What Ever Happened to Home Ownership and Asset-based Welfare?  


Richard Ronald (University of Amsterdam), Christian Lennartz (University of Amsterdam, and Justin Kadi (Bauhaus-Universität Weimar)

An extended version of this post was originally published  on 3 January 2017 in the Policy Briefing section of Discover Society which is provided in collaboration with the journal Policy & Politics. The original post is available at  http://discoversociety.org/category/policy-briefing/.

Owning your own home has long been recognized as a form of asset-based welfare in policy terms. Historic growth in home ownership and house prices has advanced the assumption that housing equity fulfils a welfare function by acting as a store of wealth or even a reserve of cash. However, as Richard Ronald argues, a clear consequence of this policy has been to widen the gap between rich and poor families, as well as between young and old, with access to housing and housing wealth becoming a critical dimension of social inequality, especially since the last financial crisis. 

Housing has become as much a financial investment as means of shelter, with house price increases over the last four decades demonstrating an unwavering faith in property as the asset vehicle par excellence. Policy makers too have picked up on this with a growing emphasis on home ownership as a means for households to get into ‘the market’ as well as accrue equity that can serve as a buffer against economic volatility.

A particular incarnation of this logic was asset-based welfare which largely manifested itself as an approach to housing privatization, looser credit and debt arrangements, and house price inflation that become recognizable across English speaking societies in the 1980s and 90s.

Ostensibly, the financial crash of 2008 undermined faith in both mortgage and housing markets, with credit conditions severely tightened and house prices falling in most developed economies. While this seemed to mark its demise, we argue that asset-based welfare has not only survived, but prospered, albeit in a new and more individuated guise.

The consequences of this new individuated asset-based welfare has been to widen generational inequalities in wealth, security and housing conditions, especially between the children of the housing rich and housing poor. 

The deep intra-generational differences in housing that we evidence largely mirror inequalities in wealth, as well as the geographies of housing markets. These differences, critically, are affecting the younger generations, whose capacity to acquire independent housing as well as accrue property wealth is increasingly dependent on help from generations above. Such assistance is becoming a default pillar of welfare security, following welfare state austerity measures.

In his forthcoming paper on What Ever Happened to Asset-based Welfare? Ronald offers an extensive analysis of the statistics and policy evidence around home ownership and asset-based welfare. He shows how, set against the backdrop of the global financial crisis, mechanisms such as ‘buy-to-let’ and ‘welfare switching’ have played into the transfer of financial welfare responsibilities from the state to the individual.

If you enjoyed this blog post, you may also be interested to read On support for welfare state reforms and deservingness in the Netherlands by Judith Raven, Peter Achterberg and Romke van der Veen.

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