500 Years of Housing Rents, Quality and Affordability
84 Pages Posted: 12 Jul 2019 Last revised: 18 Jul 2019
Date Written: July 11, 2019
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
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