Disadvantaged in the housing market: Effects of public interventions

Do social housing policies contribute to better housing outcomes for their beneficiaries, and if so, in what way? The overarching objective of this project has been to evaluate the effects of the housing policy schemes in Norway, that are supposed to assist disadvantaged households in achieving better and more stable housing conditions. The three main social housing policy programs are the housing allowance, the starter mortgage, and municipal rental housing. How they work and whether they contribute to better and more stable housing outcomes has been analyzed using register data merged with program participation data from The Norwegian State Housing Bank and information on municipal rental housing occupancy in Oslo and Bergen. In addition, we have analyzed documents and interviewed key municipal housing personnel in 15 municipalities. In two papers we compare applicants whose starter mortgage applications were approved to applicants whose applications were rejected. Given the local operation of the starter mortgage program there are large differences across municipalities in who is approved for a loan and who is not. We exploit this feature in order to estimate the effect of the starter mortgage program on wealth accumulation and housing careers after refinance. Not surprisingly we find a large positive effect on wealth accumulation – in the order of 200 000 – 380 000 NOK after three years. Similarly, we find that applicants that are approved for refinancing with the starter mortgage program are more likely to remain homeowners, experience less crowdedness, and have lower rates of residential mobility post application. For the starter mortgage we have also examined possible explanations to the large gap in mortgage approval rates for applicants with ethnic Norwegian and foreign background, respectively. While a large part of the difference is explained by observable characteristics like demographics and socioeconomic status, a difference of about 4 percentage points remains unexplained. Two papers detail the experiences of municipal housing residents. The first explores the subjective perception of security and freedom among municipal housing residents in Oslo. It emphasizes both the ambiguity as well as the paradox embedded in a housing regime that despite its strong market orientation and strict means-testing still provides stable homes for many tenants. The second paper discusses the inherent trade-off between “insiders” and “outsiders” in who matters the most and will be given most consideration when allocating the scarce resource of municipal rental housing. While the municipal rental sector seems to favor “outsiders” on paper, the reality is more nuanced as case workers must consider the needs of both “insiders” and “outsiders” when deciding who will reside in municipal rental housing. More importantly, however, this casts doubt on the feasibility and realism of the goal of a high turn-over in the municipal rental sector implied by three-year fixed-term contracts. We have also investigated the effect of municipal housing residency on children’s scholastic achievements. By comparing siblings, we find that growing up in municipal rental housing for the most part affects school results positively. Those who moved in at a younger age, were more likely to start higher education and had a higher GPA, but they were also more likely to not graduate from secondary education, than their older siblings. Residential stability improved upon moving to municipal rental housing, which may explain part of the positive effect. However, we cannot rule out other explanations as moving into municipal rental housing may coincide with other non-observable positive changes in the families’ lives, which may be the true cause for better school outcomes. We also explored the relationship between housing allowance and income, i.e., labor supply. We investigated whether housing allowance recipients adjust their labor supply downwards in response to the different kinks in the housing allowance benefit scheme, implying that they decrease their labor supply due to their benefit being reduced. Earlier work did not find any sign of this neither in 2008 nor in 2010. Nor do we detect any sign of downward labor supply adjustment. However, there are several reasons why we would not expect this response to be very large at the margin. For one, the benefit reduction is not very transparent as it follows a complicated calculation. Moreover, the adjustment is done ex post. In addition, recipients may be compensated by other types of benefits not observable in our data. English website: https://www.oslomet.no/en/research/research-projects/housing-market-disadvantage

Virkningene av et samfunnsvitenskapelig forskningsprosjekt kan fremkomme på kort sikt, men vanligvis vil det ta noe tid før nye perspektiver, tolkninger og hypoteser kan få gjennomslag på det aktuelle forsknings- og politikkfeltet. Politikkutforming i stor grad en langsom prosess der stiavhengighet, de lange linjene og overordnet politisk retning er førende heller enn ferske forskningsresultater. Vi har likevel flere indikasjoner på at våre forskningsresultater er viktige og vil bidra til utvikling av fremtidens boligpolitikk. Prosjektet har hatt flere ringvirkninger, bl.a. var Kristin Aarland medlem i det regjeringsoppnevnte By- og levekårsutvalget (2018-2020) og i ekspertgruppen for evaluering av bostøtten (2020-2022; oppnevnt av daværende Kommunal- og Moderniseringsdepartementet), se henholdsvis NOU 2020: 16 - regjeringen.no og Ekspertgruppe for evaluering av bostøtten - regjeringen.no. Dessuten var både Øystein Hernes og Jardar Sørvoll bidragsytere til bostøtteevalueringen ved å presentere sine arbeider der, og Sørvoll skrev i tillegg et lengre trykt vedlegg om den historiske utviklingen av bostøtten etter krigen. Videre har samarbeidskonstellasjonen med Frischsenteret og NOVA i Disadvantaged blitt videreført i det nyopprettede forskningssenteret BOVEL, som er finansiert av Kommunal- og distriktsdepartementet, se BOVEL - Senter for bolig- og velferdsforskning (oslomet.no). Et hovedmål med senteret er å styrke den samfunnsøkonomiske forskningen på bolig, særlig basert på norske registerdata, som også har vært sentralt i Disadvantaged-prosjektet. Arbeidet i senteret vil i så måte bygge direkte videre på Disadvantaged-prosjektet. BOVEL, der de fleste av Disadvantaged-prosjektets medarbeidere i ulik grad er involvert, har en løpende dialog med Kommunal- og distriktsdepartementet, bl.a. i anledning departementets kommende Boligmelding som er forventet våren 2024. Flere av forskningsresultatene oppnådd i Disadvantaged-prosjektet er relevante i denne sammenhengen. Blant annet har resultatene i flere av artiklene som omhandler startlånet, vist at det har en positiv effekt å eie, selv blant husstander med lave inntekter. Slike resultater støtter videre oppunder eierlinjen som det bærende prinsippet i den norske boligpolitikken.

Welfare state policies include housing instruments to help disadvantaged individuals with limited access to stable and decent housing. In Norway the prime instruments are housing allowances, starter mortgages and public rental housing. Our project investigates how housing support instruments (i) are distributed across groups, and whether they (ii) impact future housing conditions and well-being of disadvantaged groups in particular. The project builds on national administrative data, supplemented with local administrative records from public rental housing providers, all based on personal identifiers that enable us to construct longitudinal data of households over 10 to 20 years. The wide range of socioeconomic characteristics facilitate a detailed description of ?disadvantage?, in terms of social background, income, wealth, family and health, and how it relates to housing careers. The effects of housing support instruments will be identified within a treatment effect framework of counterfactual outcomes. Receivers and non-receivers are different in terms of individual resources and potential outcomes. We aim at identifying causal effects of policy alternatives within the treatment effect paradigm of counterfactual outcomes, using state of the art techniques for large data sets. Effects are likely to differ between the short and the long run.The longitudinal design facilitates a dynamic perspective with opportunities to identify sources of path (state) dependence, where social housing instruments may have long-lasting impacts on housing careers and other outcomes. Since housing support is just one part of social insurance policies, it must be studied in combinations with other welfare programs that can be substitutes (e.g. social assistance) or complements (e.g. counselling). To provide reliable evidence of alternative policies, we combine complementary competencies from NOVA and the Frisch Centre of Economic Research, as well as international scholars