How global is the affordable housing crisis?

• DOI: https://doi.org/10.1108/IJHMA-04-2020-0040
• Date: 29 July 2020
• Pages: 429-445
• Published date: 29 July 2020
• Subject Matter: Property management & built environment,Real estate & property,Housing markets
• Author: Tom Coupe

How global is the af‌fordable

housing crisis?

Tom Coupe

Department of Economics and Finance, College of Business and Law,

University of Canterbury, Christchurch, New Zealand

Abstract

Purpose –This paper aims to determine to what extentthe housing affordability crisis is a “global”crisis

and to what extent there is a variation across countries and over time, in who is concerned about housing

affordability.

Design/methodology/approach –The author analysesdata from about 500,000 respondents from over

140 countriesand uses both descriptive statisticsas well as regression analysis (using a randomeffects within

between model[Bell et al., 2019]).

Findings –The f‌indings show that concerns abouthousing affordability are widespread both within and

across countries but the extent of these concerns depends greatly on the country, the subgroup and the

indicator analysed. Moreover, in many countries, more people worry about other aspectsof life than about

housing affordability.

Research limitations/implications –The global diversity in the housing affordabilitycrisis suggests

that one should be cautious when extrapolating research f‌indingsfor a given country to other countries or

when proposinghousing policy transfer across countries.

Practical implications –The specif‌ic nature of the housing affordability crisis varies substantially

across countries. Policymakersthus should be aware that there is no guarantee that a housing affordability

policy thatwas effective in one country will alsobe effective in another country.

Originality/value –This paper is original in its use of the Gallup World poll, a uniquesurvey, which is

done world-wide and hence is ideallysuited for the purpose of this paper, providing a much more detailed

pictureof the global housing crisis than so far availablein the literature.

Keywords Economics, Gallup World Poll, Housing affordability

Paper type Research paper

1. Introduction

Since the early 1990s, there have been a growing number of studies investigating housing

affordability. One literature survey examining 112 journal papers published between 1990

and 2013 (Li, 2014)f‌inds that the vast majority of these studies focus on single countries,

with over half of the studies focussingon either the USA or the UK.

More recently, the “global”dimension of the housing affordability crisis has received

more attention (Wetzstein,2017;Florida and Schneider, 2018). Evidence for the global nature

of the affordability crisis, with both developed and developing countries experiencing

problems with affordable housing, has been provided by Rifkinn (2014),Miller and Wei

(2018) and Kallergis et al. (2018).Rifkinn (2014) using data from the Gallup World Poll,

shows that global satisfaction with the availability of affordable housing has decreased

from 56% in 2008 to 51% in 2013, with satisfaction decreasingin both the Middle East and

North Africa, but increasing in the former Soviet Union. Miller and Wei (2018) compare

JEL classif‌ication –O18, C83, I31

Af‌fordable

housing crisis

429

Received14 April 2020

Revised23 June 2020

Accepted29 June 2020

InternationalJournal of Housing

Marketsand Analysis

Vol.14 No. 3, 2021

pp. 429-445

© Emerald Publishing Limited

1753-8270

DOI 10.1108/IJHMA-04-2020-0040

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1753-8270.htm

average housing costs with netmonthly income in more than 100 municipalities worldwide

and f‌ind that in 15 municipalities monthly housing costs are more than twice the average

income. Finally, Kallergiset al. (2018) use an expert survey focussing on approximately200

cities worldwide and conclude that restrictions in the supply of land can partially explain

variations in housingaffordability.

If the housing affordability crisisis a global crisis, one might considerglobal solutions to

the housing crisis, as well as reviewing the transfer of successful policies from one country

or region of the world to another. Wetzstein (2017), for example, calls for “tracing policy

transfer and best practice patterns globally, internationally and nationally”and for “the

identif‌ication of opportunities for new models to spread (e.g. German tenancy law, Vienna

and Singapore housing models)”[1]. This paper analyses to what extent there is an

opportunity for such one-rule-f‌its-all or one-rule-f‌its-many policies by analysing, in two

specif‌ic dimensions,how global the housing crisis really is [2].

This paper analyses f‌irst how global the relativeimportance of the housing affordability

crisis is. Even though the housing crisis might be global, how important housing

affordability is relative to other problems that countries face can vary. If housing

affordability is the main issue the public is concerned about, then there will be signif‌icant

pressure on policymakers to improve housing affordability and marked buy-in from the

population to support policies that make houses more affordable. In contrast, if concerns

about housing affordability are limited relative to concerns about other issues, solving the

housing affordability crisisis unlikely to be a priority for either policymakers or the people.

Variation in the relative importance of housing affordability will thus affect the demand for

reform and the subsequent likelihood of successfully transferring a given policy across

countries. Demand for reform is often seen as a vital precondition for a successful policy

transfer (Fukuyma,2004;Delcour and Wolczuk, 2015;Laking and Norman, 2007).

Second, this paper studies how global the composition of the housing affordability crisis

is, analysing the extent to which the characteristics of those who are concerned about

housing affordabilityvary around the globe. If the characteristics of people thatworry about

housing affordability are common across countries, then it is more likely that policies that

have been successful in reducingconcerns about housing affordability in one country can be

successfully transferred to other countries. In contrast, if characteristics of people who

worry about housing affordabilityvary a lot across countries, this would suggest that, to be

successful, housing affordability policies will have to be adapted to the specif‌ic

characteristicsof the individual countries.

To analyse these two dimensions, survey data fromthe Gallup World Poll are used. The

Gallup World Poll implements a standardquestionnaire in more than 140 countries around

the world. Besides questions about housingaffordability, respondents are asked about their

satisfaction with other characteristics within their area, such as the qualityof water and air

or the education system, makingit possible to put the global housing affordability crisis into

perspective. In addition, a wide range of respondentcharacteristics are recorded, making it

possible to study who, within the various countries,are the people who are most likely to be

concerned about affordablehousing.

The analysis of the Gallup World Poll shows that concerns about housing affordability

are indeed widespreadthroughout the world, with at least 10% of the population having had

trouble paying for adequate housing in the past year in 75% of the countries surveyed.

Similarly, at least a quarter of the population is dissatisf‌ied with the availability of good

affordable housing in approximately 90% of the surveyed countries. Moreover, the data

identify that, relative to other concernsabout characteristics of the area where respondents

live, housing affordabilityis the characteristic most respondentsare concerned with.

IJHMA

14,3

430