Abstract
For years analysts involved in reconsidering a nation’s housing policy have found it useful to compare their country’s consumption patterns and policies with those of other countries. A comparison of housing consumption patterns against those of a reference nation often serves to justify a change in housing consumption norms and can thereby lead to an adjustment of housing policy objectives.1 Similarly, international comparisons of housing policies often serve to justify local policy changes, especially if coupled with statements of policy impacts observed in other nations.2
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An example in point is the comparison of West Germany’s rates of owner occupancy with U.S. rates. Such a comparison in the Federal Republic of Germany was used to justify the promotion of policies to increase that rate.
Consider the discussion on “leased housing” in the Federal Republic of Germany in 1977/1978, which was also transferred from the United States.
See, for example, L. Bums and L. Grebler, “Resource Allocation to Housing Investment: A Comparative International Study,” Economic Development and Cultural Change, vol. 25 (October 1, 1976 ), pp. 95–121.
See, for example, C. McGuire, International Housing Policies: A Comparative Analysis ( Lexington, Mass.: D.C. Heath and Co., 1981 ).
If unreferenced, the evidence is obtained from the 1978 Annual Housing Survey for the United States, U.S. Bureau of the Census, Annual Housing Survey: 1978, Part A, General Housing Characteristics for the United States and Regions (Washington, D.C.: U.S. Government Printing Office, 1980)) and from the One Percent Housing Sample of 1978 for the Federal Republic of Germany (Statistisches Bundesamt Wiesbaden, 1%—Wohnungsstichprobe 1978, vol. 1–5, Bautaetigkeit und Wohnungen, (Wiesbaden, 1981)).
At this writing no data are available for comparisons of the cost of dwelling units in multifamily structures.
We lack comparable figures on the price per unit area of developed land. However, that price should differ even more, because the average lot size per single-family home is much larger in the United States.
The only exception we can think of is that virtually all West German houses are equipped with a full basement, as compared to less than one-third of American homes.
Examples of these will be discussed in the next section.
U.S. Energy Information Agency (1981).
These are sketched later in this paper in the section on Comparison of Housing Policies, and discussed in more detail in chapter 3.
Net income equals gross income less income tax and Social Security payments. Net income is the standard way in which West Germans report their incomes, while U.S. citizens routinely report gross incomes.
This point was raised by Eugen Dick in a personal communication with the authors. The numbers are derived by deducting operations and maintenance costs and depreciation from average annual rental payments per unit floor space net of utilities, and dividing by the corresponding development costs.
For instance, because of a higher turnover in the United States, to be discussed in the next section, there is the associated risk of vacancy.
M. Turner and R. Struyk, Urban Housing in the 1980s (Washington, D.C.: The Urban Institute Press, 1984); figures based on those for West and Northeast Census Regions. This value may seem high, but in 1978 the average ratio of gross rent to gross income was 30.1 percent. Hence, average Social Security and income taxes needed to average only 12 percent to yield this figure.
A comparison of homeowers and renters by income quartiles for each country is given in table 2–2 of this volume.
Estimate performed by the Bundesministerium fuer Raumordnung, Bauwesen und Staedtebau on the basis of data on construction activity.
They in turn feed back on labor market mobility.
Institut fuer Wohnen und Umwelt, Infratest Wirtschaftsforschung, Empirische Erforschung der Auswirkungen des Zweiten Wohnraumkundigungsgesetzes, vol. 8 (Bonn: Schriftenreihe des Bundesministers fuer Raumordnung, Bauwesen und Stadtebau, 1979), table 88.
According to our estimate, average vacancy rates do not appear to be sharply divergent. They amount to 3.75 percent of the stock in the United States and 2.97 percent in the Federal Republic of Germany. Yet rough estimates of vacancy durations indicate that these figures represent 10.85 weeks in the Federal Republic of Germany, which is 3.55 weeks longer than in the United States. This means that, on average, a smaller share of units appears in the West German market and stays vacant over a longer period of time.
Indeed, one could well imagine two housing market equilibria with the same resident population, one involving long (planned) periods of stay, high search costs, and correspondingly low turnover, and another one involving short periods of stay, low search costs, and correspondingly high turnover rates.
Again, one could imagine two housing market equilibria with the same resident population, one involving unsegregated neighborhoods and consequently low neighborhood quality-induced mobility, and another one segregated neighborhoods with a high neighborhood quality-induced turnover.
As far as the choice of mode of tenure is concerned—this point is confirmed by BoerschSupan in chapter 3.
For example, see McGuire, International Housing Policies. Most policies involving subsidies or tax writeoffs are also described in more detail in chapters 3 and 4.
It is worth noting that in recent years the Social Housing program was oriented more toward lower-income households. Also, up to 1980 considerable subsidies were granted to lower-income savers to assist them in the purchase of an owner-occupied unit.
For more on recent developments, see R. Struyk, N. Mayer, and J. Tucillo, Housing Policy at President Reagan’s Mid-Term ( Washington, D.C.: The Urban Institute Press, 1984 ).
See U.S. Department of Housing and Urban Development, Consolidated Annual Report to Congress on Community Development Program (Washington, D.C.: Office of Community Planning and Development, U.S. Department of Housing and Urban Development, 1984 ).
Recently, there has also been some increase in the share of households with an unemployed primary earner.
In our description of the West German policy, we emphasize the tax treatment of single-family homes. Until 1983, there was a loophole to this. In adding an apartment unit to such a home—even one “rented” to a family member—one could enjoy the more favorable tax treatment given to owners of rental property. See chapter 3.
Up to that time, even the accelerated depreciation schedule was only applicable to new structures.
This regulation has also a cost-increasing effect when it comes to upgrading dwelling units.
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Stahl, K., Struyk, R. (1985). Introduction. In: Stahl, K., Struyk, R.J. (eds) U.S. and West German Housing Markets. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-10649-5_1
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