The inequalities and inequities that housing markets generate have become a cross-national issue in the last decade or so. In Australia, the UK and the US, discussions of “Generation Rent” have taken centre stage.
In the generational debate, older, asset-wealthy owner-occupiers advantaged by previously more stable lending conditions and historic house price trends have been pitted against younger cohorts. The latter have been priced out of the home buyers’ market and pushed into rental housing in ostensible perpetuity.
Evidence of just what “Generation Rent” is and, more importantly, why it matters have, however, been somewhat fuzzier.
Economies and security built on housing
One reason declining access to home ownership for younger people is of such concern is that housing is much more than housing. The wealth accumulated in our homes over our lifetimes has come to represent economic security and a means to live more comfortably in old age.
It’s seen as a buffer in times of hardship – buying a home is an implicit part of the welfare system in many contexts.
Governments have largely nurtured this. They often support or even fund the growth of home ownership and protect property value increases. It has become increasingly evident, however, that this approach to housing markets as a kind of welfare policy has fundamental limitations.
For one thing, the global financial crisis of almost a decade ago demonstrated how deeply rooted and transnational housing finance has become. A welfare system that relies on home ownership in a globalised era is thus critically vulnerable.