How do young people access housing?

Aitana Alguacil Denche, sociologist
Adapted by Núria Vallès-Peris

Introdution

The young adult population is one of the most numerous groups gen­erating housing demand. However, in recent years, increasing market prices coupled with the poor employment conditions faced by young people, have enormously hampered their access to a dwelling. Un­employment and precarity have a direct influence on their difficulties in accessing housing, whether as rental tenants or owner occupiers. They are the group most affected by the imbalance between the hous­ing market and the jobs market. Furthermore, in Spain’s case, hous­ing policies aimed at young people have gradually dwindled in recent years, leading young people to access housing later and with more difficulties.

The average age of emancipation in Spain stands at 29.3 years. Factors inhibiting emancipation have a direct influence on the decrease in fertility rates

This article analyses how these factors have contributed to delaying the average age of emancipation among the younger population, standing in the way of their process of transition to adult life. Unsatisfied housing needs exert a direct influence on the creation of new households, as well as on the decrease in the fertility rate.

1. Late emancipation

Demand for housing is related with three important stages that make up the household cycle: creation, transformation and dissolution. This article centres its analysis on the first phase in the cycle: the creation of new households. This stage is defined by the emancipation process: when a young person leaves the family home to create a new household.

The average age of emancipation in Spain stands at 29.3 years, nearly three years higher than the European average (26.6 years). As we can see in figure 1, Spain is one of the European countries where young people leave home latest, exceeded only by Malta, Croatia, Slovakia, Italy and Greece. For this reason, late emancipation of Spain’s young people has long been an issue of special concern, predating the eco­nomic crisis.

Inhibiting factors for emancipation and the consequent increase in the average age of emancipation in Spain have a direct influence, among other factors, on the decrease in fertility rates (Leal Maldonado, 2010; Alguacil Denche et al., 2013). Within the context of countries of the European Union, Spain has one of the lowest fertility rates (1.3 children per woman, against 1.6 as the European average), and one of the highest average ages for becoming a mother (31.9 years, against a European average of 30.5 years) (Eurostat 2015).
 


If attention is focused on young people who take the decision to leave home, the impact of the economic situation and the property market on the age of emancipation can be observed. Analysing the evolution of young people’s emancipation age in Spain between the years 2000 and 2015, it is seen that during the economic boom period there was a fall, reaching 28.3 years in 2009, the lowest age in the period. This situation coincided with the highest emancipation rate since 1980 for young people aged between 18 and 34, representing 46.5% (according to data from reports by the Young Housing Observatory, OBJOVI). This change in tendency coincides with greater ease of access to cheap loans during the property boom which facilitated access to housing, despite overpricing and the high level of temporary contracts in the labour market.

However, with the rise in youth unemployment in subsequent years, high purchase prices have led to significant difficulties in maintaining young people’s emancipation plans. In many cases, there has been a “boomerang effect”, through which young people have found them­selves forced to interrupt their emancipation process and return to the family home.
 


From 2010, the average age of emancipation started to increase again, reaching 29 years after a five-year period. This change in tendency is also reflected in the evolution of the emancipation rate, which in 2016 decreased to 36.5%, ten points below the rate of 2009 (OBJOVI data).

There are two major perspectives that, if we combine them, explain the delay in emancipation age. The structural perspective places emphasis on three aspects related with the way in which the social structure is organised: increasingly prolonged education and training periods (de­laying incorporation into the world of work), precarious employment conditions and low salaries, and the high price of housing (under ow­nership and rental alike). The institutional perspective analyses issues related with institutional decisions, such as the laws and policies aimed at young people in different matters. The aim of this article is to identify the conditioning factors that explain the late emancipation of young people from both perspectives.

2. The precarity faced by young people in the jobs market

Traditionally, the prolonging of years of education and training, and the lack of stable employment, have been pointed to as structural factors inhibiting emancipation. Firstly, and as happens in all countries, the expansion of the education and training period is linked to the quest for an improved access to, and position in, the labour market. This prolongation of education brings with it a delay in young people’s incorporation into the labour market. This circumstance explains the relationship between education level and the delay in emancipation. In general terms, it is observed that the higher the education level, the later emancipation takes place (Youth Council of Spain, 2017).
 


Secondly, economic stability is a condition for the young population to be able to start up an autonomous and independent life. Residential emancipation is preceded by economic independence from the house­hold of origin, as young people become independent from the family home when they acquire economic self-sufficiency, which they achieve when they enter the jobs market. However, in Spain, the young popu­lation is characterised by a high level of labour instability and acute unemployment, with people frequently entering and leaving the wor­kforce. Flexibility of the labour market hampers stability and increases uncertainty regarding being able to afford the economic expenditure represented by emancipation.

Residential emancipation is preceded by economic self-sufficiency, but the precarity of the labour market hampers stability and increases uncertainty

Youth unemployment is at the highest values of the last 30 years, standing much higher than the unemployment rate for the overall population. According to data from the Active Population Survey of the third quarter of 2018, the youth unemployment rate (from 16 to 29 years) was 25.2%, while for the overall population it was 14.5%. The same thing happens with temporariness of employment. Some 53.1% of the young population employed in the third quarter of 2018 had temporary employment contracts, while for the overall population, the rate of temporary employment was 23.1%.

The emancipation of young people is related with temporary employ­ment and unemployment. When temporariness or unemployment rates increase, young people’s emancipation decreases. Also observed is the fact that the periods where temporariness and unemployment decline, emancipation growse. Since 2013, a turning point has occurred with a change in the dynamics of the labour market: unemployment is fall­ing, and temporary work contracts are increasing. However, the rate of emancipation continues to show a downward tendency. This situation shows that the low quality of employment generated in recent years prevents emancipation. Even if they have a job, young people cannot afford the cost of housing.

This situation of employment precarity also implies, especially since 2013, a concerning tendency among young workers towards being at risk of poverty. Despite having a job, their remuneration is so low that it does not enable them to rise above the poverty threshold, or to avoid severe or serious material deprivation. In 2016, for example, poor work­ers in Spain represented 14.1%, and young people aged under 25 years, 29.9% of the total; of employed people aged between 25 and 29 years, they represented 20.5% and among workers aged from 30 to 34 years were 18.1% (according to data from the Emancipation Observatory Re­port on Spain).

3. The housing market

The process of setting up one’s own home is highly conditioned by the housing market, as it means searching for an independent place to live. For this reason, the characteristics of this market must be added to the in­hibitory factors for emancipation related with education and training and the labour situation. Traditionally in Spain, young people have opted for owner occupancy due to difficulties in access to rental housing because of low supply. Furthermore, culturally, the idea became generalised that housing was a form of investment, and that rental tenancy was a way of losing money. This idea was reinforced institutionally because for years homebuying was promoted to the detriment of rental, with an insistence on the purchase of free-market rather than protected housing.

Therefore, the evolution of the Spanish property market has determined the residential behaviour of young people. During the decade of the property boom, from 1997 to 2007, the young population opted for owner occupancy. But with the bursting of the property bubble and the start of the crisis, a change in direction took place in residential behaviour. Since 2007, the proportion of young people acquiring their own homes has fallen while access to rental has increased.

From the year 2012, the residential behaviour of the population changed, with rental tenancy becoming the majority housing tenure re­gime among people aged 16 to 29 years. By 2016, rental tenancy among young people had reached 52.8%, whereas owner occupancy had fallen to 28.4%. In 2017, the start of a new change can be seen: rental tenancy starts to descend slightly, caused by the increase in prices which remain high today.
 


 


A separate chapter is warranted by the evolution of free occupancy of housing. From 2012, an important increase in free occupancy is ap­preciated, largely associated with the family solidarity inherent to the Mediterranean welfare state model. In Spain, the family is considered an indispensable support for guaranteeing the emancipation of young people, through diverse formulas for helping, either helping economi­cally with raising a deposit or making the monthly payments for their home, or by taking on the role of guarantor. With the crisis, free occu­pancy has taken on increasing prominence as a family support strategy for emancipation.

Therefore, it is necessary to add the lack of supply of rental housing at affordable prices, or protected housing, to employment instability. As pointed out by Trilla and López (2005), young people plan their eman­cipation strategy by accessing housing through rental in order to sub­sequently, once their employment and family situation is consolidated, access home ownership. However, the high prices and lack of supply of rental housing mean that this strategy comes up against obstacles.

When comparing the economic effort channelled into home purchase or rental, it can be seen that from 2008 to 2014, the tenure option of rental tenancy represented a lesser effort. However, since 2015, rental has represented a greater economic effort than purchasing, caused by a fall in the prices of homes for sale and an increase in prices for rental.

4. Conclusions

In Spain, access to housing among young people has become a struc­tural social problem. Unemployment and labour precarity increase the difficulties faced by the young population in accessing housing, in addi­tion to a rigid supply dynamic where owner occupancy tenure and high prices have been predominant. Despite the fact that in recent years the option of rental rather than purchase has increased among young peo­ple, which a priori could seem to be a positive indicator, this has taken place in parallel with an increase in rental prices.

Housing satisfies a basic need and is included in the Constitution as fundamental right of citizens (Article 47). However, Spain is a country where housing policy has been an economic policy, rather than a social policy aimed at guaranteeing a basic need. This institutional position­ing has meant that responsibility for sustaining young people’s eman­cipation projects has been transferred to the realm of family solidarity (Alguacil et al., 2013:205).

These aspects bear a direct influence on emancipation, i.e., on the delay in the creation of new households, as well as on the decrease in the fer­tility rate. Currently, the average age of emancipation in Spain is among the highest in Europe, and the largest proportion of unemancipated young people is also found in Spain. This situation makes necessary a reflection on the present and future of young people and their hous­ing needs, in order to guarantee that the economic effort required to pay for housing does not exceed the tolerable maximum of 30-35% of household income, and to support the creation of a pool of housing at affordable prices.

5. References

This article is based on:

ALGUACIL DENCHE, A. et al. (2013): La vivienda en España en el siglo XXI. Diagnóstico del modelo residencial y propuestas para otra poli?tica de vivienda, Madrid: Fundacio?n FOESSA/Ca?ritas.

ALGUACIL DENCHE, A. (2017a): “Jo?venes buscan piso: la distopi?a del acceso a la vivienda”, Revista Estudios de Juventud, 116.

ALGUACIL DENCHE, A. (2017b): “Revisando el acceso a la vivienda de la juventud española”, Inguruak, 62.


Other references:

CONSEJO DELA JUVENTUD DE ESPAÑA (2017): Observatorio de la emancipación. Informe primer trimestre 2018, Madrid: Consejo de la Juventud de España 

LEAL MALDONADO, J. (ed.) (2010): La política de vivienda en España, Madrid: Fundación Pablo Iglesias.

OBSERVATORIO JOVEN DE VIVIENDA EN ESPAÑA – OBJOVI (2003-2012): Informes periódicos sobre la situación de la población joven en España, Madrid: Consejo de la Juventud de España.

TRILLA BELLART, C., and J. LÓPEZ OLLER (2005): “El acceso de los jo?venes a la vivienda: una cuestio?n todavi?a no resuelta”, Documentacio?n Social, 138.

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