vis US urban housing markets is increasingly lost with accelerating re-commodification, giving way to more pronounced housing problems and patterns of socio-spatial divisions also in European cities (Uitermark & Bosker 2014; Hedin et al. 2012).

5.3. Vienna’s housing market context

Although many West European cities have developed de-commodified housing sectors over the course of the 20th century, in Vienna regulatory interventions became particularly comprehensive. Relevant policies were initiated in the 1920s. Severe housing scarcity and quality problems and the apparent failure of private landlords to provide adequate accommodation for the working class in a rapidly growing city sparked political protests that prompted state interventions. Equipped with new electoral power the socialist party implemented progressive luxury taxes and strict rent regulations to systematically curtail private market provision, preparing the ground for the construction of more than 64,000 city-owned social rental dwellings in the following years (Hautmann & Hautmann 1999).

While during the Nazi regime of the 1930s and 40s, housing policies came to a near standstill, they gained momentum again from the 1950s onwards. Housing policies were in large parts centralized, confining the possibilities for local interventions, and became a key pillar of the national welfare state. The corporatist housing system was based on a consensus between Conservatives and Social-democrats, with both getting their share in the allocation of subsidies. Subsidized owner-occupied housing was the main product of the Conservatives’ housing policy, while Social-Democrats favored subsidized public and non-profit

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rental housing (Matznetter 2002, 273). Interventions not only followed social policy objectives, but increasingly also economic motives. Housing de-commodification was considered a cornerstone of Keynesian demand-side management. Low housing costs would free up resources for households consumption, keep wage claims low and, in doing so foster international competitiveness (WIFO 2012).

The Austrian post-war housing model has shown greater stability than many other European systems. The high degree of federalism, which makes fundamental policy changes more difficult to achieve, and the relatively long adherence to Keynesian fiscal policy are important factors in this respect. Tax concessions and forms of indirect subsidies have only gained marginal importance, leaving direct subsidies, and particularly object side subsidies as the favorite housing policy instrument (Matznetter 2002). In the mid-1990s, the Conservatives have successfully pressured for a Right-To-Buy in parts of the social rental stock. Demand for rental housing has remained high, however, particularly in Vienna, and few units have yet been sold (Ball 2005; Bauer 2005)27. In 2000, the liberal-conservative government proposed to privatize substantial parts of the social rental stock. The plans were, however, largely refuted by provincial governments, who voted against selling off their stocks. Eventually, out of 480,000 units only 50,000 were sold nation-wide. In Vienna, sales accounted for 8,000 units, but continued construction had soon made up for the losses already. The decision against the sale also marked a clear political commitment to social rental housing and reinforced the political position of the sector (Mundt 2008). A more recent challenge to the post-war housing model has been the flexibilization of the federal financing structure. While in the past, provinces received funds from the federal government earmarked for housing, since 2008 the discretion over the subsidies is with the provinces. They can now also be used for other purposes besides housing, opening the door for future budget cuts (Streimelweger 2010).

27 Mundt et al. (2009), however, estimate that up to 20 percent of the stock could potentially be sold in the coming years. In addition, the share of newly constructed units that are equipped with a Right-to-Buy is constantly rising and has now reached 100 percent (Mundt & Amann, 2010). Tenants in these units have the possibility for purchase for a period of five years, after they have lived in the unit for ten years.

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At the local level, housing policies have also shown strong signs of continuity. Vienna has always been at the forefront of implementing federal policies and has continued to do so, adding additional funds for affordable housing. The social-democrats have been ruling the city since the ‘Red Vienna’ period in the 1920s – with the only exception of the Nazi regime in the 1930s and 40s – and housing has remained an important political issue for the party. Not least, the city-owned council housing stock is traditionally the place where the social-democrats gain most of their votes (even though this has recently been challenged by the rising right-wing Freedom Party).

The recent development of Vienna’s housing market structure reflects this relatively stable regulatory context (See also Figure 1). Social rental housing continues to be the largest sector in Vienna also today, with 42.3 percent of all units in 2011 (about 364,000 units). Also since the 1980s, social rental housing units were still added to the market and between 1990 and 2010 74.900 units have been newly constructed28. Next to social rental housing, traditionally, also the regulated private rental sector has fulfilled a de-commodifying role in the city. The quality of the apartments has traditionally been lower than in social housing, and rents, accordingly, have been cheaper. In that, it has provided accommodation for low-income households excluded from social housing, i.e. the very poor and migrants29 (Reinprecht & Levy-Voreland 2007; Giffinger 1998).

28 This includes an increase in the stock of 29.213 units between 1991 and 2001 (Statistik Austria, 2013), and new construction by non-profits of 45.700 units between 2001 and 2010, according to GBV (GBV, o.d.). Council housing units constructed between 2001 and 2004 are not considered and hence the number may slightly underestimate actual growth. 29 Since 2006, under pressure from the European Union, non-EU citizens are also eligible to enter council housing, albeit with a waiting time of 5 years before they can register.

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Figure 1: Tenure structure Vienna, 1991 - 2011

Source: Statistik Austria, GWZ 1991, 2001. For 2011: Statistik Austria Census 2011, p. 119. “Social rental” category includes rental units owned by non-profit provider or public authorities (Federal, province or city). “Others” category includes employer-provided housing and unknown legal basis. Only registered residences, vacant units or units without registration not included.

5.4. Analytical framework

The following section discusses two policy changes that have occurred since the mid-1990s in Vienna’s de-commodified housing stock, which have been sidelined by the dominant accounts that tend to emphasize policy continuity. As we show, despite overall stability, local and national governments have adapted policies in ways that market forces have been given greater influence in social rental housing as well as the private rental sector. This has reduced the level of de-commodification within the two sectors, i.e. the degree to which housing access is decoupled from private markets (cf. Esping-Andersen 1990), particularly since the mid-2000s.

Building on the policy analysis, the following section discusses the implications of the reforms for low-income households in Vienna. Their

17.4%   17.5%  19.0%  

32.7%  

33.1%   33.3%  

40.9%   43.0%   42.3%  

9.0%  6.4%   5.3%  0%  

5%  10%  15%  20%  25%  30%  35%  40%  45%  50%  

1991     2001     2011  

Owner-­‐occupied   Private  rental   Social  rental   Others  

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number has recently been on the rise. Income developments for poor and also middle-income households have only been moderate since the 2000s, not least due to a growing flexibilization and polarization of the city’s labor market. Additionally, Vienna has remained attractive for low-skilled, poor migrants in search for upward social mobility. The share of households considered at-risk-of poverty has grown from 12.7 percent in 2005 to 19.2 percent in 2011 (Statistik Austria 2007, 31; 2013, 10)30. This trend has intensified in the context of the financial crisis. In 2011, about 129,000 households received guaranteed minimum income benefits - an increase by 29 percent since 2009 (Kontrollamt der Stadt Wien 2012, p.2).

As Emmenegger (2012, 10) argues welfare state reforms often take the form of an increasing differentiation of available benefits between insiders and outsiders. He speaks of dualization, which he defines as “a process of welfare state adaption in which policies increasingly differentiate rights, entitlements, and services provided to different categories of recipients”. In this context “the position of insiders may remain more or less constant, while only the position of outsiders deteriorates. Alternatively, policies may lead to the creation of new categories of outsiders that were previously treated according to the same rules as insiders (Emmenegger ibid.).” We will show that the reforms in Vienna’s housing market have also initiated a dualization trend, creating a growing gap in housing conditions and rights between those inside the market and those newly trying to enter.

30 Within a 95 % confidence interval. In 2005, the interval ranges between 10.3 to 15.2 (Statistik Austria, 2007: 32), in 2011 between 15.9 to 22.5 (Statistik Austria, 2012: 10).

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5.5. Two policy pressures on Vienna’s de-commodified housing stock since the mid-1990s

5.5.1. The termination of the council housing program

Social rental housing in Vienna is a sector that cannot adequately be understood without further differentiation. It consists of two different sub-segments. About two-thirds of the units (roughly 230,000 in 2011) belong to the council housing segment, while the remaining third is non-profit social rental housing (roughly 134,000 in 2011). The former is provided and owned by the city, whereas the latter by non-profit associations supported through public (non repayable) grants and public loans. While in the 1920s, Vienna’s social rental housing program relied entirely on council housing, in the 1950s, alongside the implementation of the Austrian post-war housing model, non-profit associations have entered the arena. They gradually gained importance and between 1980 and 2001, 69 percent of all units came from non-profits, while 31 percent from the city. In recent years, the overall social rental sector has continued to grow, but, hidden under the surface of expansion, only non-profit social rental units have been added to the stock. Based on arguments about cost efficiency and growing local budget shortages, the city, in the mid-1990s, decided to fade out the council housing program and to fully rely on non-profit providers. Since 2004, with the only exception of attic conversions in existing council housing estates, the council housing sector is no longer expanding.

At first sight there is not much difference between the two sub-segments as regards the costs for tenants. Following from the non-profit law (‘Wohnungsgemeinnützigkeitsgesetz’), non-profits are obliged to charge only cost rents for the life-time of the building. Rents are generally at about the same level as in council housing. In 2011, the average rent for a new contract in both segments was 6.2 €/m2. Rent increases have recently been less stark in non-profit units compared to council housing. Between 2005 and 2011, they increased on average by 13.7 € in council housing, while only by 13.4 € in non-profit units (WIFO 2012, 76). Nonetheless, there is a crucial difference as regards the regulation of

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access to the two segments. In contrast to council housing, non-profit units require a down-payment by tenants. This consists of a share of the costs for construction, land and financing. The money is returned to tenants once they move out, deducted by a yearly 1 percent administration fee.

The down-payment requirements have become more relevant in recent years. The most important factor has been the rising land prices in the city. In 1995, Austria has joined the European Union and eight years later, also the eastern neighboring countries have become member states. This has entailed a comprehensive geopolitical repositioning and relocated the city from the fringes of a separated Europe – where it was located until 1989 – into the heart of an integrated European Union. In this context, Vienna has become more attractive as a place to live, but also as a place to invest. There has also been growing demand for luxury housing in the homeownership sector in the inner city, featuring exorbitant prices that reach between 17,000 up to 30,000 € /m2 (in comparison, the average m2 price in the city now is around 4,500 € /m2). Since the mid-2000s the financial crisis has furthermore intensified demand and established housing in Vienna as lucrative investment product, vis-à-vis more conventional products like funds and stocks, with small and large-scale investors increasingly entering the market (PWC & ULI 2013, 36). Together, these developments have pushed up not only property prices, but also land prices. Between 2000 and 2010, the average price for potential non-profit housing developments, according to Gutheil-Knopp-Kirchwald et al. (2012), rose from 575 to 961 € / m2. This excludes the most expensive inner city districts.

Next to rising land prices also new quality standards have driven down-payment requirements. Today the average payment to access a non-profit rental housing unit ranges between 450 and 550 € per m2 (Korab et al. 2010, 9). Taking the mean of 500 € as a basis, for a 50 m2 apartment, a household hence has to pay 25,000 € just to get in. The city has acknowledged the problem and provides demand-side support to cover the costs of market developments, for instance through low-interest loans up to 25,000 €. Additionally, in some units, extra funds lower down-payment requirements to 60 € per m2. While these programs have overall

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facilitated access, they have been unable to fully offset the fact that the option to live in social rental housing is increasingly dependent on the availability of financial capital (Korab et al. 2010; Amann & Mundt 2010). The shift from council housing to non-profit housing has entailed an internal upgrading process within the social rental sector.

5.5.2. The de-regulation of the private rental market

Private rental housing comprises roughly 280.000 units in Vienna (2011). The majority of the units, about two-thirds, were built before 1945 and fall under rent regulation. Rent regulation is a national law that was implemented as part of the post-war Keynesian welfare strategy. It technically applies nation-wide, but clearly has most relevance for Vienna’s housing market, where two-thirds of all regulated units nationwide are located.

Until the mid-1980s, rent regulation was based on a unit’s equipment standard, ranging from category A (highest standard, including heating and bathroom) to category D (lowest standard, no water inside the unit). The sector offered relatively strong protection for tenants and made it difficult to raise rents within existing contracts – exceeding the allowed regularly adaption to inflation rates – and nearly impossible to get tenants out against their will – at least by legal means. Strong tenant protection, however, also made private rental housing fairly unattractive for landlords.

Under pressure from the real estate lobby, the national rent act was liberalized in 1984, 1986 and, to its current form, in 1994. The reforms essentially entailed two main changes. First, the norm of unlimited rental contracts was replaced with the possibility for fixed-term contracts, with a minimum of three years. Second, category rent setting (‘Kategoriemietzins’) was replaced with the benchmark rent setting system (‘Richtwertmietzinssystem’). In the new system, a unit is compared to a fictive ‘standard home’ and premiums can be added if the unit is “better” than this home. The criteria for the comparison encompass apartment-related but also location-related aspects.

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Liberalization was accompanied by a local urban renewal program in Vienna that targeted the regulated stock. The program offered low-interest loans to private landlords in exchange for a cap on rents for a period of 10 years after renovation. Sitting tenants, also after that period, were protected from rent increases. With new contracts, however, landlords could raise rents. This possibility varied based on the time of renovation of the units. For units renovated before 1993 there were no limitations on rents anymore after the 10-year period. The others could be rented out based on the more flexible benchmark rent setting system (‘Richtwertmietzinssystem’).

While, as above-discussed, investment into Vienna’s housing market has generally increased, regulated private rental housing has been a particularly attractive product. Incentivized by rent liberalization and urban renewal subsidies, since the early 1990s, investors (in a growing share institutional rather than private ones) have discovered the sector. Between 1987 and 2005, every third building transaction in the city concerned a building with regulated rental units. While other buildings, on average, remained with the owner for a period between 10 to 15 years, regulated private rental buildings had a turnover time of less than 2 years. The gross annual return of purchase and sales (excluding renovation and other costs) exceeded, on average, 60 percent (SRZ & IFIP 2007, 3). In this context, sales prices have rocketed. Between 2001 and 2010, the price for 1 m2 of regulated private rental units rose by 153 percent, from 1.025 € to 2.598 € (corrected for inflation, Gutheil-Knopp-Kirchwald et al. 2012, 62). Since the mid-2000s, the financial crisis has once again intensified this trend. Regulated private rental housing was in particularly high demand among investors and in 2012, the transaction volume in the sector amounted to 928 € million – an increase by 14 percent compared to the prior year (Otto Immobilien Gruppe 2013)31.

In this context, the sector turned increasingly from low-quality, low-rent into a high-quality, high-priced sector (Bauer 2005), with rents sky-rocketing. While overall rent increases in the city amounted to 37 percent

31 Including only buildings constructed between 1848 and 1918 in “historicistic” style (see Otto Immobilien Gruppe, 2013 for exact definition).

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between 2001 and 2010, in regulated private rental units they rose by 67 percent (nominal prices; Tockner 2012). One mechanism for landlords to ask higher rents has been the de jure possibility offered by the new rent regulation to ask location bonuses. The bonuses are not legally set, but the city provides recommendations that are also legally binding in case of controversy between landlord and tenant. These recommendations are based on the estimated price for land. The city distinguishes seven location types, defining a maximum location bonus that can additionally be asked per m2 in the different categories (see Figure 2). As land prices in Vienna have soared in recent years, location bonuses did so as well. The most attractive locations thereby gained most, pushing up rents particularly in the most attractive locations.

Figure 2: Possible location bonus for regulated private rental market units in Vienna, 2014

Source: Adapted from Magistratsabteilung 25, Stadt Wien, 2014. In the 1st district, the city center, for example, where the location bonus is highest, landlords in 2014 can legally ask 8€ per m2 on top of the standard rent. This is 4€ more per m2 than in 2010. In the areas that fall

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in the second most attractive category as concerns land prices and hence location bonus, still, the possible location bonus has increased from 1.3€ to 3€ per m2 over the same period (See Figure 3).

Figure 3: Possible location bonus for regulated private rental market units in Vienna for different location types, 1994 – 2014

Source: Lagezuschlagsrechner der Stadt Wien Online 2014, own calculations.

A second mechanism for rent increases has been that landlords make use of the intransparent new rent setting system. Landlords are for instance not obliged to specify the extras that they ask on top of the standard rent. Additionally, they should, in principle, deduct 25 percent of the rent for a limited-term contract. Both rules have proven to be fairly ineffective for the protection of tenants. While hence, many units are de jure still regulated, de facto regulation has lost much of its effect for them. Data from 2011 show that on average regulated units were as expensive as unregulated ones (WIFO 2012, 81). A study from 2010 (Rosifka & Postler 2010, 35), based on a sample of 350 units in Vienna found that in 99 percent of the cases rents exceeded the rent regulation limit for the respective unit. On average they were 67 percent too high. The

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ineffectiveness of the new system has now been confirmed by other studies (WIFO 2013).

Housing allowances that the city provides since 2001 have helped to dampen rising housing costs (IIBW 2009), but have been unable to fully offset them (IFES, 2005). According to EU-SILC data, the share of households in the private rental market that devote more than 25 percent of their income on housing costs has risen from 39 to 45 percent between 2005 and 2011 (Statistik Austria 2006; 2012). One problem with the allowances is that for the calculation the rent for a standard apartment is applied, without extras. The location bonuses that have to be paid in more attractive locations are hence not compensated for by the allowances. As a result, the available inexpensive private rental dwellings, particularly in attractive locations, are getting increasingly rare.

5.6. Implications for the housing conditions of low-income households: The trend towards dualization

How have these reforms affected low-income households in their housing conditions? To start with, generally, poor households in Austria are comparatively well served in terms of housing. In 2008, housing cost burdens amounted to 21.2 percent, much lower than in other European countries (Czasny et al. 2008, 89). The proportion of households with rent arrears is relatively low (2.4 percent compared to 9.1 percent EU25-wide) and only 14 percent of Austrian households are confronted with heavy affordability burdens, while the EU25-wide average is twice as high (29 percent) (ibid. 67). Leaving the Austrian-wide context aside, a closer look at the situation in Vienna suggests that housing problems have recently grown. In 2009, 13 % of all households looking for a unit did so for financial reasons – up from 8 % in 2002 (SORA 2009). According to EU-SILC data, housing cost burdens in the city increased markedly between 2004 and 2012, as did the share of households with a cost burden that exceeds 25 percent of their income. Whereas in 2004, households on average devoted 16 percent of their income on housing, in

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2012 this had increased to 25 percent (see Figure 3). Eviction notices now have remained at a high of 20,500 for a few years, meaning that about 2.5 % of all households in Vienna are confronted with a potential threat to leave their apartment every year (even though not all of them eventually have to leave) (Bundesrechenzentrum 2011). Also homeless numbers have gone up to 6,797 people in 2010 that used a homeless shelter in the city at one point in the year – a number that grew by 45 % since 2006 (Magistratsabteilung 24 2012).

Figure 4: Housing cost burden, Vienna, 2004 - 2012

Source: Statistik Austria EU-SILC, several years. Includes housing costs for renters as well as owners. Based on equivalized household income. See Statistik Austria EU-SILC for definition. While these overall statistics indicate a trend towards greater housing problems, they add relatively little to an understanding of reforms effects. Essentially, the regulatory changes have led to a growing differentiation between low-income households as concerns available housing conditions and rights. Those who have lived in the city for longer have remained fairly well protected from market forces and have hardly been affected by the reforms. Many of them, for instance, live in council housing. They benefit from relatively low rents - the average rent in council housing is 6€ compared to 8€ in private rental units (2011)

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(WIFO 2012, 81) - and the possibility for rent increases are limited (only adaptable to inflation). Also, they have permanent rental contracts. Moreover, while income limits apply as regards access, households do not have to move out once their incomes rise. Finally, there are generous possibilities for tenants to hand over rental contracts within the family. Children, for instance, only have to have lived with their parents in the apartment for two years and then can directly take over the unit if their parents move out.

Next to the council housing sector, there are also many low-income households, who live well-protected from market forces in the private rental sector. They have old rental contracts, from prior the liberalization, which offer relatively low rents. They are also unlimited, as was the norm pre-1994. Like in council housing, also for private rental contracts there is a possibility that unlimited contracts can be handed over to relatives without agreeing on a new contract – and hence losing the low rent.

The situation is radically different for low-income households that entered the market more recently. First, the council housing sector is no longer expanding. The generous rights for tenants to stay in the sector also have led to low mobility rates. Those that are in the sector have a low propensity to move out again. Access to the sector is hence increasingly difficult. Waiting lists now comprise 29,700 households (in 2012) – a sharp increase, by 140 percent, since 2001, when 12.200 households were waiting for a unit (Kontrollamt der Stadt Wien 2012a, 39; Stadt Wien 2001). The average waiting time in 2012 amounts to 1.5 years, up from 1 year in 2001, with nowadays, however, 25 percent of all households waiting longer than three years (Kontrollamt der Stadt Wien 2012a, 46). Second, the still-growing non-profit social rental housing sector, for many low-income households, is no real alternative, or only under substantial financial cutbacks for non-housing related expenses, due to the permanently rising down-payment requirements. The private rental market, then, often remains the only viable option for those newly looking for an apartment. However, compared to tenants with older contracts, what the sector now offers differs considerably. With rent flexibilization new contracts are significantly more expensive. Additionally, while there are still unlimited contracts issued, their share is

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constantly decreasing. After this possibility was introduced in 1994, in 2001, already 15 percent of all private rental units had a limited-term contract. In 2011, the majority of new contracts (63 percent) were limited in time, either by three or five years (WIFO 2012). Importantly, tenants have no right for extension after this time has expired. With new contracts, however, rents are usually raised, creating what Bauer (2005) calls a ‘new lease effect’.

With the reforms in social rental housing and the private rental stock since the mid-1990s, the time of market entrance, hence, has become critical as regards available housing conditions and rights in Vienna’s de-commodified housing stock. If dualization decribes a process in which welfare reforms “increasingly differentiate rights, entitlements, and services provided to different categories of recipients” leading to a gap between market insiders and outsiders (Emmenegger 2012, 10), this seems to accurately describe the current trend on Vienna’s housing market. Low-income households, who have lived in the city for longer, either in council housing or the private rental market still benefit from the extensive regulations that date back to before the reforms (low rents, unlimited contracts), while low-income newcomers are increasingly exposed to greater market influence, following from the reforms. In the private rental market, tenants who newly rented a private rental dwelling in 2003 or 2004 on average paid 492€ on rent in the year 2005. In the same year, the rent for tenants who moved in 1995 was, on average, 60 percent lower (IFES 2005).

5.7. Concluding remarks: Re-commodifying housing in formerly ‘Red’ Vienna?

Compared to many other West European cities, Vienna has not only developed a very large de-commodified housing stock over the course of the 20th century. Embedded in a relatively stable Austrian housing policy context, the city’s housing model has also shown greater stability since the 1980s against wider re-commodification trends. However, as we have argued at the beginning of this paper, the emphasis on policy continuity

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has sidelined actual market-promoting policy changes that have occurred in the market in recent years. In doing so, also attention has been diverged from related housing problems that have arisen.

Against this background, the paper has focused on two policy changes at the national and local level since the mid-1990s. Both have not yet received ample attention in the literature. Firstly, Vienna has terminated the construction of council housing and since 2004, entirely relies on non-profit associations for the provision of social rental housing. This has triggered an internal upgrading process of the social rental sector. In contrast to council housing, non-profit housing requires a down-payment by tenants, consisting of a share of financing, construction and land costs. With the growing attractiveness of Vienna as a place to live and invest, land prices have soared, particularly since the mid-2000s, and accordingly also down-payment requirements have become higher. Despite the availability of demand-side subsidies this has increasingly coupled access to the social rental sector to the availability of financial capital and made access for low-income households more difficult than in the past.

Secondly, at the national level, the federal government has de-regulated the private rental sector, most importantly, by introducing limited-term contracts and a new rent setting system that also allows for asking higher rents for attractive locations. Investment in the sector has soared, particularly since the mid-2000s and rents have risen accordingly, especially in attractive locations. Housing allowances have dampened rising cost burdens, but have not fully offset higher costs. Importantly, allowances do not cover the location-related extras that are asked by landlords, meaning that especially in attractive locations the number of inexpensive units is increasingly reduced.

The second part of the paper has focused on the implications of the reforms on the housing conditions of low-income households. We have argued that policy changes have triggered a dualization trend and have made the time of market entrance crucial as concerns available housing conditions and rights. Low-income households who have lived in the city for longer have remained fairly well protected from market forces and

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have hardly been affected. They live in council housing, with relatively cheap rents and unlimited rental contracts, or similarly, possess an old, unlimited contract in the private rental stock. Low-income households who have come to the city more recently, however, are confronted with a radically different situation. Access to the council housing stock is getting more difficult, as the sector is no longer expanding and mobility is low. Equally difficult is the access to the non-profit sector, where down-payments are constantly rising. In the remaining private rental sector, however, low-income households have to rely on limited-term contracts and have to face a growing scarcity of inexpensive units, particularly in attractive locations where land price developments push up possible location bonuses and rents.

The specific contribution of this paper, then, has been to set a counterpoint to the dominant discourse about Vienna’s housing market as an example of continued de-commodification, providing insight into two concrete policy changes and their ramifications for the housing conditions of low-income households since the mid-1990s. In fact, our findings suggest that the retreat from council housing construction and the liberalization of the private rental market have put up significant pressure on de-commodified housing in the city, especially with soaring investment since the mid-2000s. This has undermined the housing conditions and rights particularly of low-income households that are newly trying to find a place to live in the city.

Quite importantly, this is not to argue that Vienna has been incorporated into broader re-commodification trends. Indeed, despite the sole reliance on non-profit associations today, social rental housing is still added to the market and constitutes the majority of newly constructed units. While access to the sector has become more difficult than in the past, it is also clear that social rental housing continues to exert dampening effects on rent levels in the city and, once one has gotten access, provides relatively inexpensive and stable housing conditions. In addition, there have also been no attempts to actively reduce the council housing stock, which continues to constitute a large de-commodified stock, accounting for one-quarter of all units. Likewise, rent regulation in the private rental stock, while severely curtailed in its protection for tenants, is still in place, and

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also this past policy has not fully been given up. It is, hence, certainly accurate to argue that Vienna has in many ways persisted seemingly pervasive shifts towards market housing provision. Nonetheless, we would argue that holding up Vienna as a case with remaining de-commodification policies should not diverge attention from the significant reforms that have occurred and have weakened tenant protection, making living in the city for poor households more difficult than in the past.

In that, our findings also do not contradict arguments that Vienna has maintained a somewhat special position among European urban housing markets (cf. Lawson 2010). In fact, given the recent pathways of other European cities with large regulated rental stocks, like Stockholm or Amsterdam, where there has been a radical retreat from supply-side interventions, social housing policies and profound attempts to reduce the sector through sale or demolition, it seems that much can be learned from Vienna for broader debates about re-commodification. While the durability of object-side subsidies and social rental housing programs suggest an alternative development path, however, our analysis indicates that also Vienna’s housing market has not remained entirely immune from re-commodification trends. This, not least, raises the question to what extent further reforms in Vienna may in fact only be a matter of time.

A crucial factor for the future ability of Vienna to maintain a large de-commodified housing sector to serve low-income households will be to what extent the city is able to find ways to tackle exactly the problems that have arisen from recent reforms, i.e. increasing down-payment requirements and soaring rents in the private rental stock. A growing amount of housing subsidies has recently been used for demand-side support to lower affordability burdens. Relevant expenditures effectively doubled between 2003 and 2009 (Kontrollamt der Stadt Wien 2009, 16). The city has already announced the need to cut back on supply-side subsidies in order to cover rising costs for allowance budgets. Resultantly, social rental housing construction has declined in recent years and the sector has slightly lost ground vis-à-vis homeownership (see also Figure 1 above). With growing market influence on the de-

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commodified stock, hence, there is apparently a danger that necessary demand-side support eats up supply-side budgets, prompting further liberalization. A return to council housing construction has not been discussed so far, but there are proposals on the table to introduce a separate zoning category for social rental housing at the local level to prevent speculation and thereby keep land prices low. Also, at the federal level, the social-democrats have initiated a debate about making rent regulation more restrictive again. Change to the system, however, is politically difficult, especially as concerns the federal rent regulation act, which requires a consensus with the Conservatives, who have so far shown little will for reforms. If no achievements are made, however, supply-side interventions are likely to lose further ground in the coming years. This will put the benefits of the city’s de-commodified housing sector under threat and will likely lead to greater housing problems and sharper socio-spatial polarization. In this case, the housing question may also become a challenge for the political survival of the social-democrats in Vienna, who have also in recent years eagerly continued to promote their concern with affordable housing in the city.

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Statistik Austria 2013. GWZ/HWZ data files, available at http://www.statistik.at/web_de/statistiken/wohnen_und_gebaeude/bestand_an_gebaeuden_und_wohnungen/index.html (accessed 19 November 2013).

Statistik Austria. Einkommen, Armut und Lebensbedingungen. Ergebnisse aus EU-SILC. 2004; 2005; 2006; 2007; 2008; 2009; 2010; 2011; 2012. Wien: Statistik Austria.

Statistik Austria 2012. Einkommen, Armut und Lebensbedingungen. Ergebnisse aus EU-SILC 2011 – Tabellenband. Wien: Statistik Austria.

Streimelweger, A. 2010. Wohnbauförderung in Österreich – eine Bestandsaufnahme, Wirtschaft und Gesellschaft, 36/4, pp. 543-561.

Tockner, Lukas 2012. Mietensteigerung in Österreich und Wien. Auswertungen aus dem Mikrozensus, AK Wien, available at http://media.arbeiterkammer.at/wien/PDF/mietensteigerungen_studie.pdf (accessed 10 July 2013).

Uitermark, J. & Bosker, T. 2014. Wither the “Undivided City”? An Assessment of State-Sponsored Gentrification in Amsterdam. Tijdschrift voor economische en sociale geografie, 105(2), pp. 221–230.

Watt, P. 2009. Housing stock transfers, regeneration and state-led gentrification in London, Urban Policy and Research, 27, pp. 229-242.

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WIFO 2012. Instrumente und Wirkungen der österreichischen Wohnungspolitik, Im Auftrag der Kammer für Arbeiter und Angestellte für Wien. Wien: WIFO Wien.

WIFO 2013. Die Mietpreisentwicklung in Österreich seit 2005, Presseinformation, available at http://www.wifo.ac.at/jart/prj3/wifo/main.jart?content-id=1298017551022&publikation_id=46897&detail-view=yes (accessed 19 November 2013).

   

     Chapter 6: Conclusion and discussion

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6. Conclusion and discussion

There is growing recognition how cities and urban development across Western societies have been affected by the rise of neo-liberalism and free market principles in policy-making in the context of a shift from a Fordist to a Post-Fordist regulatory regime since the mid-1970s. This book has set out to specifically contribute to a better understanding of the market-oriented transformation of urban housing markets within the course of wider neo-liberalization trends. Within this broader frame, the specific intention was twofold. Firstly, to move forward the debate about the effects of neo-liberal restructuring on the housing conditions of low-income households. Secondly, to contribute insights into the role of welfare and housing regulation contexts in shaping neo-liberal restructuring and its effects. Chapters 2 and 3 have quantitatively analyzed the effects of neo-liberal restructuring on low-income housing conditions in two cities in distinct welfare and housing system contexts, namely New York and Amsterdam, as examples of cities in a liberal and a social-democratic context. Chapter 4 has taken a comparative perspective. It put together New York and Amsterdam and added Tokyo as an example of a developmentalist, East-Asian welfare context. The paper compared neo-liberal restructuring since 1990 in these three particularly diverse cases. Chapter 5, finally, took on Vienna and examined the effects of neo-liberal restructuring on housing conditions of poor households in a city in a corporatist welfare and housing regulation context. In this final concluding chapter I do two things. First, I go back to the main research questions and draw together the key findings from the different chapters. Second, I lay out questions and suggestions for further research.

To recap, the two main research questions that guided the analysis were:

1) How has neo-liberal restructuring affected the housing conditions of low-income households in New York, Amsterdam and Vienna since 1990?

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2) What are the main differences between the three cases in terms of reform pathways and effects?

6.1. The effects of neo-liberal restructuring on the housing conditions of low-income households in New York, Amsterdam and Vienna

Most centrally, this research suggests that there is a relationship between the neo-liberal restructuring of urban housing markets and worsening housing conditions for low-income households. In other words, neo-liberal housing reforms seem to negatively affect low-income households in their housing conditions. The analysis specified this relationship. It revealed that in New York, Amsterdam and Vienna, housing reforms at different scales have pressured the de-commodified housing stock since the beginning of the 1990s. This has translated into rising rents in the rental market and the loss of inexpensive housing units that are easily accessible for households with limited financial resources. This has coincided, in all three cities, with only moderate income developments for low-income households on the demand side, creating problems for these households to find affordable housing.

Chapter 2 analyzed the New York case. As shown, already before the examined reforms, many poor New Yorker households were suffering from quite severe housing problems. In 1993, for instance, 22.5% of all households in the city paid more than 50% of their income on rent, with low-income households particularly affected. However, the analysis suggests that with the reforms since then, problems have become more pressing. New York’s housing market has always been dominated by private market provision, but over the course of the 20th century, a number of public programs, subsidy and rent control schemes were implemented at different governmental scales to curtail market influence. As shown, since the early 1990s, many of these programs have come under pressure from federal, state and local reforms. Supply-side subsidy programs have been reduced, including, most importantly for New York, the funding for project-based Section-8 and Mitchell-Lama rental units.

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Additionally, rent regulation has been relaxed, with the introduction of luxury de-control in the 1990s, and low-cost rental units in city ownership have been sold off. This has triggered a profound upward shift of New York’s rental market in terms of rent levels, with inexpensive units being subtracted from the market in large numbers, particularly since the city’s house price boom in the early 2000s. In the context of growing income inequality, and only slowly increasing incomes for the poor, this has, as shown, contributed to a worsening of housing affordability for renters in the city. There is a greater share of households with affordability or severe affordability problems, actual affordability burdens have increased, particularly for the poor, and the shortage of rental units that are affordable for low-income households has increased.

The starting point for neo-liberal reforms in Amsterdam in the early 1990s was quite different, as was discussed in Chapter 3. Embedded in the comprehensive Dutch welfare state, the city had developed a highly de-commodified housing market in the post-war period, with object-side subsidies, social rental housing provision and rent regulation as key policy pillars. In the early 1990s private market principles had a subordinate role in the city’s housing market and the large social rental stock played important parts in housing the city’s low-income households. While the Dutch post-war housing policy model has lasted longer compared to other European countries, since the early 1990s, the overall policy direction has shifted towards re-commodification. Since then, Amsterdam’s housing market has come under market pressure from national, local, and recently also the EU level. The virtual termination of object-side subsidies for the construction of rental housing, the privatization of non-profit associations and the continuation and extension of tax benefits for homeowners have been decisive policy shifts. It has been shown how the reforms have led to a profound restructuring of Amsterdam’s housing stock, with the homeownership sector de-facto tripling in size vis-à-vis a shrinking regulated rental stock. The supply of inexpensive units in the city has dropped and rent levels have soared. Despite only moderately increasing wages for low-income households in the city, this has, however, overall, not led to a decrease in housing affordability. In fact, housing cost burdens for poor households

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in Amsterdam have remained fairly stable, mostly because these households concentrate in the remaining social rental housing stock, supported by an extensive housing allowance scheme. However, access to the market for the poor has gotten increasingly difficult. The growing homeownership sector is overly expensive and hence out of reach for most low and even many middle-income households, while in the remaining social rental housing mobility is low, blocking entrance for newcomers. As a consequence, accessibility for poor market newcomers has deteriorated and finding affordable accommodation in the city has become more difficult than in the past.

Chapter 5 started with the observation that Vienna’s housing market was also highly de-commodified in the early 1990s, following from local and national interventions over the course of the 20th century. Overall, the city’s housing policy model has also shown great stability since the 1980s, embedded in a relatively stable national policy context. Nonetheless, as demonstrated, national and local reforms in the social rental stock and the regulated private rental market have put pressure on the de-commodified housing stock in the city since the early 1990s. The termination of the council housing program and the liberalization of the private rental market have been decisive policy shifts. Access to social rental housing has been coupled to the availability of a financial contribution of tenants to the financing, land and construction costs. In the private rental market, rents have markedly increased. As income for low-income households have largely stagnated in the city in recent years, this has led to growing affordability burdens. There are still many low-income households that rely on old rental contracts in both council housing and the regulated private rental market. For low-income newcomers, however, it has become increasingly more difficult to find affordable accommodation in the city. The results of the analysis indicate that with the reforms the time of market entrance has become critical as regards available housing conditions and rights with particularly newcomers facing a growing scarcity of inexpensive housing in Vienna.

The findings from the three cities are, hence, in line with the initial hypothesis of this book that assumed a relationship between neo-liberal reforms of urban housing markets and growing housing problems for

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low-income households. The fact that the study found evidence for this relationship in three cities in highly diverse welfare and housing system contexts lends further support to the conclusion. However, clearly, the results also point to important differences in the way how this relationship played out in cities embedded in different institutional contexts. I will discuss them now.

6.2. The main differences between the three cases

6.2.1. The differentiated impact on low-income households

While in New York, Amsterdam and Vienna constrained possibilities for low-income households to find affordable housing as a result from neo-liberal reforms are discernible, the analysis, and the comparison of the results across the three cities, suggests that the degree to which poor households have been negatively affected by the reforms differs importantly between the cases. As shown in Chapter 2, in New York, following from the reform-induced restructuring of the city’s rental market and concomitant rent increases, housing affordability deteriorated markedly. In fact, rocketing rent-income ratios as well as increasing shares of households with affordability burdens above 25 and 50 percent indicate that low-income New Yorkers have to pay a substantially higher share of their income for housing, compared to prior to the analyzed reforms in the early 1990s. Chapter 3 revealed that this was, against expectations, not the case in Amsterdam. In fact, in Amsterdam, similar to New York, the rental market was restructured and rent levels increased markedly. Additionally, also in Amsterdam, income developments for poor household were only moderate since the mid-1990s. However, the affordability analysis suggested that for low-income households in Amsterdam, despite this, rent-income ratios have remained fairly stable and overall, poor households do not have to devote a greater share of their income to housing. This indicates that in Amsterdam, in contrast to New York, once low-income households got access to the housing system, they are still fairly well served.

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Such a conclusion seems to lend support to the large body of literature that points to how poor people in European cities are better protected from macro-trends of neo-liberalization and re-commodification compared to their counterparts in US cities (Musterd & Ostendorf, 1998; Burgers & Musterd, 2002; Fainstein, 2010; Aalbers, 2011). This literature suggests that the more comprehensive European welfare state experiences processes of restructuring in a more moderate way and adapts in such a way that low-income households stay comparatively better protected. Indeed, the findings clearly indicate that poor households in Amsterdam have been negatively affected by the reforms and access to inexpensive housing has become more difficult than in the past. However, the analysis also suggests that given the still high protection in terms of affordability, there is an important difference in degree between Amsterdam and New York as concerns negative reform effects. In Chapter 3 on Amsterdam we have interpreted this as the result of institutional layering. Despite clearly discernible reforms in the city’s housing market, there are still a number of programs and structures in place, most importantly the still comprehensive social rental housing sector and the extensive housing allowance system to protect low-income households from greater market influence and rising housing cost burdens.

The analysis of the Vienna case seems to further support the thesis that reforms proceeded in a more moderate way in the European context. Indeed, we found that in Vienna, there are still a number of highly protective de-commodifying programs in place. They play important parts in shielding insiders to the system from greater market influence and rising rents. Crucial in this respect are the city’s council housing stock and the still considerable number of regulated private rental dwellings with old rental contracts. In both segments, market forces play a limited role and rents are regulated at a comparatively low level. For households in these segments, the reforms had little ramifications and they remained, overall, largely unaffected in terms of housing costs.

The analysis reveals, however, also an interesting difference to the Amsterdam case. The affordability developments in Amsterdam indicate that once low-income households have gotten access to the system they are still fairly well protected and do not have to devote a higher share of

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their income on housing than in the past. In Vienna, on the contrary, the time of market entrance seems to be more crucial. Newcomers to the system seem to be not as well served as older insiders. De-commodified housing is still newly provided, but newer contracts are decisively more expensive than older contracts. Accordingly, also, in Vienna, affordability ratios and the number of households with high affordability burdens has markedly increased over the course of the reforms.

If we were to rank the three cities, hence, according to how low-income market insiders are faring compared to prior the reforms, in New York, they have been most negatively affected, with affordability ratios rocketing. In Vienna, several protective programs are still in place and many low-income households benefit from relatively low housing costs, but market newcomers face growing difficulties to find inexpensive housing, compared to the past. In Amsterdam, finally, once poor households have gotten access, they are still fairly well protected from rising prices. Market outsiders, however, have increasing difficulties to enter this system.

Within the general trend that neo-liberal reforms negatively affect low-income households in their housing conditions, I have thus also found evidence of differentiated reform impacts. Most importantly, the results suggest more moderated impacts within the European context and differences in degree compared to the US city, in line with comparative literature on European cities. Moreover, the Vienna case also provides indicative results of further differentiation within Europe.

6.2.2. Different reform pathways

Next to differentiated reform impacts on low-income households I also found evidence for differentiated pathways of neo-liberal restructuring and ’variegation’ in the concrete progression of market-based reforms. Specifically, Chapter 4 set out to compare New York, Amsterdam and Tokyo and highlighted the role of welfare state and housing system contexts in shaping reform pathways.

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One striking difference that the contrasting of these three cases reveals is how key market-promoting policy changes strongly follow patterns of path-dependency. In New York, for instance, the focus of the reforms centered on the de-regulation of the private rental market. Historically, private rental housing has not only been the largest sector in the city, but also the sector, where, through various subsidy schemes and regulations, de-commodification was primarily achieved, next to the provision of a marginal social rental sector. Key policy shifts in New York have been the dismantling of federal and state subsidy programs for private rental housing, next to a weakening of rent regulation for the segment. In Amsterdam, by contrast, almost two-thirds of housing belonged to the social rental sector in the early 1990s. Since then, re-commodification strategies, above all, revolved around the reduction of this sector, next to profound efforts to promote the growth of homeownership. The re-constitution of social housing as a safety net and the termination of direct state funding for the provision of the sector have been central to neo-liberalization. They have been combined with roll-out programs for tenure conversion and extended tax incentives for homeowners. Private rental housing, until very recently, has not been part of marketization strategies in Amsterdam. Extending the comparison further to Vienna, based on the findings from Chapter 5, suggests further differences. Here, homeownership promotion has played a limited role and policies have retained a focus on rental housing provision. In Vienna, market-based restructuring has affected social rental and private rental sectors alike, with the termination of municipal housing construction and the de-regulation of the private rental market constituting key policy shifts.

Related to variegated policy shifts, Chapter 4 also revealed differentiated market and tenure transformations in New York and Amsterdam. In New York, overall, the tenure structure has remained largely stable, but pronounced losses have occurred to the regulated private rental stock, particularly in the context of the city’s house price boom since the early 2000s. Amsterdam, by contrast, has experienced large scale tenure shifts in the course of reforms, with the social rental housing sector declining from 58.5 % in 1995 to less than 48 % in 2009. This has been accompanied by a sheer explosion of the homeownership sector, which

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almost tripled, from 11.4 to 28.8 % over the same period. As the analysis of Vienna revealed, here, the tenure structure has, overall, remained stable, but the regulated private rental market as well as the social rental stock have experienced upgrading processes since the early 1990s, with housing in these two segments becoming rapidly more expensive.

These differences in key policy shifts and market transformations highlight how neo-liberalization trends, while discernible in all three cities are highly variegated. In that, next to the above-discussed differences in degree as regards reform impacts, the analysis also suggests important differences in kind between New York, Amsterdam and Vienna. The comparison of the cases points to the complexity and diversity of housing market reforms. Quite clearly, what constitutes neo-liberal restructuring and market-based reforms differs with the embeddedness in inherited institutional structures and policy regimes, reflecting patterns of path-dependency and institutional legacies. While dysfunctional effects of greater market influence on housing provision are, hence, discernible in the three cases, the findings also highlight how the underlying mechanisms differ strongly with welfare and housing systems and the embeddedness of cities within these institutional contexts.

6.3. Overall conclusion

Combining literature on the neo-liberal city, comparative housing research and comparative urban studies, this study has contributed to knowledge on the effects of neo-liberal restructuring of urban housing markets on the housing conditions of low-income households. Taking on three cases in three diverse welfare and housing system contexts, it has shown, how, in the context of a shift from a Fordist to a Post-Fordist regulatory regime and the concomitant rise in neo-liberal principles in housing policies at different scales, urban housing markets have been restructured since 1990. On this basis it provided evidence how policy shifts and market transformation had detrimental effects on housing conditions for poor households in terms of affordability and accessibility.

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Indeed, the analysis suggests that the gradual dismantling of de-commodified housing sectors has been a key driver of growing housing problems for the poor in New York, Amsterdam and Vienna since 1990. In all three cases, low-income housing conditions have worsened alongside the progression of neo-liberal reforms and related market transformations. The study has also highlighted, however, context-specific differences in the three cities. Specifically, first, it pointed to differences in degree and more moderate reform impacts on poor households in the European context. Second, it highlighted differences in kind as regards reform pathways, particularly as regards key policy shifts and market transformations, following from a differentiated embeddedness of cities in welfare and housing system contexts.

These findings have a number of analytical implications. First, they underline the importance of neo-liberalism and the proliferation of free market ideologies to understand the transformation of Western cities in the contemporary period. Indeed, the conclusion that we are currently witnessing in three highly diverse cities a restructuring of housing markets along the line of market principles that induces processes of housing cost problems and exclusion among poor households can be considered to support arguments about processes of convergence in current Western urban development. Within this broader argument, however, the analysis can also be considered as evidence for strong elements of divergence within broader neo-liberal urbanism and a claim that politics indeed matter (Musterd & Ostendorf, 1998; Fainstein, 2010). The reform experiences of New York, Amsterdam and Vienna clearly suggest that housing neo-liberalization is not an a-contextual process that plays out similarly across different cities (cf. Brenner et al. 2009). This may not come as a big surprise to many, but it seems to be an important correction to universal development assumptions that still play a dominant role in the literature on neo-liberal urbanism. Indeed, a central finding of this study is that disentangling the complexity of neo-liberal urbanism in concrete contexts requires careful empirical research. Welfare and housing system contexts, as the analysis suggests, should be a central focal point to understand processes of differentiation and divergence across cities.

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Without a doubt, by moving from policy changes to market transformations and housing outcomes in three different cities in a comparative manner this study has attempted an ambitious research task. I would argue, nonetheless, that the most useful contribution of the research lies exactly within its relatively broad scope and the fact that, from it, we have been able to draw conclusions about the relationship of policy changes and housing conditions and to offer comparative insight into three different regulatory contexts. Clearly, given this, there are several ways in which the analysis, in its current form, could be refined and extended. I discuss the most important ones now below.

6.4. Open questions and suggestions for further research

One way how the research could be refined concerns conceptual and methodological aspects of the analysis of reform effects in terms of housing conditions. First, as concerns conceptual aspects, the dimension of space could be given explicit consideration. The present analysis has been based on the concepts of affordability and access. It could be argued, however, that it does not only matter if and at what costs low-income households find housing in a city, but also where. Edward Soja (2010) has recently claimed for the adoption of the spatial dimension in questions of injustice, and a great deal of research on spatial segregation has for long been based on this claim of course. Research on state-led gentrification also suggests that neo-liberal restructuring of urban housing markets plays a key role in processes of spatial exclusion by inducing processes of displacement (van Gent, 2013; Uitermark & Boskers, 2014). From the perspective of an individual household it is clear that under conditions of rising rent levels, a household can decide to accept higher rent-income burdens, but can equally decide to trade in higher costs for a less attractive location.32 This suggests that the dismissal of the spatial dimension in the analysis of reform effects may in fact have led to

32 This does of course not always erase the higher costs. They may re-appear at other points, e.g. through higher commuting costs.

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underestimation of the degree of problems that neo-liberal restructuring has created for low-income households in the three cities. The analysis of Vienna in Chapter 5 suggests, clearly, that processes of spatial exclusion play a key role. Here, the de-regulation of the rental market has led to a scarcity of inexpensive units particularly in the most attractive locations in the city, potentially pushing out poor households to less attractive parts of the city. Considerations of the spatial dimension in the evaluation of reform effects could hence be one conceptual refinement.

Along similar lines, one could also argue that housing quality could be another conceptual way to refine the results under the premise that it also matters under what conditions a household lives in a city. Indeed, quality is another aspect how growing housing costs can be compensated for, when a household trades in living space or quality for rising costs.

Methodologically, a further refinement of the analysis of reform effects could include a qualitative perspective on housing conditions and choices. Clearly, the quantitative assessment based on survey data yields insightful results, but also has limitations specifically as concerns a deeper understanding of the experiences and strategies of households with limited financial resources to deal with a scarcity of inexpensive housing in a city. Especially under conceptual consideration of a broader set of choices of households, including housing costs, location and quality, qualitative research could be a useful further research route.

A second possible way to refine and extend the current analysis concerns the focus on low-income households. A strong case can be made that low-income households are in fact a highly differentiated group, including households at different stages in their life cycle, with varying structural choices and diverse preference structures at hand. Indeed, one can argue, as I have done here, that effectively, regardless of this diversity, the lack of financial resources makes all low-income households a group that is possibly affected by housing re-commodification processes, making it useful to look at them. Nonetheless, recent literature suggests that further differentiation may be illuminating in two ways. First, there has recently been growing attention specifically to young households in the context of housing neo-

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liberalization research, particularly in the UK context, but also beyond (cf. Forrest & Hirayama, 2009). This is based on the notion of a growing inter-generational gap that makes the housing question pertinent specifically for poor young households. In Amsterdam, research has recently begun to explore this issue also in the Dutch context (Boterman, et al. 2013). Second, there is growing attention to the rising share of poor migrant populations in globalizing Western cities like New York, Amsterdam and Vienna in recent years. In contrast to native households, many migrants have problems in accessing the formal housing sector, because they lack knowledge of the system, waiting time (often needed to get high on waiting lists), proper language skills or official documents, or become subject to discrimination. In this respect, a focus on how poor migrant households fare on the housing market under conditions of accelerating neo-liberalization pressures could be another useful route for further research.

A third possibility for refinement regards the element of housing policies. Indeed, in this study, from the very start, policies and policy changes have been taken as a given and the analysis has been limited to describing relevant policy shifts at different scalar levels in the three cases. What remains open in such an approach is the question how policies actually come into being, turning from housing policies to housing politics. Indeed, such a critique of descriptiveness applies to a lot of policy research in the housing studies field. There have, however, been attempts recently in the literature to pay greater attention to policy formulation processes, also with the help of more qualitative methodologies (see Bengtsson, 2012). For the present study, such an analysis would dig into, and try to understand the power struggles that enabled the implementation of policies to give market forces greater purchase in housing provision in the three housing markets. Also this could yield interesting new insights.

Finally, a fourth research route concerns the sole focus on policy as a driving force to understand the transformation of urban housing markets in the context of a shift from Fordism to Post-Fordism. Indeed, one can argue that next to the analyzed political changes also economic changes have occurred since the 1970s that have been of relevance. Specifically,

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there has been growing attention recently to how housing markets are increasingly interrelated with financial markets and also how, in this process, urban housing markets are increasingly integrated into international market circuits (Aalbers, 2008; see also the ERC REFCOM project). A focus on how the financialization of (urban) housing markets is impacting on the provision and type of housing that is available in cities could be a useful extension of the analytical framework, beyond neo-liberalization processes, in order to further the understanding why, and how, urban housing markets are currently changing.

References

Aalbers, M.B., 2008. The Financialization of Home and the Mortgage Market Crisis. Competition & Change 12 (2), pp.148–66.

Aalbers, M.B., 2011. The Revanchist Renewal of Yesterday’s City of Tomorrow. Antipode, 43(5), pp.1696–1724.

Bengtsson, B. 2012. Housing politics and political science. In D. Clapham, W. Clark, & K. Gibb (Eds.), The SAGE handbook of housing studies. (pp. 206-230). London: SAGE Publications Ltd. doi: http://dx.doi.org/10.4135/9781446247570.n12

Brenner, N., Peck, J. & Theodore, N., 2009. Variegated neoliberalization: geographies, modalities, pathways. Global Networks, 9999(9999).

Boterman, W., Hochstenbach, C., Ronald, R. & M. Sleurink, 2013. Duurzame toegankelijkheid van de Amsterdamse woningmarkt voor starters. Amsterdam Centre for Urban Studies: Amsterdam Centre for Urban Studies.

Burgers, Jack, and Sako Musterd. 2002. “Understanding Urban Inequality: A Model Based on Existing Theories and an Empirical Illustration.” International Journal of Urban and Regional Research 26:403-413.

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Fainstein, S., 2010. The Just City, Ithaca and London: Cornell University Press.

Van Gent, W.P.C. 2013. Neoliberalization, Housing Institutions and Variegated Gentrification: How the “Third Wave” Broke in Amsterdam. International Journal of Urban and Regional Research, 37(2), pp.503–522.

Forrest, R. & Hirayama, Y., 2009. The Uneven Impact of Neoliberalism on Housing Opportunities. International Journal of Urban and Regional Research, 33(4), pp.998–1013.

Musterd, S. & Ostendorf, W., 1998. Urban Segregation and the Welfare State: Inequality and Exclusion in Western Cities, New York: Routledge.

Soja, E.W., 2010. Seeking Spatial Justice, University of Minnesota Press.

Uitermark, J. & Bosker, T. 2014. Wither the “Undivided City”? An Assessment of State-Sponsored Gentrification in Amsterdam. Tijdschrift voor economische en sociale geografie, 105(2), pp. 221–230.

   

 

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Summary

1. Introduction

Questions about the transformation of cities under conditions of accelerating neo-liberalization have become an important and recurring topic in academic and political discussions about urban development. The contemporary proliferation of free market ideals as a guiding principle of policy making at different scales is considered to be central to understanding the changing social, political, economic and spatial order of cities in the 21st century. As a field of research, studies on the neo-liberal city acknowledge the institutional embeddedness of urban development in wider political-economic structures. The regulatory changes from a Fordist to a Post-Fordist regime since the 1970s and the concomitant dominance of market principles in policy-making are assumed to be a decisive institutional shift in this respect. Within this broader frame, the present study aims to contribute specifically to a better understanding of the market-oriented transformation of urban housing markets. The starting point is the notion that housing markets in many cities, particularly in Western Europe, were shaped in important ways by the Fordist regulatory regime that dominated the period of the 1950s and 60s. Embedded within the shift towards Post-Fordism and the rising dominance of free market principles since the 1970s, however, also urban housing markets have become subject to restructuring.

The book consists of four separate studies that deal with the academic and political debate about the neo-liberal restructuring of urban housing markets. Bringing together literature on the neo-liberal city, comparative housing research and comparative urban studies the specific intention is twofold. First, to move forward the debate about the effects of neo-liberal restructuring on the housing conditions of low-income households. Second, to contribute insights into the role of welfare and housing regulation contexts in shaping neo-liberal restructuring and its effects.

Chapters 2 and 3 quantitatively analyze the effects of neo-liberal restructuring on low-income housing conditions in two cities in distinct welfare and housing system contexts since 1990, namely New York and

SUMMARY 198

Amsterdam, as examples of cities in a liberal and a social-democratic context. Chapter 4 takes a comparative perspective. It puts together New York and Amsterdam and adds Tokyo as an example of a developmentalist, East-Asian welfare context to analyze neo-liberal restructuring since 1990. Chapter 5, finally, takes on Vienna and examines the effects of neo-liberal reforms on the housing conditions of poor households in a city in a corporatist welfare and housing regulation context over the last two decades.

Methodologically, the book combines literature and document analysis and quantitative survey analysis. First, secondary literature and key policy documents are examined in order to identify relevant market-based regulatory changes at different governmental scales that impacted on the analyzed urban housing markets. Second, survey data is used to assess the impact of reforms on market structures and housing conditions. For New York, the study draws on the Housing and Vacancy Survey, a triennial survey that provides micro-data on the individual household level and includes relevant housing and tenant-related variables. For Amsterdam, the Wonen in Amsterdam survey (WiA) is used, a biennial survey that also provides individual micro-level data. The analysis of Vienna draws on a number of sources, including national census and EU-SILC data. Conceptually, for the analysis of housing conditions, the study is based on the concepts of housing affordability and accessibility.

2. The effects of neo-liberal restructuring on the housing conditions of low-income households in New York, Amsterdam and Vienna

The analysis of New York, Amsterdam and Vienna in Chapters 2,3 and 5, most centrally, suggests that there is a relationship between the neo-liberal restructuring of urban housing markets and deteriorating housing conditions for low-income households. It finds that in three cities in highly diverse welfare and housing regulation contexts, housing reforms at different scales have pressured the de-commodified housing stock since the beginning of the 1990s. This has translated into rising rents and the loss of inexpensive units that are easily accessible for households with limited financial resources. Income developments, meanwhile, have only

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been moderate for low-income households in the three cities, creating problems for these households to find affordable housing.

In New York, as shown in Chapter 2, already before the examined reforms, many poor households were suffering from quite severe housing problems. The analysis suggests, however, that with the reforms the problems have become more pressing. While New York’s housing market has always been dominated by private market provision, over the course of the 20th century, a number of programs have been implemented to curtail market influence. Since the 1990s, however, several of these programs have been reduced, relevant subsidies have been cut back and regulations have been relaxed. As shown, this has triggered a profound upward shift of the city’s rental market, with inexpensive units being subtracted from the market in large numbers, particularly since the house price boom in the early 2000s. In the context of moderate income developments for the poor, this, as shown, has contributed to a growing shortage of rental units that are affordable for the poor, translating into greater shares of households with severe affordability problems and a rise in actual affordability burdens, particularly for the poor.

The starting point for neo-liberal reforms in Amsterdam in the early 1990s was quite different, as discussed in Chapter 3. Embedded in the comprehensive Dutch welfare state, the city had developed a highly de-commmodified housing market in the post-war period, with a large social rental stock and a subordinate role for private market provision. As shown, since the 1990s, however, Amsterdam’s housing market has come under market pressure from national, local, and recently also the EU level. The reforms have led to a profound restructuring of the housing stock, with the homeownership sector tripling in size vis-à-vis a shrinking regulated rental stock, accompanied by rising house prices and rent levels. Despite only moderately increasing incomes for low-income households, this has not translated into deteriorating affordability, mainly thanks to the remaining social rental stock and an extensive allowance scheme, on which poor households can draw. However, access to the market for poor households has gotten increasingly difficult, with the growing homeownership sector being overly expensive and hence out of

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reach for many. Meanwhile, in the social rental stock mobility is low, blocking entrance for newcomers.

Chapter 5 demonstrates how also in Vienna, neo-liberal reforms have led to deteriorating housing conditions for poor households. While Vienna has also developed a highly de-commodified housing market over the course of the 20th century and the city’s policy model has in fact shown great stability since the 1980s, changes in the provision of social rental housing and the deregulation of the private rental market have put up pressure on the de-commodified housing stock in the city. In this context, access to social rental housing is increasingly coupled to the availability of a financial contribution of tenants, while in the regulated private rental market rents have soared, making access more difficult than in the past. Quite importantly, as the analysis shows, there are still many low-income households that possess an old rental contracts in the de-commodified stock and have hardly been affected by the implemented reforms. For low-income newcomers, however, finding affordable housing has become increasingly difficult. The analysis suggests that with the reforms the time of market entrance has become critical as regards available housing conditions and rights, with particularly newcomers facing a growing scarcity of inexpensive housing in the city.

3. The main differences between the three cases

3.1. The differentiated impact on low-income households

While in New York, Amsterdam and Vienna constrained possibilities for low-income households to find affordable housing as a result from neo-liberal reforms are discernible, the analysis, and the comparison of the results across the three cities in Chapters 2,3 and 5, suggests that the degree to which poor households have been negatively affected by the reforms differs importantly between the cases. In New York, following from the reform-induced restructuring of the city’s rental market and concomitant rent increases, housing affordability deteriorated markedly, with rocketing rent-income ratios as well as increasing shares of households with affordability burdens above 25 and 50 percent. Chapter 3 revealed that this was, against expectations, not the case in Amsterdam.

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In fact, here, similar to New York, the rental market was restructured and rent levels increased markedly. Additionally, also in Amsterdam, income developments for poor household were only moderate since the mid-1990s. However, the affordability analysis suggests that, despite this, rent-income ratios have remained fairly stable and overall, poor households do not have to devote a greater share of their income to housing. This indicates that in Amsterdam, in contrast to New York, once low-income households got access to the housing system, they are still fairly well served.

In line with comparative literature on European and US cities, this finding suggests that in the European context processes of restructuring proceed more moderately and in such a way that low-income households stay comparatively better protected (Musterd & Ostendorf, 1998; Burgers & Musterd, 2002). Indeed, also in Amsterdam, poor households have been negatively affected and access to inexpensive housing has become more difficult. However, given the still high protection in terms of affordability, there is an important difference in degree between Amsterdam and New York as concerns negative reform effects.

The analysis of Vienna seems to support the thesis that reforms proceeded in a more moderate way in the European context. Indeed, as shown, there are still a number of highly protective de-commodifying programs in place, which play important parts in shielding insiders to the system from greater market influence and rising rents. The analysis, however, also reveals an interesting difference to Amsterdam. In Vienna, the time of market entrance seems to be more crucial as regards available housing conditions and rights for market insiders. While many older entrants can still rely on contracts with comparably low rents, newcomers have to face decisively higher costs.

If we were to rank the three cities, hence, according to how low-income market insiders are faring compared to prior the reforms, in New York, they have been most negatively affected, with affordability ratios rocketing. In Vienna, several protective programs are still in place and many low-income households benefit from relatively low housing costs, but market newcomers face growing difficulties to find inexpensive

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housing, compared to the past. In Amsterdam, finally, once poor households have gotten access, they are still fairly well protected from rising prices. Market outsiders, however, have increasing difficulties to enter this system.

Within the general trend that neo-liberal reforms negatively affect low-income households in their housing conditions, the study hence also finds evidence of differentiated reform impacts, suggesting more moderated impacts within the European context and differences in degree compared to the US city, in line with comparative literature on European cities. Moreover, the Vienna case also provides indicative results of further differentiation within Europe.

3.2. Different reform pathways

Next to differentiated reform impacts on low-income households, the analysis also provides evidence for differentiated pathways of neo-liberal restructuring and ‘variegation’ in the concrete progression of market-based reforms. Specifically, Chapter 4 compares New York, Amsterdam and Tokyo and highlights the role of welfare and housing system contexts in shaping reform pathways.

One striking result of this analysis is how key market-promoting policy changes strongly follow patterns of path-dependency. In New York, for instance, reforms since 1990 above all centered on the de-regulation of the private rental market, which had not only been the largest sector prior to the reforms, but also the sector where de-commodification programs had primarily been implemented in the past. In Amsterdam, by contrast, the social rental sector, which accounted for almost two-thirds of all units in the early 1990s, historically fulfilled the primary de-commodifying role. Re-commodification strategies have also revolved around the reduction of this sector, next to profound efforts to promote the growth of homeownership. Private rental housing, until very recently, has not been part of marketization strategies. Extending the comparison further to Vienna, based on the findings from Chapter 5, suggests further differences. Here, homeownership promotion has played a limited role

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and policies have retained a focus on rental housing provision. In Vienna, market-based restructuring has affected social rental and private rental sectors alike, with the termination of municipal housing construction and the de-regulation of the private rental market constituting key policy shifts.

Related to variegated policy shifts, Chapter 5 also reveals differentiated market and tenure transformations in New York and Amsterdam. While in New York, the tenure structure has remained largely stable, with, however, pronounced losses of regulated units within the private rental stock, Amsterdam has experienced large scale tenure shifts, with the social rental housing sector declining from 58.5 percent in 1995 to less than 48 percent in 2009 and the homeownership sector de-facto tripling in size. In Vienna, the tenure structure has overall remained stable, but private rental as well as the social rental stock have experienced upgrading processes since the early 1990s, with housing in these sectors becoming rapidly more expensive.

While neo-liberalization trends are hence discernible in all the analyzed cases, the study also highlights variegated pathways and differences in key policy shifts and market transformations. Next to differences in degree as regards reform impacts, the analysis also suggests important differences in kind between New York, Amsterdam and Vienna. The comparison points to the complexity and diversity of reforms. Quite clearly, what constitutes neo-liberal restructuring differs with the embeddedness in inherited institutional structures and policy regimes, reflecting patterns of path-dependency and institutional legacies. While dysfunctional effects of greater market influence on housing provision are, hence, discernible in the three cases, the findings also highlight how the underlying mechanisms differ strongly with welfare and housing systems and the embeddedness of cities within these institutional contexts.

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4. Overall conclusion

Combining literature on the neo-liberal city, comparative housing research and comparative urban studies, this study has contributed to knowledge on the effects of neo-liberal restructuring of urban housing markets on the housing conditions of low-income households. Taking on three cases in three diverse welfare and housing system contexts, it has shown, how, in the context of a shift from a Fordist to a Post-Fordist regulatory regime and the concomitant rise in neo-liberal principles in housing policies at different scales, urban housing markets have been restructured since 1990. On this basis it provided evidence how policy shifts and market transformation had detrimental effects on housing conditions for poor households in terms of affordability and accessibility. Indeed, the analysis suggests that the gradual dismantling of de-commodified housing sectors has been a key driver of growing housing problems for the poor in New York, Amsterdam and Vienna since 1990. In all three cases, low-income housing conditions have deteriorated alongside the progression of neo-liberal reforms and related market transformations. The study has also highlighted, however, context-specific differences in the three cities. Specifically, first, it pointed to differences in degree and more moderate reform impacts on poor households in the European context. Second, it highlighted differences in kind as regards reform pathways, particularly as regards key policy shifts and market transformations, following from a differentiated embeddedness of cities in welfare and housing system contexts.

These findings have a number of analytical implications. First, they underline the importance of neo-liberalism and the proliferation of free market ideologies to understand the transformation of Western cities in the contemporary period. Indeed, the conclusion that we are currently witnessing in three highly diverse cities a restructuring of housing markets along the line of market principles that induces processes of housing cost problems and exclusion among poor households can be considered to support arguments about processes of convergence in current Western urban development. Within this broader argument, however, the analysis can also be considered as evidence for strong elements of divergence within broader neo-liberal urbanism and a claim

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that politics indeed matter (Musterd & Ostendorf, 1998; Fainstein, 2010). The reform experiences of New York, Amsterdam and Vienna clearly suggest that housing neo-liberalization is not an a-contextual process that plays out similarly across different cities (cf. Brenner et al. 2009). This may not come as a big surprise to many, but it seems to be an important correction to universal development assumptions that still play a dominant role in the literature on neo-liberal urbanism. Indeed, a central finding of this study is that disentangling the complexity of neo-liberal urbanism in concrete contexts requires careful empirical research. Welfare and housing system contexts, as the analysis suggests, should be a central focal point to understand processes of differentiation and divergence across cities.

Without a doubt, by moving from policy changes to market transformations and housing outcomes in three different cities in a comparative manner this study has attempted an ambitious research task. I would argue, nonetheless, that the most useful contribution of the research lies exactly within its relatively broad scope and the fact that, from it, we have been able to draw conclusions about the relationship of policy changes and housing conditions and to offer comparative insight into three different regulatory contexts. Clearly, given this, there are several ways in which the analysis, in its current form, could be refined and extended. I discuss the most important ones now below.

5. Open questions and suggestions for further research

Essentially, I suggest four fruitful routes for further research. First, there are conceptual and methodological aspects in which the analysis of reform effects in terms of housing conditions could be refined. On one side, as concerns conceptual aspects, the dimension of space could be given explicit consideration. The present analysis has been based on the concepts of affordability and access. It could be argued, however, that it does not only matter if and at what costs low-income households find housing in a city, but also where. As research on state-led gentrification

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suggests, neo-liberal restructuring may also induce processes of spatial exclusion through displacement (van Gent, 2013; Uitermark & Boskers, 2014). The dismissal of the spatial dimension in the analysis may, hence, have led to the underestimation of the degree of problems that neo-liberal restructuring has created for poor households in the three cities. Consideration of this dimension could be a useful conceptual refinement. On the other side, methodologically, it is clear that a qualitative perspective on housing conditions could enrich the analysis. Clearly, the quantitative assessment based on survey data yields insightful results, but also has limitations specifically as concerns a deeper understanding of the experiences and strategies of households with limited financial resources to deal with a scarcity of inexpensive housing in a city. This is a second way how the analysis of reform effects could be refined.

A second possible way to refine and extend the current analysis concerns the focus on low-income households. A strong case can be made that low-income households are in fact a highly differentiated group, including households at different stages in their life cycle, with varying structural choices and diverse preference structures at hand. Indeed, one can argue, as I have done here, that effectively, regardless of this diversity, the lack of financial resources makes all low-income households a group that is possibly affected by housing re-commodification processes, making it useful to look at them. Nonetheless, recent literature suggests that further differentiation may be illuminating in two ways. First, there has recently been growing attention specifically to young households in the context of housing neo-liberalization research, particularly in the UK context, but also beyond (Forrest & Hirayama, 2009). This is based on the notion of a growing inter-generational gap that makes the housing question pertinent specifically for poor young households. Second, there is growing attention to the rising share of poor migrant populations in globalizing Western cities like New York, Amsterdam and Vienna in recent years. In contrast to native households, many migrants have problems in accessing the formal housing sector, because they lack knowledge of the system, waiting time (often need to get high on waiting lists), proper language skills or official documents, or become subject to discrimination. In this

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respect, a focus on how poor migrant households fare on the housing market under conditions of accelerating neo-liberalization pressures could be another useful route for further research.

A third possibility for refinement regards the element of housing policies. Indeed, in this study, from the very start, policies and policy changes have been taken as a given and the analysis has been limited to describing relevant policy shifts at different scalar levels in the three cases. What remains open in such an approach is the question how policies actually come into being, turning from housing policies to housing politics. Indeed, such a critique of descriptiveness applies to a lot of policy research in the housing studies field. There have, however, been attempts recently in the literature to pay greater attention to policy formulation processes, also with the help of more qualitative methodologies (see Bengtsson, 2012). For the present study, such an analysis would dig into, and try to understand the power struggles that enabled the implementation of policies to give market forces greater purchase in housing provision in the three housing markets. Also this could yield interesting new insights.

Finally, a fourth research route concerns the sole focus on policy as a driving force to understand the transformation of urban housing markets in the context of a shift from Fordism to Post-Fordism. Indeed, one can argue that next to the analyzed political changes also economic changes have occurred since the 1970s that have been of relevance. Specifically, there has been growing attention recently to how housing markets are increasingly interrelated with financial markets and also how, in this process, urban housing markets are increasingly integrated into international market circuits (Aalbers, 2008). A focus on how the financialization of (urban) housing markets is impacting on the provision and type of housing that is available in cities could be a useful extension of the analytical framework, beyond neo-liberalization processes, in order to further the understanding why, and how, urban housing markets are currently changing.

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References

Aalbers, M.B., 2008. The Financialization of Home and the Mortgage Market Crisis. Competition & Change 12 (2), pp.148–66.

Bengtsson, B. 2012. Housing politics and political science. In D. Clapham, W. Clark, & K. Gibb (Eds.), The SAGE handbook of housing studies. (pp. 206-230). London: SAGE Publications Ltd. doi: http://dx.doi.org/10.4135/9781446247570.n12

Brenner, N., Peck, J. & Theodore, N., 2009. Variegated neoliberalization: geographies, modalities, pathways. Global Networks, 9999(9999).

Burgers, Jack, and Sako Musterd. 2002. “Understanding Urban Inequality: A Model Based on Existing Theories and an Empirical Illustration.” International Journal of Urban and Regional Research 26:403-413.

Fainstein, S., 2010. The Just City, Ithaca and London: Cornell University Press.

Van Gent, W.P.C. 2013. Neoliberalization, Housing Institutions and Variegated Gentrification: How the “Third Wave” Broke in Amsterdam. International Journal of Urban and Regional Research, 37(2), pp.503–522.

Forrest, R. & Hirayama, Y., 2009. The Uneven Impact of Neoliberalism on Housing Opportunities. International Journal of Urban and Regional Research, 33(4), pp.998–1013.

Musterd, S. & Ostendorf, W., 1998. Urban Segregation and the Welfare State: Inequality and Exclusion in Western Cities, New York: Routledge.

Uitermark, J. & Bosker, T. 2014. Wither the “Undivided City”? An Assessment of State-Sponsored Gentrification in Amsterdam. Tijdschrift voor economische en sociale geografie, 105(2), pp. 221–230.

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Samenvatting

1. Introductie

In recente academische en politieke debatten over stedelijke ontwikkeling staat de invloed van het uitdijende neoliberalisme steeds meer centraal. Vrije markt idealen zijn vaker het leidend principe bij de hedendaagse beleidsvorming op verschillende niveaus. Inzicht in deze relatie is daarom cruciaal voor een goed begrip van de veranderende sociale, politieke, economische en ruimtelijke orde van steden in de 21e eeuw. Onderzoek naar de neoliberale stad dient de institutionele inbedding van stedelijke ontwikkeling in bredere dynamische politiek-economische structuren te onderkennen. De verandering in regelgeving die gepaard ging met de verschuiving van Fordistische naar post-Fordistische regimes sinds de jaren zeventig en de gelijktijdige groeiende dominantie van marktprincipes in beleidsvorming worden verondersteld een cruciale institutionele verschuiving te zijn.

Binnen dit bredere kader beoogt het onderhavige onderzoek bij te dragen aan een beter begrip van de marktgeoriënteerde transformatie van stedelijke woningmarkten. Het uitgangspunt is het idee dat de woningmarkt in veel steden - hier is de aandacht vooral op West Europa gericht - in belangrijke mate is vormgegeven door op Fordisme gestoelde regelgeving; deze was dominant in de jaren vijftig en zestig van de vorige eeuw. Echter, met de verschuiving naar het post-Fordisme zijn de stedelijke woningmarkten vanaf de jaren zeventig geconfronteerd met een herstructurering van neoliberale signatuur en derhalve met een toenemende dominantie van vrije markt principes.

Dit boek bestaat uit vier afzonderlijke, maar aan elkaar gerelateerde, studies over het academische en politieke debat met betrekking tot de neoliberale herstructurering van de stedelijke woningmarkten. Het doel van het bijeenbrengen van literatuur over de neoliberale stad, van vergelijkend woononderzoek en van vergelijkend stedenonderzoek (urban studies) is tweeledig. Het eerste is bij te dragen aan het debat over de gevolgen van neoliberale herstructurering voor de woon en

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huisvestingsomstandigheden van huishoudens met lage inkomens. Het tweede doel is bij te dragen aan de kennis over de rol van de context van regelgeving op het gebied van welvaart, welzijn en huisvesting bij het vormgeven aan de neoliberale herstructurering en inzicht te bieden in de effecten ervan.

Hoofdstuk 2 en 3 zijn gebaseerd op kwantitatieve analyses van de effecten van neoliberale herstructurering op de woon en huisvestingsomstandigheden in twee verschillende verzorgingsstaat- en woningmarkt systemen. De focus is op ontwikkelingen vanaf de jaren negentig. New York en Amsterdam zijn als voorbeeld-cases gebruikt van steden in een liberale, respectievelijk sociaaldemocratische context. In hoofdstuk 4 staat het vergelijkend perspectief in de analyse van neoliberale herstructurering sinds 1990 centraal. New York en Amsterdam worden met elkaar vergeleken en tevens met Tokyo, een voorbeeld van een Oost Aziatische ontwikkelingscontext. Tenslotte wordt in hoofdstuk 5 de stad Wenen behandeld om inzicht te krijgen in de effecten van neoliberale hervorming op de woonomstandigheden van huishoudens met lage inkomens, specifiek in een corporatistische context.

In methodologisch opzicht worden in dit boek literatuur en documentanalyse gecombineerd met kwantitatieve analyses die gebaseerd zijn op enquêtemateriaal. Als eerste zijn secondaire literatuur en belangrijke beleidsdocumenten onderzocht en geanalyseerd om markt gebaseerde veranderingen in regelgeving met een impact op de stedelijke woningmarkt op verschillende beleidsniveaus te identificeren. Vervolgens zijn enquêtegegevens gebruikt om de invloed van de hervormingen op de marktstructuur en de woon en huisvestingsomstandigheden te beoordelen. Voor de situatie in New York is gebruik gemaakt van de Housing and Vacancy Survey (Huisvesting en Leegstand Enquête); dit betreft een driejaarlijkse enquête die micro-gegevens op het niveau van individuele huishoudens biedt en relevante woon en huurdersvariabelen bevat. Voor Amsterdam is de tweejaarlijkse Wonen in Amsterdam (WiA) enquête gebruikt; deze bevat eveneens individuele micro-data. De analyse van Wenen is onder andere gebaseerd op de nationale volkstelling en op gegevens van EU-SILC (European Union Statistics on Income and Living Conditions). Voor de analyse van

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de woon en huisvestingsomstandigheden zijn de concepten van betaalbaarheid en toegankelijkheid van het wonen, vooral voor huishoudens met lage inkomens, leidend geweest.

2. De effecten van neoliberale herstructurering op de woon en huisvestingsomstandigheden van huishoudens met lage inkomens in New York, Amsterdam en Wenen

De analyse van New York, Amsterdam en Wenen in de hoofdstukken 2, 3 en 5 laten zien dat er een relatie bestaat tussen neoliberale herstructurering van stedelijke woningmarkten en verslechterende woon en huisvestingsomstandigheden voor huishoudens met een laag inkomen. In de drie steden - met uiteenlopende verzorgings- en woningmarktregulering - hebben woningmarkthervormingen op verschillende beleidsniveaus druk gezet op de decommodificatie van de woningvoorraad. Dit heeft zich vertaald in hogere huurprijzen en het verlies van goedkope woningen die toegankelijk zijn voor huishoudens met beperkte financiële middelen. Ondertussen is de inkomensstijging voor huishoudens met lage inkomens in deze drie steden matig geweest, wat problemen creëert voor deze huishoudens wat betreft het vinden van betaalbare huisvesting.

In New York hadden veel huishoudens met lage inkomens al vóór de onderzochte hervormingen te lijden onder ernstige woonproblemen, zoals is aangetoond in hoofdstuk 2. De analyse suggereert echter dat deze problemen nijpender zijn geworden met de hervormingen. Hoewel de woningmarkt in New York altijd gedomineerd is geweest door particuliere spelers, heeft een aantal programma’s in de twintigste eeuw getracht de marktinvloed te beperken. Sinds de jaren negentig is een aantal van de programma’s echter weer gekort, is er bezuinigd op relevante subsidies en zijn verordeningen en regels versoepeld. Deze studie toont aan dat dit tot een sterke verschuiving naar het hogere segment van de huurmarkt in de stad heeft geleid, waarbij goedkope woningen in grote getalen van de markt zijn afgehaald; deze herstructurering was vooral ingrijpend vanaf de vastgoedhausse in de eerste jaren van 2000. In de context van een matige inkomensstijging voor huishoudens met lage inkomens heeft dit geleid tot een groeiend

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tekort aan betaalbare huurwoningen voor deze groep; het aantal huishoudens met ernstige betaalbaarheidsproblemen nam daardoor toe, terwijl de daadwerkelijke woonlasten stegen, vooral voor deze huishoudens met lage inkomens.

Het beginpunt van de neoliberale hervormingen in Amsterdam in begin jaren negentig was heel anders, zoals besproken is in hoofdstuk 3. Door sterke inbedding in de uitgebreide Nederlandse verzorgingsstaat werd de naoorlogse gedecommodificeerde woningmarkt in Amsterdam gekenmerkt door een grote voorraad sociale huur woningen en een ondergeschikte rol van de particuliere markt. Echter, ook de Amsterdamse woningmarkt is vanaf de jaren negentig onder druk komen te staan van de markt via beleid op nationaal, lokaal en recentelijk ook EU niveau. De hervormingen hebben geleid tot een ingrijpende herstructurering van de woningvoorraad, waarbij de koopsector verdriedubbelde terwijl de huurvoorraad kromp. Dit ging vergezeld met stijgende huizenprijzen en huurniveaus. Opvallend is echter dat deze ontwikkelingen niet hebben geleid tot een verslechterde betaalbaarheid, zelfs ondanks de gematigde inkomensstijging van huishoudens met lage inkomens. Dit is voornamelijk te danken aan de overblijvende sociale huur voorraad en aan een uitgebreide uitkeringsregeling waar huishoudens met lage inkomens gebruik van kunnen maken. Echter, toegang tot de woningmarkt voor huishoudens met lage inkomens is steeds moeilijker geworden. De groeiende koopsector bestaat uit woningen die veel te duur zijn en daardoor onbereikbaar zijn voor huishoudens met lage inkomens. Tegelijkertijd is de mobiliteit in de sociale huurmarkt laag; ook dat bemoeilijkt de toegang voor nieuwkomers met een bescheiden inkomen.

Hoofdstuk 5 laat zien dat neoliberale hervormingen ook in Wenen hebben geleid tot verslechterde woonomstandigheden voor huishoudens met lage inkomens. Hoewel Wenen in de loop van de 20e eeuw ook een sterk gedecommodificeerde woningmarkt heeft ontwikkeld met een stabiel beleidsmodel sinds de jaren tachtig, hebben veranderingen in het aanbod van sociale huurwoningen en de deregulering van de particuliere markt druk gezet op de gedecommodificeerde woningvoorraad in de stad. In deze context is toegang tot de sociale huurmarkt steeds meer gekoppeld

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aan de beschikbaarheid van een financiële bijdrage van de huurders zelf, terwijl in de gereguleerde particuliere markt huurprijzen ook zijn gestegen. Dat maakt de toegang tot de markt moeilijker dan in het verleden. Een belangrijk aspect aan de situatie in Wenen is dat er nog steeds veel lage-inkomens huishoudens zijn die oude huurcontracten bezitten uit de gedecommodificeerde markt waardoor zij nauwelijks zijn beïnvloed door de geïmplementeerde hervormingen. Voor nieuwkomers met lage inkomens is het vinden van betaalbare huisvesting echter steeds moeilijker geworden. De analyse duidt erop dat met de hervormingen de timing van toetreden tot de woningmarkt een cruciale factor is geworden voor de kwaliteit van woonomstandigheden en woonrechten. Vooral nieuwkomers worden met een groeiende schaarste van goedkope woningen in de stad geconfronteerd.

3. De belangrijkste verschillen tussen de drie cases 3.1. De gedifferentieerde impact op lage-inkomens huishoudens

Hoewel zowel in New York, als in Amsterdam als in Wenen de mogelijkheden voor huishoudens met lage inkomens om betaalbare huisvesting te vinden onder invloed van neoliberale hervormingen beperkter zijn geworden, geven de analyses en de vergelijking van de resultaten tussen de drie steden in de hoofdstukken 2, 3 en 5 aan dat de mate waarin huishoudens met lage inkomens negatief worden getroffen door de hervormingen aanzienlijk verschilt tussen de cases. De betaalbaarheid van huisvesting in New York is aanzienlijk achteruit gegaan na de hervormingsgedreven herstructurering van de huurmarkt en gelijktijdige stijging van de huurprijzen. De huur-inkomen ratio’s stegen scherp en het aandeel huishoudens dat te maken heeft met betaalbaarheidsproblemen boven 25 en 50 procent eveneens sterk toe. Hoofdstuk 3 laat zien dat dit tegen de verwachting in niet het geval is in Amsterdam. Net als in New York is de huurmarkt in Amsterdam geherstructureerd en is er sprake van een aanzienlijke verhoging van de huurprijzen, terwijl de inkomensontwikkeling voor huishoudens met lage inkomens sinds midden jaren negentig slechts bescheiden is geweest.

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Ondanks deze overeenkomsten laat de analyse zien dat de huur-inkomen ratio’s redelijk stabiel zijn gebleven en dat huishoudens met lage inkomens niet gedwongen zijn een groter deel van hun inkomen aan huisvesting te besteden. Dit geeft aan dat wanneer huishoudens met lage inkomens in Amsterdam toegang krijgen tot de woningmarkt zij een redelijke positie hebben, in tegenstelling tot vergelijkbare huishoudens in New York.

Conform de literatuur over Europese en Amerikaanse steden stelt ook deze studie dat in de Europese context de herstructureringsprocessen gematigder verlopen (Musterd & Ostendorf, 1998; Burgers & Musterd, 2002); meer specifiek op een wijze waarbij huishoudens met lage inkomens relatief beter beschermd blijven. Feitelijk worden ook in Amsterdam huishoudens met lage inkomens negatief beïnvloed en is de toegang tot goedkope huisvesting moeilijker geworden. Echter, gezien de blijvende bescherming in termen van betaalbaarheid, is er een belangrijk verschil in de mate waarin de hervormingen negatieve effecten teweeg brengen tussen Amsterdam en New York.

De analyse van Wenen lijkt de stelling dat hervormingen in Europese context op een gematigder manier vorm krijgen te bevestigen. Deze studie laat zien dat er nog steeds een aantal sterk beschermende decommodificeringsprogramma’s bestaat; dat speelt een belangrijke rol bij het beschermen van huishoudens tegen de toenemende invloed van de markt en stijgende huur. De analyse laat echter ook een interessant verschil met Amsterdam zien. In Wenen is het moment van toetreden tot de markt voor het ervaren van goede woonomstandigheden en rechten belangrijker dan in Amsterdam. Veel oudere Weense huurders kunnen vertrouwen op hun contracten met relatief lage huurprijzen. Nieuwkomers hebben echter te maken met aanzienlijk hogere kosten.

Als de drie steden worden gerangschikt naar hoe het de insiders met lage inkomens (degenen die toegang hebben weten te krijgen tot de woningmarkt) vergaat na de hervormingen, in vergelijking tot de situatie voor de hervormingen, wordt duidelijk dat de groep in New York het meest is getroffen; daar zien we betaalbaarheidsratio’s die naar boven schieten. Wenen kent nog steeds enkele beschermende programma’s en

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veel lage-inkomens huishoudens profiteren daardoor nog altijd van relatief lage huisvestingskosten. Nieuwkomers in de markt ervaren echter steeds meer moeilijkheden bij het vinden van goedkope huisvesting. In Amsterdam, tenslotte, worden huishoudens met lage inkomens redelijk goed beschermd tegen stijgende prijzen wanneer zij eenmaal toegang hebben tot de markt. Er zijn echter toenemende moeilijkheden voor nieuwkomers om toegang tot de woningmarkt te krijgen.

Binnen de algemene trend die aangeeft dat neoliberale hervormingen de woonomstandigheden voor huishoudens met lage inkomens negatief beïnvloedt, levert deze studie derhalve bewijs van gedifferentieerde impacts van hervormingen, met meer gematigde impact in de Europese context in vergelijking tot de Amerikaanse casus. De vergelijking tussen Amsterdam en Wenen geeft bovendien een indicatie van het bestaan van verdere differentiatie binnen Europa.

3.2 Verschillende hervormingspaden

Naast de gedifferentieerde impacts op huishoudens met lage inkomens als gevolg van de hervormingen, levert de analyse ook inzicht in de gedifferentieerde paden van neoliberale herstructurering en verscheidenheid in de concrete ontwikkeling van marktgeoriënteerde hervormingen. In hoofdstuk 4 zijn New York, Amsterdam en Tokyo met elkaar vergeleken en is de rol die sociale zekerheidssystemen en woningmarktsystemen spelen in het vormgeven aan deze paden benadrukt.

Een opvallend resultaat van deze analyse is dat belangrijke beleidsveranderingen die gericht zijn op het promoten van de markt zich ontwikkelen via sterk padafhankelijke patronen. Zo zijn in New York hervormingen sinds de jaren negentig vooral gefocust op de deregulering van de particuliere huurmarkt, wat niet alleen de grootste sector was voor de hervormingen maar ook de sector waar decommodificatieprogramma’s in het verleden vooral werden geïmplementeerd. Dit staat in contrast met Amsterdam, waar de sociale huursector – begin jaren negentig goed voor

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bijna twee derde van de woningvoorraad - historisch gezien de voornaamste decommodificatie rol speelde. Re-commodificatie strategieën hebben zich gericht op het doen krimpen van deze sector en op de promotie van de koopsector. De particuliere huurmarkt was tot voor kort geen onderdeel van de strategieën tot vermarkting. Wanneer de vergelijking wordt uitgebreid met de bevindingen betreffende Wenen (hoofdstuk 5), dan kunnen nog meer verschillen worden gevonden. In Wenen heeft eigen woning bezit een beperkte rol gespeeld en is beleid voornamelijk gericht gebleven op het aanbod van huurwoningen. Markt gebaseerde herstructurering heeft effect gehad op zowel de sociale huursector als de particuliere huursector, waarbij het beëindigen van de gemeentelijke bouw van woningen en de deregulering van de particuliere huurmarkt belangrijke beleidsveranderingen zijn geweest.

Gerelateerd aan verschillende beleidsveranderingen laat hoofdstuk 5 ook zien dat zich in New York en Amsterdam gedifferentieerde veranderingen hebben voorgedaan in de markt en eigendomsverhoudingen. Hoewel in New York de eigendomsverhoudingen grotendeels stabiel zijn gebleven - met echter ook een opvallende daling van het aantal gereguleerde wooneenheden in de particuliere huurvoorraad - laat Amsterdam een grote verandering zien in de structuur van eigendomsverhoudingen. De sociale huursector kromp van 58,5% in 1995 naar minder dan 48% in 2009, terwijl het woningeigendom verdriedubbelde. In Wenen is de eigendomsstructuur grotendeels gelijk gebleven. Wel hebben zowel de particuliere huur als de sociale huurvoorraad een verbeteringsproces doorgemaakt sinds de vroege jaren negentig; daarbij is het wonen in deze sectoren snel duurder geworden.

Hoewel neoliberale trends dus waarneembaar zijn in elk van de geanalyseerde cases, benadrukt deze studie ook de verscheidenheid van de ontwikkelingspaden en de verschillen in belangrijke beleidsveranderingen en markt transformaties. Behalve verschillen in de mate van impacts als gevolg van de hervormingen (difference in degree), suggereert de analyse dat er ook belangrijke verschillen zijn in soorten impacts (difference in kind) tussen New York, Amsterdam en Wenen. De vergelijking benadrukt de complexiteit en diversiteit van de

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hervormingen. Wat duidelijk wordt is dat de samenstelling van de specifieke neoliberale herstructurering verschilt al naar gelang de geërfde institutionele structuren en beleidsregimes, en derhalve patronen van padsafhankelijkheid en institutionele nalatenschap laat zien. Hoewel disfunctionele effecten van de toegenomen invloed van de markt op het wonen waarneembaar zijn in de drie cases, laten de bevindingen ook de verschillen zien in de onderliggende mechanismen, die vormkrijgen door het verzorgingsregime en het woningmarktsysteem van de steden in de beschouwde institutionele contexten.

4. Algehele conclusive

Door een combinatie van literatuurstudie over de neoliberale stad, vergelijkend woononderzoek en vergelijkend stedenonderzoek (urban studies), beoogt deze studie bij te dragen aan de kennis over de effecten van neoliberale herstructurering van stedelijke woningmarkten op de woon en huisvestingsomstandigheden van huishoudens met lage inkomens. Met de drie cases in drie diverse contexten van verzorgingsregimes en woningmarktsystemen heeft deze studie laten zien hoe, sinds de jaren negentig, de stedelijke woningmarkt is geherstructureerd in de context van een verschuivend regelgeveingsregime. De overgang van een Fordistisch naar post-Fordistisch regime wordt weerspiegeld in een toename van de toepassing van neoliberale beginselen in woon en huisvestingsbeleid, en wel op verschillende ruimtelijke niveaus. Deze studie laat zien dat de beleidsverschuivingen en de markttransformatie nadelige effecten heeft gehad voor de woon en huisvestingsomstandigheden van huishoudens met lage inkomens in termen van betaalbaarheid en beschikbaarheid. De analyse toont dat de geleidelijke ontmanteling van de gedecommodificeerde woningmarkt een belangrijke verklaring biedt voor het groeiende woon en huisvestingsprobleem voor huishoudens met lage inkomens in New York, Amsterdam en Wenen. In alle drie de cases zijn de woonomstandigheden voor huishoudens met lage inkomens achteruit gegaan terwijl de neoliberale hervormingen en gerelateerde markttransformaties vorderden. De studie wijst echter ook op belangrijke context-specifieke verschillen tussen de drie steden. Meer specifiek benadrukt deze studie ten eerste verschillen in mate van impact

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(difference in degree) en wijst op de meer gematigde impact die de hervormingen hebben teweeg gebracht bij huishoudens met lage inkomens in de Europese context. Ten tweede benadrukt de studie een verschil in soort (difference in kind) met betrekking tot de hervormingspaden. Er zijn belangrijke verschillen in de aars van de beleidsverschuivingen en markttransformaties als gevolg van een gedifferentieerde inbedding van steden in sociale verzorgingsregimes en woningmarktsystemen.

De bevindingen hebben een aantal analytische implicaties. Ten eerste onderstrepen ze het belang van het neoliberale gedachtegoed en de snelle verspreiding van de vrije markt ideologie voor een goed begrip van de huidige transformatie van Westerse steden. De conclusie dat we in drie verschillende steden een herstructurering van de woningmarkt zien die gebaseerd is op markt principes en die problemen met huisvestingskosten en uitsluiting van huishoudens met lage inkomens veroorzaakt, kan worden beschouwd als ondersteuning voor betogen over convergentieprocessen in hedendaagse stedelijke ontwikkeling in het Westen. De analyse kan echter ook worden gezien als bewijs voor het bestaan van sterke elementen van divergentie in neoliberale stadsontwikkeling en ondersteunt de claim dat politiek er zeker toe doet (Musterd & Ostendorf, 1998; Fainstein, 2010). De ervaringen met hervormingen in New York, Amsterdam en Wenen maken duidelijk dat neo-liberalisering van huisvesting niet een a-contextueel proces is dat op een gelijke wijze verloopt in verschillende steden (zie Brenner et al., 2009). Dit zal voor velen niet als verrassing komen, maar is een belangrijke correctie op aannames over universele ontwikkeling die nog steeds een dominante rol spelen in de literatuur over neoliberale stadsontwikkeling. Een belangrijke bevinding van deze studie is dat het ontwarren van de complexiteit van neoliberale stadsontwikkeling vraagt om zorgvuldig empirisch onderzoek. De analyse onderstreept dat sociale verzorgingsregimes en woningmarktsystemen cruciale aandacht moeten krijgen om de processen van differentiatie en divergentie tussen steden te begrijpen.

Deze studie heeft getracht het inzicht in de relatie tussen beleidsveranderingen en markttransformaties en de woon en

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huisvestingsgevolgen in drie verschillende stedelijke contexten te vergroten. Gekozen is voor een brede benadering die naar mijn mening het beste past bij de bestudeerde thematiek. Dat neemt echter niet weg dat in een vervolgstudie de analyses verfijnd en uitgebreid zouden kunnen worden. Hierna worden enkele suggesties gepresenteerd langs welke lijnen dat zou kunnen.

5. Open vragen en suggesties voor verder onderzoek

Er zijn ten minste vier productieve routes voor verder onderzoek. Ten eerste zijn er conceptuele en methodologische aspecten in de analyse van de effecten van de hervormingen op de woon en huisvestingsomstandigheden die kunnen worden verfijnd. Enerzijds, daar waar het gaat om conceptuele aspecten, zou de dimensie van ruimte (space) meer expliciet in de beschouwing kunnen worden genomen. De huidige analyse is gebaseerd op de concepten betaalbaarheid en toegang, maar men zou kunnen argumenteren dat het niet alleen uitmaakt of en tegen welke kosten huishoudens met lage inkomens huisvesting in een stad kunnen vinden, maar ook waar. Onderzoek naar door de staat geïnduceerde gentrification suggereert dat neoliberale herstructurering ook processen van ruimtelijke uitsluiting door verplaatsing kan veroorzaken (van Gent, 2013; Uitermark & Boskers, 2014). De uitsluiting van de ruimtelijke dimensie in de analyse kan daardoor hebben geleid tot een onderschatting van de mate waarin neoliberale herstructurering problemen heeft veroorzaakt voor huishoudens met lage inkomens in de drie steden. Een beschouwing van deze dimensie zou een bruikbare conceptuele verfijning zijn. Anderzijds, methodologische gezien zou een kwalitatieve analyse een duidelijke verrijking opleveren van de analyse. De kwantitatieve beschouwing gebaseerd op enquêtegegevens levert veel inzichten, maar heeft ook beperkingen waar het een dieper begrip betreft van de ervaringen en strategieën van huishoudens met beperkte financiële middelen in het omgaan met een tekort aan goedkope huisvesting in de stad.

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Een tweede mogelijke manier waarop de huidige analyse kan worden verfijnd en uitgebreid betreft de focus op huishoudens met lage inkomens. Men kan bepleiten dat huishoudens met lage inkomens in feite een sterk gedifferentieerde groep is. Deze omvat huishoudens in verschillende levensfasen, met verschillende structurele keuzemogelijkheden en diverse voorkeuren. Iemand kan stellen, zoals ik hier heb gedaan, dat ondanks deze diversiteit het zinnig is te kijken naar de huishoudens met lage inkomens als groep doordat hun gebrek aan financiële middelen hen een groep maakt die mogelijk geraakt wordt door het proces van recommodificatie van de woningmarkt. Desalniettemin lijkt recente literatuur aan te geven dat verdere differentiatie verhelderend kan zijn, en wel op twee manieren. Ten eerste is er recentelijk meer aandacht geweest voor specifiek jonge huishoudens in de context van onderzoek over de neo-liberalizering van huisvesting, voornamelijk in het Verenigd Koninkrijk maar ook elders (Forrest & Hirayama, 2009). Dit onderzoek is gebaseerd op een notie van een groeiende intergenerationele kloof waardoor de huisvestingskwestie vooral van toepassing zou zijn voor jonge huishoudens met lage inkomens. Ten tweede is er groeiende aandacht voor het toenemende aandeel dat gevormd wordt door relatief arme migrantenpopulaties in globaliserende Westerse steden als New York, Amsterdam en Wenen. In tegenstelling tot autochtone of lokale huishoudens hebben veel migranten problemen met het verkrijgen van toegang tot de formele woningmarkt, omdat zij niet beschikken over kennis over het systeem, of omdat ze gehinderd worden door een lage positie op wachtlijsten (vaak is er een behoefte aan een hoge plek op wachtlijsten), door gebrek aan passende taalvaardigheid of toegang tot officiële documenten, of doordat zij worden blootgesteld aan discriminatie. Een focus op de wijze waarop migranten huishoudens zich begeven op de woningmarkt onder omstandigheden van toenemende neo-liberalisering kan een andere vruchtbare route zijn voor vervolgonderzoek.

Een derde mogelijkheid voor verfijning betreft het onderdeel over huisvestingsbeleid. In deze studie zijn beleid en beleidsverandering als gegeven beschouwd vanaf het begin en is de analyse beperkt geweest tot het beschrijven van relevante beleidsveranderingen op verschillende

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schaalniveaus in de drie cases. Wat buiten beschouwing blijft in zo’n benadering is de vraag hoe beleid wordt gevormd, de vraag van huisvestingspolitiek in plaats van huisvestingsbeleid. Een dergelijke kritiek is op veel onderzoek op het gebied van huisvestingsstudies van toepassing. In recente literatuur zijn er echter pogingen geweest om meer aandacht te geven aan het proces van beleidsformulering, in combinatie met steun voor meer kwalitatieve methoden (Bengtsson, 2012). Voor deze studie zou een dergelijke analyse zich kunnen verdiepen in de machtsstrijd die zich afspeelt bij de implementatie van beleid gericht op het toepassen van meer marktwerking in de woningsector in de drie steden.

Tenslotte, een vierde route betreft de bepering van een focus op uitsluitend beleid als drijfveer achter de transformatie van stedelijke woningmarkten in de context van een verschuiving van Fordisme naar post-Fordisme. Er kan beargumenteerd worden dat niet enkel de beleidsveranderingen maar ook economische veranderingen die hebben plaatsgevonden sinds de jaren zeventig relevant zijn geweest. Meer specifiek is er recentelijk aandacht geweest voor de manier waarop woningmarkten in toenemende mate onderling verbonden zijn met financiële markten en hoe, in dit proces, stedelijke woningmarkten geïntegreerd raken met internationale marktcircuits (Aalbers, 2008). Een focus op hoe de financialisering van de (stedelijke) woningmarkten impact heeft op het aanbod en type van huisvesting dat beschikbaar is in steden zou, bovenop het neo-liberaliseringsproces, een zinvolle toevoeging zijn voor het analytisch raamwerk om het begrip over waarom en hoe stedelijke woningmarkten veranderen te bevorderen.

Referenties

Aalbers, M.B., 2008. The Financialization of Home and the Mortgage Market Crisis. Competition & Change 12 (2), pp.148–66.

Bengtsson, B. 2012. Housing politics and political science. In D. Clapham, W. Clark, & K. Gibb (Eds.), The SAGE handbook of housing studies. (pp. 206-230). London: SAGE Publications Ltd.

Brenner, N., Peck, J. & Theodore, N., 2009. Variegated neoliberalization:

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geographies, modalities, pathways. Global Networks, 9999(9999).

Burgers, Jack, and Sako Musterd. 2002. “Understanding Urban Inequality: A Model Based on Existing Theories and an Empirical Illustration.” International Journal of Urban and Regional Research 26:403-413.

Fainstein, S., 2010. The Just City, Ithaca and London: Cornell University Press.

Van Gent, W.P.C. 2013. Neoliberalization, Housing Institutions and Variegated Gentrification: How the “Third Wave” Broke in Amsterdam. International Journal of Urban and Regional Research, 37(2), pp.503–522.

Forrest, R. & Hirayama, Y., 2009. The Uneven Impact of Neoliberalism on Housing Opportunities. International Journal of Urban and Regional Research, 33(4), pp.998–1013.

Musterd, S. & Ostendorf, W., 1998. Urban Segregation and the Welfare State: Inequality and Exclusion in Western Cities, New York: Routledge.

Uitermark, J. & Bosker, T. 2014. Wither the “Undivided City”? An Assessment of State-Sponsored Gentrification in Amsterdam. Tijdschrift voor economische en sociale geografie, 105(2), pp. 221–230.

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Curriculum Vitae

Justin Kadi (1985) was born in Vienna, Austria. He obtained a Bachelor’s degree in Urban and Regional Planning (cum laude) from Vienna University of Technology and a Master’s degree in Metropolitan Studies (cum laude) from the University of Amsterdam. During his Master’s studies he spent one semester as visiting student at New York University. He carried out his doctoral research in urban studies at the University of Amsterdam. His research interests include housing policy, welfare states, urban political economy, urban inequalities and gentrification.