Join us for a finance-themed discussion as we hear from a range of researchers about the impact of short-term lets in housing markets, the role of public finance in a devolved Scotland, and the impacts of the financial crisis on inequalities in housing wealth. The full abstracts are below.
Presentations from these authors and a live Q&A session are available to all HSA members. Book here
1. Regina Serpa Rationality, Rent seeking and the Rentier Economy: Understanding the Impact of Short Term Lets in Local Housing Markets
Since the global financial crisis in 2008, academic attention has focused on the notion of ‘disruptive innovation’, manifested in the growth of the so-called ‘platform economy’, within a context of increasing inequality, intense labour competition, and erosion of worker rights. Critically, a feature of disruptive innovation is a tendency to exploit absent regulatory oversight or statutory control – the reason why the holiday rental platform, Airbnb, for example, has been increasingly the focus of government (and academic) scrutiny. The controversy surrounding Airbnb (and other platforms) largely centres on the company’s lobbying force and influence on power (at all levels), its impact on market distortion, gentrifying effects, and neighbourhood displacement. This paper presents findings from a study investigating the impact of Short Term Lets in five case study areas in Scotland. Influenced by Lefebvre’s theories, this paper considers the response of devolved governments to disruptive technology, considering the ways in which the platform economy can exacerbate urban inequalities, but simultaneously can partially redress disadvantage in local housing markets through unlocking the use value of renters’ homes. This paper asks: to what extent does hosting lodgers or ‘guests’ represent a rational response to the contemporary housing crisis, or a pursuit of livelihood in response to the rising cost of housing?
2. Kenneth Gibb Does the Treasury still rule? Housing and public finance in a devolved Scotland
Scotland's housing is largely though not completely devolved. An important way that it is still closely influenced by Whitehall decision-making realties to public spending decision-making and the Treasury 'rules of the game' with respect to spending classification, the allowable fiscal envelope and the economics of intervention assessment, appraisal and evaluation. However, even here, there is pressure for change and some evidence of a process of divergence underway. This paper seeks to explain the key tensions at the boundaries between devolved and reserved public expenditure governance practice, looking specifically at housing. The paper draws on ideas from systems theory and critical policy analysis. Drawing on specific housing examples, it points to the distinctive importance of the Scottish national performance framework, the continuing importance of the Green and Magenta books, as well as the uncertainty going forward regarding the fiscal rules given the continuing political and constitutional controversy.
3. Gwilym Owen, Tongtong Chen, Tim Heaton, Gwilym Pryce and Meng Le Zhang The Rise of Housing Wealth Inequality: How the Financial Crisis Initiated a New Era of Growing Regional Inequalities in Gross Housing Wealth in England and Wales
Housing wealth is for many people the largest – often the only – source of household wealth. Unsurprisingly, it has a potentially major role in driving wealth inequalities and the reproduction of those inequalities down generations. That there are large spatial divides in housing wealth across the country is well documented. However there is little recent work on how these inequalities are changing over time, particularly in the decade since the global financial crisis. Are, for example, areas with low price housing accumulating housing wealth at a lower rate than more affluent areas? Previous research using data on housing transactions from the 1980s until 2006 revealed evidence of large cycles in housing wealth inequality but no evidence of a sustained upward trend. We argue, however, that it is possible that the financial crisis marked a structural change in this pattern opening the way to new levels of spatial inequality in house price appreciation. Our aim in this study is to provide an up-to-date robust analysis of the spatial dynamics of housing wealth in England and Wales. To measure inequality between areas we use a range of measures of spatial inequality including the spatial Gini coefficient and BIP (the slope coefficients from a series of regressions of house price inflation on house price levels). The key finding of the paper is that since 2006 housing wealth inequality has increased substantially without any sign of the cyclical trends seen in previous decades. We find that the regional gulf in housing wealth inequality has been widening with implications for generations to come. The results provide an imperative to develop policies to combat housing wealth inequality and to mitigate its negative impacts.