GINI DP 32: Income Inequality and Access to Housing in Europe

This paper analyses the relation between income inequality and access to housing for low- income households. Three arguments are developed, explaining how inequality might affect housing affordability, quality and quantity. First, it is the absolute level of resources, not their relative distribution, which affects access to housing. Second, inequality affects access to housing in different ways, due to rising aspirations and status competition. Third, the effect of inequality is mediated by housing market pressures. Multilevel-models for 28 countries indicate that: 1) there is no relation between inequality and housing affordability – the level of resources matters, rather than their distribution; 2) there exists a positive relation between inequality and crowding for owners; 3) higher levels of income inequality are associated with lower housing quality for owners and renters. Although there is a relation between inequality and access to housing, it is complex and not mediated by our indicator of house price-changes. Key words: Income inequality, low incomes, housing conditions, comparative research, Europe.