Homeownership Externalities, Evidence From Rotterdam

Does homeownership benefit neighborhoods? We analyze two specific positive externalities of homeownership in neighborhoods: perceived safety and neighborhood satisfaction. Our analysis addresses two important questions: ëHow does the causal relation run between homeownership-rates and externalitiesí and ëIs this relationship linear in homeownership rates?í Using unique data on Rotterdamís neighborhoods over an eight year time-span, our evidence suggests that homeownership causes positive neighborhood externalities rather than good neighborhoods attracting owner-occupiers. However, the relationship does not seem to be linear, which means that from a policy-perspective, increasing homeownership-levels is not always effective in alleviating neighborhood distress and other socio-economic problems.