500 Years of Housing Rents, Quality and Affordability

84 Pages Posted: 12 Jul 2019 Last revised: 18 Jul 2019

See all articles by Piet Eichholtz

Piet Eichholtz

Maastricht University

Matthijs Korevaar

Maastricht University - Department of Finance

Thies Lindenthal

University of Cambridge

Date Written: July 11, 2019

Abstract

How do housing rents, quality and affordability evolve when cities grow over time? This paper studies urban housing markets for half a millennium (1500–2017) for Amsterdam, Antwerp, Bruges, Brussels, Ghent, London, and Paris. Based on a dataset of 436,000 rent observations, we build new indices of housing rents, quality and inequality, and relate these to changes in wages and population. Long-term growth in real rent prices has been limited. Before 1900, markets were unregulated and rent prices and wages rose in tandem when cities grew, while housing quality and inequality increased. After 1900, housing affordability started improving substantially, and we show that short-term improvements in this period were partially attributable to rent controls. Most of the surge in housing expenditure that did occur over time is due to increasing housing quality rather than rising rent.

Keywords: housing affordability, rent prices, inequality, housing consumption

JEL Classification: N90, O18, R21, R31

Suggested Citation

Eichholtz, Piet and Korevaar, Matthijs and Lindenthal, Thies, 500 Years of Housing Rents, Quality and Affordability (July 11, 2019). Available at SSRN: https://ssrn.com/abstract=3418495 or http://dx.doi.org/10.2139/ssrn.3418495

Piet Eichholtz

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Matthijs Korevaar (Contact Author)

Maastricht University - Department of Finance ( email )

Maastricht, 6200 MD
Netherlands

Thies Lindenthal

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

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