What ever happened to asset-based welfare? Shifting approaches to housing wealth and welfare security

Abstract

The idea that households should be encouraged to invest in assets that accrue over the lifetime to be drawn upon when needed (usually later in life), or assed-based-welfare, became increasingly evident in early-2000s policy discourse. The global housing boom, meanwhile, made home ownership and housing assets a specific focus of reforms. However, the housing base of asset-based welfare has been transfigured in the last decade. In this paper we address how the home has retained its centrality as an asset base of individual welfare, yet under distorted conditions of access and distribution due to shifting socioeconomic and housing market environments. Rather than evening out the spread of welfare resources, housing markets have begun to polarize household conditions. We specifically focus on the British case, which appears to have manifested a rather extreme case of intergenerational housing wealth polarization, expanding the private rental sector and landlord numbers whilst undermining the homeownership base.

The Revival of Private Landlords in Britain’s Post-Homeownership Society

“…Fox-O'Mahony and Overton 2015, Ronald et al 2017). The following analysis takes this notion as a starting point and draws attention to the specific, but so far largely unacknowledged strategy featuring multiple property accumulation.…”

In which European countries is homeownership more financially advantageous? Explaining the size of the tenure wealth gap in 10 countries with different housing and welfare regimes

“…Welfare responsibilities are increasingly shifted from the state to the individual, which is assumed to have increased the importance of asset-based welfare (Crouch, 2009). We distinguish between three types of asset-based welfare (ABW): passive ABW, active ABW and pro-active ABW (Doling & Ronald, 2010;Ronald, Lennartz, & Kadi, 2017).…”

“…For most homeowners, first-tier (mostly) PAYG 2 pensions more or less suffice to sustain their livelihood after retirement. Ronald et al (2017) describe the imputed income 3 from homeownership after the amortisation of the mortgage and house price inflation as the classic, passive form of asset-based welfare (ABW). As countries differ regarding the organisation of the second pillar of their pension system (private/public, occupational/universal, mandatory/voluntary), the need for assets and the opportunity to accumulate wealth differ as well.…”

“…We argue that this is the case because the relationship between housing and depends on the coverage of the pension schemes and their organising principles. Only in case of voluntary participation in (state-mandated) second-tier pension funds there can be a trade-off between housing wealth and housing wealth (passive asset-based welfare and pro-active asset-based welfare) (Delfani, De Deken, & Dewilde, 2014;Ronald et al, 2017). In conservative welfare states, with fragmented pension coverage, the trade-off might occur for poorly covered sub-populations only (see Wind & Dewilde, 2018).…”

A house divided: asset-based welfare and housing asset-based welfare

“…3 ABW focuses mainly on small amounts of financial wealth (Gregory 2016). However, this has prompted a criticism that ABW fails to recognise the dominant role that housing plays in the assets owned by large parts of the population (Watson 2008;Toussaint and Elsinga 2009;Doling and Ronald 2010a;2010b;Ronald and Doling 2011;Lowe, Searle and Smith 2011;Montgomerie and Büdenbender 2015;Stebbing and Spies-Butcher 2016;Walks 2016;Lennartz and Ronald 2017;Ronald, Lennartz and Kadi 2017;Soaita, Searle, McKee, and Moore 2017). Doling and Ronald write that the: 'asset in asset-based welfare has frequently become property or housing asset' (Doling and Ronald 2010a, 165, italics in the original).…”