The New Politics of the Housing Market
Name of applicant
Martin Vinæs Larsen
Institution
Aarhus University
Amount
DKK 4,165,323
Year
2021
Type of grant
Semper Ardens: Accelerate
What?
In recent decades many developed countries have experienced an unequal housing price boom, with prices increasing dramatically in and around a few large cities. This project focuses on the political implications of this economic development, arguing that it has created a new important political constituency of homeowners that live in these increasingly expensive areas. The project explores to what extent this new residential bourgeoisie has both the motive and the means to protect their housing wealth by keeping prices on their current trajectory.
Why?
By exploring the influence and power of the residential bourgeoisie, the project aims to understand to what extent housing price inequality has become politically "locked-in". That is, whether political forces have made it impossible or very hard to reverse this trend. This is important, because we know that unequal housing markets can have adverse long-term effects on a country's economy. Housing price inequality makes it harder for people to move into the increasingly expensive yet economically productive cities, which lowers economic prosperity, creates regional inequality, and increases urban sprawl, commute times and associated greenhouse gas emissions.
How?
To answer this research question, the project develops a novel theoretical argument that characterises a new potentially powerful political constituency, the residential bourgeoisie, lays out how this constituency translate their shared economic interest into a preference for policies that protect their home values, and explains why politicians will be particularly mindful of the residential bourgeoisie's preferences for these policies. Methodologically, the project provides a test of this argument in two very different settings which have experienced a similar housing price boom: Denmark and the US. In both countries I combine registry data with experiments and surveys to explore different parts of the theoretical argument.