Kováts Bence: The Financialisation of Housing and Housing-related Family Support in Hungary
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3. The global rise of parental support in housing: trends and determinants
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3.1. Parental support in housing and conditions of its resurgence

3.1. Parental support in housing and conditions of its resurgence

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Recent research drew attention to the fact that the family does not only play a role in housing provision in semi-peripheral countries, but it has not completely diminished in high-income countries of the core either. In pre-capitalist traditional communities intergenerational co-residence was widespread and if the family’s economic capacity allowed, it provided the pool of labour necessary for the construction of housing (Franklin, 1995). As self-build became less and less practicable and tolerated in NWE urbanised societies (Hardy and Ward, 1984) and the state-supported NRH sector expanded in the postwar period, self-build diminished and intergenerational co-residence also declined (Gulbrandsen and Langsether, 2003).

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However, the retreat of the state in housing provision since the 1970s and the slower transition of younger generations to adulthood altered the earlier trend and a growing number of researchers started to highlight the return of the family as a housing provider due to looming housing unaffordability resulting from trends towards the re-commodification of housing and labour, but also delayed adulthood (Lennartz, Arundel and Ronald, 2016; Druta and Ronald, 2017; Flynn and Schwartz, 2017; Ronald and Lennartz, 2018; Burgess and Muir, 2020).

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Re-commodification of housing took place in a number of steps. On the one hand, supply-side subsidies, playing a pivotal role in financing the expansion of the NRH sector in core countries since World War I (WWI), were decreased and much of the housing stock became privatised (Harloe, 1995; Stephens, Burns and MacKay, 2002; Clapham et al., 2010; Wilcox et al., 2010; Fitzpatrick and Pawson, 2014). On the other hand, the assistance of the welfare state in housing access was not simply retrenched, but, in line with the practice of roll-out neoliberalism described by Peck and Tickell (2002) was also reconfigured to promote home ownership (Ball, Harloe and Martens, 1988; Ronald and Elsinga, 2012; Flynn and Schwartz, 2017). Deregulation of housing finance, decrease of property taxes and mortgage subsidies all incited households to purchase housing through mortgage and use their (by their old age) debt-free property to finance their welfare in old age (Castles, 1998; Kemeny, 2005; Forrest and Hirayama, 2009; Flynn and Schwartz, 2017; Ryan-Collins, 2019).

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Housing affordability problems of young adults, however, would not have inevitably had to, and were not anticipated to, lead to the family’s hurry to rescue its younger members. As outlined in earlier chapters, political economists generally argue the the family plays an important role in welfare redistribution in those regions where the economy does not guarantee universal formal employment or where the important role of the family is culturally underpinned. Further, as formulated by welfare researchers, not all state action aiming at the de-commodification of labour contributes to the de-familialisation of it (Orloff, 1993; Esping-Andersen, 1999).

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However, while differences in the de-familialisation of labour are significant across NWE welfare regimes (Esping-Andersen, 1999), it is less true of the de-familialisation of housing. According to the theory of Kemeny (1995) outlined in Section 2.2.1, countries belonging to the conservative and social democratic clusters exhibit a very similar type of de-commodification characterised by a high share of NRH. This form of housing has a significant de-familialising effect as accessing it requires the least support from the family. Following this logic, the extent of de-familialisation in the market-oriented liberal welfare regime with a dualist rental system is, in all likelihood, lower compared to the unitary-corporatist category. Yet, considering housing is provided overwhelmingly by speculative constructors, it is supposed to be much higher than in semi-peripheral countries characterised by a higher level of intergenerational co-residence and self-build involving a remarkable amount of family labour.

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Based on the above assumption, in NWE housing systems processes of commodification and de-commodification should have both contributed to de-familialisation, although to a different measure. However, evidence seems to refute such assumption. Societal costs of the current phase of re-commodification of housing seems to be increasingly counterbalanced by families, and not the state’s efforts aiming at de-commodification (Flynn and Schwartz, 2017).

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This process can clearly be identified in most countries’ post-crisis measures. After the GFC caused by excessive deregulated mortgage lending, countries do not seem to significantly alter their earlier policies. They established higher down payment thresholds, and lower loan-to-value and loan-to-income ratios in mortgage lending to exclude risky households from taking mortgages. Nevertheless, the policy of Quantitative Easing pursued by the US and the EU, contributed to the growth of mortgage lending and pumped up housing prices again (Ryan-Collins, 2019). However, not only did large-scale housing price appreciation restart in a relatively short time after the crisis, but (relative to the older generations) lower-income and asset-poor young adults’ access to mortgage became restricted and this was not addressed by expanding the supply of NRH (McKnight, 2002; Meen, 2011; Kennett, Forrest and Marsh, 2013; National Housing Federation, 2014; Flynn and Schwartz, 2017; Wong, 2019).
 

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Jegyzet elhelyezéséhez, kérjük, lépj be.!

Figure 2 Percentual change in the share of the population residing in private rental housing let at market price between 2007 and 2018 in selected European countries.
Source: Eurostat (2020)
 

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Worsening access to housing through own resources are addressed by young adults in two ways: with the help of the family or without it. In most countries with housing systems promoting home ownership, those who cannot count on family support choose private renting. European data displayed in Figure 2 signals falling home ownership rates among young adults and their rising share among private tenants (Heath, 2008; Rugg and Rhodes, 2008; Clapham et al., 2010, 2014; Alakeson, 2011; McKee, 2012; Kennett, Forrest and Marsh, 2013; National Housing Federation, 2014; Kemp, 2015; Lennartz, Arundel and Ronald, 2016; Green, 2017). Since renting in such homeownership-oriented housing systems is weakly regulated and does not offer high security of tenure, this shift entails that a growing share of young adults live in an insecure and unaffordable tenure relative to home ownership. This often negatively affects their long-term decision such as marriage or having children (Kemeny, 1995; Kemp and Kofner, 2010; McKee, 2012; Hoolachan et al., 2017; Soaita and McKee, 2019).

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The other way of mitigating the effects of housing unaffordability is tapping into family resources. The literature suggests that two forms of family support are widespread: young adults living with their parents (intergenerational co-residence) and housing-related parental inter vivos financial support (financial support). Based on the analysis of data from 13 countries, Flynn and Schwartz (2017) found that between 1980 and 2010, the proportion of young people securing their own home from their own resources significantly decreased while the share of young adults relying on family resources in housing access, either in the form of intergenerational co-residence or inter vivos financial transfers, increased in most countries. In this way, in housing the current wave of re-commodification is argued to facilitate rather than decrease familialism in core countries. In the following, cross-regional differences and trends of two most frequent forms of family support, intergenerational co-residence and financial support are reviewed to gain a more complex understanding of the development of familialism in housing.
 
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