Housing market between choice and chance

Housing market between choice and chance

Housing allocation ‘by lottery’ in the rental market of Eindhoven

M.I.K. Leussink

J.J.A.M. Smeets



Content

• Introduction• Structure and use of housing stock Eindhoven• Allocation of housing• The choice based allocation system with lottery• Research method• Advertisements, applications, rejections and acceptations• Conclusions• Discussion



Introduction

• Mature housing market• Qualitative mismatch• Starters / movers ratio: 20 / 80%• Adequate allocation system



Figure A: Structure and use of the housing stock in Eindhoven (2007)



AllocationFrom Towards

Distribution model

Landlord controlled

Administrative allocation

Matching criteria

Passive attitude (waiting list)

Restricted freedom of choice

Supply model (CBL-model)

Quasi-market

Choice based allocation

No or less criteria

Active participation

Enlarged freedom of choice



Allocation in Eindhoven

Since 2003 revisited allocation system• Freedom of choice• Counteracting segregation• Quality of live

Advertising of supply

Selection by lottery



Benefits of a lottery (Boyle, 1994)

Hopefulness• You have not to wait many years, you have a chance soon

Fairness• In the long run the tenant mix reflect the make-up of the waiting list

Convenience• The administrators need only keep a list of those applying



Choice (Brown & King, 2005)

• Capability to act

Effective choice (Brown & King, 2005)

• Connects choice with access to resources

Three principles for housing processes (King, 1996)

• Limitation of regulation• Control by users• Access to resources



Advertise the dwelling

Applicant reacts

Selection by drawing lots

The applicant is not selected

The applicant is selected

The dwelling is offered to theselected applicant

The applicant reject the offer

The applicant is not admitted

The applicant accepts the dwelling

Tenant moves out after x years

Dwelling is offered to the next applicant that is selected

Figure B: the choice based allocation system with lottery



Research method• Data-mining process

• Existing database: 13,264 active dwelling seekers• Internet survey: 3,780 participants



Active house-hunters

At least one application in the last year

Age N %< 23 years 2883 21,8%24-30 years 5544 41,8%31-55 years 3855 29,1%56-70 years 720 5,4%71 > years 250 1,9%Total 13252 100,0%

= 63,6%

= 36,4%

≠ 20% starter

≠ 80% mover



• Rent-alerts


Applicant reacts










Age House-hunters House-hunters with rent-alert Percentage< 23 years 2886 380 13,2%24-30 years 5544 1368 24,7%31-55 years 3783 1259 33,3%56-70 years 792 462 58,3%71 > years 259 185 71,4%Total 13264 3654 27,5%



• Advertisements and applications (1a)Types of dwelling

types of dwelling applications advertisements applications/advertisement chanceapartment with elevator 129.827 471 276 0,4%apartment without elevator 90.231 155 582 0,2%single-family dwelling 108.499 123 882 0,1%room/lodging 4.541 37 123 0,8%total 333.098 786 424 0,2%


Applicant reacts












• Advertisements and applications (1b)Rental price

rental price applications advertisements applications/advertisement chancecheap 141.611 304 466 0,2%affordable 183.011 380 482 0,2%expensive 8.476 102 83 1,2%total 333.098 786 424 0,2%


Applicant reacts












• Advertisements and applications (1c)Target groups

target groups applications advertisements applications/advertisement chance< 30 years old 26014 113 230 0,4%30-55 years old 298935 441 678 0,1%> 55 years old 8149 232 35 2,8%total 333.098 786 424 0,2%


Applicant reacts












• Advertisements and rejections (2a)Types of dwelling

types of dwelling advertisements rejections rejections/advertisementapartment with elevator 471 350 0,74apartment without elevator 155 67 0,43single-family dwelling 123 38 0,31room/lodging 37 61 1,65total 786 516 0,66


Applicant reacts












• Advertisements and rejections (2b)Rental price

rental price advertisements rejections rejections/advertisementcheap 304 225 0,74affordable 380 200 0,53expensive 102 91 0,90total 786 516 0,66


Applicant reacts












• Advertisements and rejections (2c)Target groups

target groups advertisements rejections rejections/advertisement< 30 years old 113 124 1,1030-55 years old 441 189 0,43> 55 years old 232 203 0,88total 786 516 0,66


Applicant reacts












• Acceptation applicants (3)

year 2007 2008 2009applicant N % N % N %1st 54 76% 165 73% 148 77%2nd 12 17% 37 16% 33 17%3rd 3 4% 14 6% 6 3%4th 2 3% 8 4% 4 2%5th 0 0% 2 1% 1 1%6th 0 0% 1 0% 0 0%Total 71 100% 227 100% 192 100%


Applicant reacts












Conclusions

• Access to scarce resources

• Choices are competitive

• System more ‘chance-based’ then choice-based

• System more effectively for supplier



Discussion

• Access to resources is not opened up by choice-based systems

• Information between applicants unequal



Thanks for your attention

The full paper will be put into the ERES digital library:

http://eres.scix.net/cgi-bin/works/Search?search=year:2011+series:conference

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Housing market between choice and chance