Single households and housing costsFree choice or market constraints

M. Leussink

J. Smeets

Single households and housing costs

Content

• Introduction

• Housing costs

• Overconsumption or constraints on housing market

• Solutions

• Discussion

Single households and housing costs

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Introduction (1)

Housing costs of households are diverse. Especially the housing costs of

single households are often high.

In the future the housing costs will increase and the ‘housing costs to

income ratio’ will increase even further.

Single households and housing costs

Introduction (2)

1)Taxes for housing associations are rising, forcing them to increase rents.- extra points in Housing Appreciation System (WWS) for districts with shortages- an extra rent increase (inflation+1,5%) for households with an income less than €33.614/year- an extra rent increase (inflation+2,0%) for households with an income €33.614-43.000/year- an extra rent increase (inflation+4,0%) for incomes >€43.000/year

2) Other housing related costs, like energy costs, are increasing

Affordability is at issue!

Single households and housing costs

Introduction (3)

Forecasted development of single households in region Eindhoven

shows that this group increases rapidly.

Forecasted development of households [Province Noord-Brabant, The Netherlands]

Single households and housing costs

Introduction (4)

This presentation is mainly based on two surveys and literature study:• A survey among tenants and owners about their housing costs in the

region of Eindhoven providing insight in the affordability of housing. [Leussink & Smeets, 2012]

• A three-yearly housing survey among inhabitants of South East Brabant. [SRE, 2011]

Single households and housing costs

Introduction (5)

Major objective:

affordable housing (rental or owner-occupied) for single person households• Providing insight into affordability• Suggestions to control or reduce housing costs in the short and long term

Respondents:Social rental sector (rent < €652,52/month): N=910Owner-occupied sector (purchase price < €250.000): N=580

Single households and housing costs

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Housing costs (1)

The housing costs of households are not only determined by rent or mortgage but also by dwelling-related costs.

Single households and housing costs

Housing costs (2)

Single person households in: - Social rental sector: 48% (N=442)- Owner occupied sector: 31% (N=183)

  social rental sectorowner occupied 

sectorHouseholds N % N %single <30 years 35 4% 35 6%single 30-54 years 130 14% 83 14%single 55-74 years 186 20% 58 10%single >74 years 91 10% 7 1%couple <30 years 32 4% 42 7%couple 30-54 years 35 4% 53 9%couple 55-74 years 156 17% 100 17%couple >74 years 68 7% 13 2%family 103 11% 162 28%single-parent family 74 8% 27 5%total 910 100% 580 100%

[Leussink & Smeets, 2012]

Single households and housing costs

Housing costs (3a)

Specified housing costs by type of households in social rental sector

39%30% 35%

Single households and housing costs

Housing costs (3b)

Specified housing costs by type of households in owner occupied sector

34%26% 29%

Single households and housing costs

Housing costs (4a)

Specified housing costs of single households in social rental sector

32%40% 40% 38%

Single households and housing costs

Housing costs (4b)

Specified housing costs of single households in owner occupied sector

37% 36% 31%20%

Single households and housing costs

Housing costs (5a)

Housing costs to income ratio in social rental sector and owner occupied

sector compared

Single households and housing costs

Housing costs (5b)

Housing costs to income ratio in social rental sector and owner occupied

sector compared

Single households and housing costs

Are housing costs of singles high….

…as a consequence of the overconsumption of dwelling services

or

…as a consequence of the constraints on the housing market

?

Single households and housing costs

Overconsumption of dwelling services?

Assumption I:

A lot of single person households are living in single family

dwellings.

Social rental sector

Owner occupied sector

Single households and housing costs

Overconsumption of dwelling services?

Assumption I:

A lot of single person households are living in single family

dwellings. TRUE

Assumption II:

Housing costs of single person households in single family

dwellings are higher than the housing costs of single person

households in multi family dwellings.

Single households and housing costs

Overconsumption of dwelling services?

• Housing costs of single person households in social rental sector are similar for different dwelling types.

• Housing costs of single person households in owner occupied sector are less for single family dwellings and similar for multi family dwellings with and without an elevator.

• The costs in the owner occupied sector

are – for all types of dwellings - higher

than in the social rental sector.

Single households and housing costs

Overconsumption of dwelling services?

• Housing costs to income ratio varies in social rental sector from 36% to 40%. Housing costs to income ratio varies in owner occupied sector from 30% to 39%.

• Housing costs to income ratio is relatively high, both in social rental as in owner occupied sector.

• Single person households in an owner

occupied single family dwelling have

the lowest ratio (probably they got a

mortgage because of their relatively high

income).

Single households and housing costs

Overconsumption of dwelling services?

Assumption I:

A lot of single person households are living in single family

dwellings. TRUE

Assumption II:

Housing costs of single person households in single family

dwellings are higher than the housing costs of single person

households in multi family dwellings. NOT TRUE

Single person households are overconsuming TRUE and NOT TRUE

Single households and housing costs

Single households and housing costs

Possible solutions

Long term:• Affordable new dwellings• Smaller new dwellings• Transformation of housing stock

Short term:• Better allocation of dwellings• Social owner-occupied dwellings• Housesharing• Cohousing

Single households and housing costs

Possible solution 1:

Affordable new dwellingsRent < €561,98 / Purchase price <€194.000Optimal energy performance (Energylabel A)

BAM Woningbouw

Single households and housing costs

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Possible solution 2:

Smaller new dwellingsReduction of space per person (mini lofts, studio apartments)

http://www.palermoapartments.it/miniloft_butera_eng.html

http://www.csvmakelaars.nl/object.php?id=1495

http://gebouwvanhetjaar.nl/prijsvraag/preview.php?prijsvraag_name=prijsvraag17&id=2782

Single households and housing costs

Possible solution 3:

Transformation of housing stock

2 dwellings 3 dwellings

Single households and housing costs

Possible solution 4:

Better allocation of dwellings

Better fit between price of the dwelling and income of the household• Income related rent• Allocation based on income

Single households and housing costs

Possible solution 5:

Social owner occupied dwellings

Buying a dwelling under conditions. For example: getting a discount on the market value of a dwelling with an

obligation/possibility to sell back to original seller.

Single households and housing costs

Possible solution 6:

House sharing

A model of household in which a group of usually unrelated people reside together; housemates, flatmates

Share housing often occurs in the 18-35 age group – during a life stage between leaving home and having children

Single households and housing costs

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Possible solution 7:

Co-housing

Private dwellings with common facilities like a kitchen, dining room, laundry, child care facilities, offices, internet access, guest rooms and recreational features

Research among starters: These households are only willing to share a laundry. (as long as it isn’t necessary)

Single households and housing costs

Discussion

- Are there other possible solutions?

Single households and housing costs

Thank you for your attention!

Email: m.i.k.leussink@tue.nl