Housing affordability in the 21st century

Abstract

Cities are the main source of countries' economic activity and are home to the majority of their population. Since the 20th century, cities have grown at an accelerated rate, tending to incorporate an ever increasing number the population within their boundaries, which has led to the current situation in which urban areas contain almost 80% of the inhabitants in advanced countries, with mega-cities becoming increasingly prevalent in different parts of the world (UN, 2018). Large cities' role as generators of economic growth and employment (leading economic recovery as a direct effect of the development of agglomeration economies) has earned them recognition as 'vibrant' cities that drive higher incomes (World Bank, 2009:24-25).It appears that the city's success is centred on the increased attraction of the population, especially of households seeking skilled jobs with higher wages (Glaeser and Saiz, 2003), leading to the creation of "superstar cities" where higher-income households are concentrated. In these cities, real estate dynamics reflect competition for existing housing, raising residential prices through the expulsion of those households with insufficient income (middle and low incomes). The latter must commute or emigrate (Lucas, 2012;Mattioli et al., 2017), generating a relocation of households in space that encourages an unequal distribution of income (Gyourko et al., 2013) and that becomes more extreme in the case of the most expensive cities, as two of the results of this process.People also move to cities in search of higher quality services, especially consumer services. As cities become more specialised over time, the retail and leisure sectors also offer better facilities and products, acting as an engine of attraction for residents and temporary populations with higher incomes (leading to the coining of the term 'consumer city ';Glaeser et al., 2001). It is not surprising that the most specialised cities are short-break destinations for a large part of the population (Barron et al., 2021) because of their particular characteristics,