Planning and the Post-Pandemic City

The Covid-19 pandemic has left society dazed and confused. Self-evidently momentous, its multifaceted impacts upon the functioning and experience of city living have been swift and deep. This has precipitated a range of laudable research in planning, which, among other foci, has sought to examine how the disruption is amplifying inequities (Cole et al., Citation2020), improving urban environmental quality (Sharifi & Khavarian-Garmsir, Citation2020) and generating enhanced demand for public space (Sepe, Citation2021;Ugolini et al., Citation2020). The pandemic has also heightened interest in re-engaging planning with its roots in public health (Lennon, Citation2020;Scott, Citation2020). Here, an emerging strand of research is exploring how to better proof our cities from the ill-effects of future contagions (Bereitschaft & Scheller, Citation2020;Martínez & Short, Citation2021). Yet, there is another dimension to the pandemic that may have impacts which shake the very foundations of how we think cities could and should evolve. This results from the current great experiment in spatial reorganisation that stretches well beyond the requirement of social distancing. Specifically, never before in a time of peace have so many peoples' lives been so comprehensively decoupled from their places of work for such an extensive period of time. Indeed, while the effects of social distancing are immediately apparent in how we have found new ways to negotiate spaces, it is perhaps remote working that will have the longest impact on our cities. This was alluded to but not elaborated on in a recent superb editorial by Jill Grant in this journal (Grant, Citation2020). Hence, I propose in this short comment piece to extend this line of speculation.For centuries cities have pulled people into their orbit in search of employment, education and new experiences. Conventionally conceived as places of opportunity, cities are seen to thrive where a critical threshold of population and capital spawn dynamic and diverse economies and cultures, in which residents flourish in choice and convenience. Yet despite such lofty descriptions, for most cities it is employment that is the magnet and motor of urban land use that heavily influences where people live, shop and recreate. These two cardinal poles of home and work have long dictated how people flow around and use urban spaces: from school runs to restaurants;from retail to recreation. It is this spatial relationship embedded in the daily patterns of life that helps create and carry communities. But if people are no longer limited by their place or time of work, will it follow that they will choose to lumber themselves with the outsized mortgages, additional expenses and stresses of urban living?

The Configuration of a Multi-Pronged Housing Movement in Barcelona

The housing movement that emerged in Spanish cities during the 2007–8 global financial crisis has undergone various mutations. If at first it was led by the anti-evictions fight of the Platform for People Affected by Mortgages (PAH) and the housing groups of the 15M mobilization cycle (2011–14), the successive rent crises since 2013 and during the COVID-19 pandemic (2020–22) have given rise to new activist expressions—housing/neighborhood unions (sindicats d'habitatge / de barri) and a tenants' union—in metropolitan areas such as Barcelona. These have played a central role in housing organizing during the COVID-19 pandemic. In this article we investigate the development of the housing/neighborhood unions while understanding their relationships with other housing groups in Barcelona. We first aim to know if, how, and why they have adopted, modified, or replaced the protest repertoires used by the PAH and the tenants' union and, second, to what extent the local housing movement in Barcelona evolved into a more diverse and multi-pronged configuration. Our findings indicate significant divergences between these housing organizations but also a common and complementary field of activism that eventually proved to be resilient during the COVID-19 pandemic and beyond.

On the interdependencies between mortgage, credit card and auto loans delinquency rates: evidence from the US states plus the District of Columbia

PurposeThis study aims to explain how delinquency shocks in one type of debt contaminate the others. That is, the authors aim to shed light on the time pattern of delinquencies in different debt types.Design/methodology/approachThis study analyzes the interdependencies between mortgage, credit card and auto loans delinquency rates in the USA from 2003 to 2019, using a panel VAR-X, the panel Granger causality tests and the Geweke linear dependence measures. The authors also compute the impulse response functions of a shock to one kind of debt on the others and decompose the variance of the forecast errors.FindingsThe authors find a statistically significant bidirectional Granger causality between the delinquencies. The Geweke measures of linear dependence and the Dumitrescu and Hurlin Granger non-causality tests support that mortgage predominantly causes credit card and auto loan delinquencies. Auto loans also cause credit card delinquencies. The impulse response functions confirm this pattern. This scenario aligns with a sequence where debtors consider rational first to default on credit cards, second on auto loans and only on mortgages in the last instance. Indeed, credit card delinquencies Granger-cause delinquencies in other debts when it occurs.Originality/valueTo the best of the authors' knowledge, this is the first study to focus on the temporal pattern of delinquency rates for all the US states, using panel data. Furthermore, the results call for policymakers to design regulations to break the transmission channel from debt delinquencies.

An alternative interest-free home financing model

PurposeThis study aims to determine the relationship between the banking industry and home financing by conducting a regression analysis between the mortgage loan interest rates and the number of housing sales, and based on the results of the analysis, this paper proposes a new and alternative interest-free home financing model by directing the savings of the people in pension funds into real estate investment funds (housing fund), specifically established to provide a bank loan-free home financing solution. Diminishing Musharakah (partnership) is also integrated into the model from an interest-free and saving economy perspective. The model developed also provides opportunities to increase the size of the real estate investment funds and provide alternative investment tools to pension funds.Design/methodology/approachWhile the global financial crisis resulted from the mortgage crisis in the USA in very recent history, the world has been experiencing the evolution of a new health crisis, COVID-19, a pandemic that has been heavily affecting the global economy in the past two years. The housing sector is among one of the major industries that may be affected by this new global crisis because of the high dependency of the current home financing models on the banking industry, which is carrying the burden of the pandemic. The rapid increase in global debt volume, housing prices, inflation and interest rates are observed as bad signs that may increase the risks of the housing industry. A potential decrease in purchasing power because of high inflation rates may decrease the welfare of people and reduce the income level. While the total debt keeps increasing worldwide, and central banks are considering increasing the interest rates, any potential default in the repayment of the mortgage loans may trigger a new mortgage crisis as the bank loan-dependent financing system of the housing industry lacks alternatives. Thus, a relationship analysis between the banking and housing sectors is required to figure out the dependency of home financing on the banking industry, and a new sustainable home financing model is needed to protect the housing industry and the homebuyers from a negative effect of a new possible financial crisis.FindingsThe results of the analysis exhibit that there is a strong negative relationship between the mortgage loan interest rates and the total home sales. As a result, the new model is suggested and this new model is tested in an emerging country, Turkey, with the real housing sector and economic data where the interest rates are high and the home prices are booming. The results exhibit that the new interest-free home financing model provides a more economic financing solution compared with the high financing costs of bank loans.Research limitations/implicationsThe model proposed in this study is unique, and there is no such system that has integrated the pension funds, the real estate investment funds and diminishing partnership in one ecosystem. It is expected that the model may decrease the dependency of home financing on the banking industry and decrease the risks of the housing sector in the case a new financial crisis occurs.Social implicationsWhile providing a sustainable and alternative interest-free home financing tool, the model also provides individuals who do not prefer to use any bank loan because of religious or other concerns an opportunity to purchase their houses.Originality/valueThe model proposed in this study is a unique and original model that aims to provide a bank loan-free, sustainable home financing solution by integrating the pension funds, real estate investment funds and diminishing partnership in one ecosystem.

Determinants of House Prices and Housing Affordability Dynamics in the Czech Republic

The property market in Central European Region countries share a number of common features among which privatization, restitution of property, massive regulation or underdeveloped financial market all of which contributed on persisting property market imbalances and continuous dynamic changes. These changes have recently been significantly exacerbated by the presence of the Covid-19 pandemic, the war in Ukraine and a significant increase in energy prices (heating of apartments and houses, production of building materials, etc.). It is currently difficult for investors and people looking for their own housing to predict the future development of housing prices and housing affordability. This article analyses the housing market trends in this region taking the example of the Czech Republic using unique primary statistical data. It offers a deeper insight into the trends present on this market, identifies significant determinants of housing prices and evaluates changes in housing affordability. Our research reveals why the property market trends may contribute to opening inequality scissors and thus economic stability. This research is based on primary statistical data mined by EVAL software which allows to gather information about the development of the real estate market from real estate advertising.

New survey and initiatives to support patients living with cancer

[...]in Ireland, a new bill, called the Central Bank (Amendment) Bill 2022, was brought before the Seanad (upper house of the national Parliament) on Oct 18, 2022, seeking to make sure that survivors of cancer are not refused access to economic products, such as insurance and mortgage protection, due to their cancer history. According to the Irish Cancer Society, people affected by cancer in Ireland are three times more likely to find it difficult to find insurance and are twice as likely to have difficulty in securing a mortgage compared with those without cancer. Bhatt commented, “The efforts in Ireland to improve access for individuals who have experienced cancer to mortgages and insurance takes an interesting and important step toward looking beyond the proximal need for chemotherapy, antibiotics, surgery, and radiotherapy—and seeks to support how people ‘live’ beyond cancer.”

The impact of external factors on housing prices in Lithuania

Purpose>This paper aims to identify the external factors that have the greatest impact on housing prices in Lithuania.Design/methodology/approach>The econometric analysis includes stationarity test, Granger causality test, correlation analysis, linear and non-linear regression modes, threshold regression and autoregressive distributed lag models. The analysis is performed based on 137 external factors that can be grouped into macroeconomic, business, financial, real estate market, labour market indicators and expectations.Findings>The research reveals that housing price largely depends on macroeconomic indicators such as gross domestic product growth and consumer spending. Cash and deposits of households are the most important indicators from the group of financial indicators. The impact of financial, business and labour market indicators on housing price varies depending on the stage of the economic cycle.Practical implications>Real estate market experts and policymakers can monitor the changes in external factors that have been identified as key indicators of housing prices. Based on that, they can prepare for the changes in the real estate market better and take the necessary decisions in a timely manner, if necessary.Originality/value>This study considerably adds to the existing literature by providing a better understanding of external factors that affect the housing price in Lithuania and let predict the changes in the real estate market. It is beneficial for policymakers as it lets them choose reasonable decisions aiming to stabilize the real estate market.

Differences in Perceptions of the Housing Cost Burden Among European Countries

In this article we perform a comparative analysis of the self-reported perception of the housing cost burden as an indicator of potential financial distress. We employ EU-SILC data on five European countries – France, Germany, Italy, Spain and the UK – for years from 2005 to 2010. Wide differences emerge between Germany, France and the UK on the one hand, and Italy and Spain on the other. Estimation of the housing cost burden by means of logit models allows us to relate the probability of a high burden to both micro and macro-economic variables and to identify differences among countries. As for socio-economic variables, our results reveal the existence of life-cycle effects and a lower burden for homeowners. As for aggregate variables, GDP growth and higher consumer confidence contribute to reducing the probability of a high burden, whereas high levels of unemployment and inequality contribute to increase it. At country level, we observe differences in the size of the impact of the explanatory variables on the probability of perceiving a high burden, especially for covariates such as age, homeownership status and education.

Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership. By Keeanga-Yamahtta Taylor,. Chapel Hill: University of North Carolina Press, 2019. xiv + 349 pp. Illustrations, notes, bibliography, index. Cloth, $30.00. ISBN: 978-1-469-65366-2

Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership chronicles an often overlooked period in the affordable housing literature to show how the shift from racially exclusive housing policies in the 1940s and 1950s (where it was nearly impossible for Blacks to buy high-appreciating homes using low-cost and low-risk federally insured mortgages) to a regime of more inclusive policies in the late 1960s and 1970s laid the foundation for Blacks to lose massive housing wealth decades later during the 2007–2009 Great Recession. [...]instead of finding ways to increase the supply of public housing, the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) adopted federal housing policies, which continue to this day, that depend on public-private ventures (like Housing Choice vouchers) to house the poor. [...]the book's greatest contribution to the affordable-housing literature is Taylor's blistering account of Nixon administration decisions that forever ceded control of federal housing policies to private mortgage bankers, real estate agents, home builders, speculators, and appraisers (a cabal I label the real estate industrial complex, or REIC).

How Much Are Borrowers Willing to Pay to Remove Uncertainty Surrounding Mortgage Defaults?

Using a large, non-student sample, we assess and differentiate between borrowers’ Risk Aversion and Ambiguity Aversion levels and their willingness to pay to resolve a mortgage default settlement negotiation. Ambiguity Aversion is found to be negatively associated with willingness to pay for borrowers with high financial literacy in both the gain and loss domains, whereas personality traits matter more for borrowers with low financial literacy. This finding is important to policymakers in that they should adopt differential resolution strategies for defaulting borrowers based on these intervening variables.

Mortgage delinquency during COVID-19: do financial literacy and personality traits matter?

Purpose>Mortgage delinquency has become a major crisis following the COVID-19 pandemic. This study explored mortgage delinquency antecedents, focusing on two individual-level factors: financial literacy and personality traits.Design/methodology/approach>Using a large sample of 2,511 consumers, we examined the direct effect of financial literacy and its interaction with personality traits to predict mortgage delinquency based on logistic regression analysis. We further provide several robustness tests to validate our findings.Findings>We find that financially literate consumers are 6% less likely to delay their mortgage repayment during the COVID-19 pandemic. Moreover, personality traits such as neuroticism and extroversion positively and conscientiousness negatively moderate the given linkage between financial literacy and mortgage delinquency.Practical implications>Banks and financial companies may devise relevant policies to reduce mortgage repayment by knowing the interplay between financial literacy and personality traits. Personality traits can be considered one of the parameters while sanctioning mortgages to prospective customers.Originality/value>Our research examines the linkage between financial literacy, personality traits and mortgage delinquency based on a large nationally representative sample. Our findings suggest that personality traits moderate the effect of financial literacy on mortgage delinquency.

The cost of steering in financial markets: Evidence from the mortgage market

We build a model of the mortgage market in which banks attain their optimal mortgage portfolio by setting rates and steering customers. Sophisticated households know which mortgage type is best for them;naive households are susceptible to banks' steering. Using data on the universe of Italian mortgages, we estimate the model and quantify the welfare implications of steering. The average cost of the distortion is equivalent to 16% of the annual mortgage payment. A financial literacy campaign is beneficial for naive households, but hurts sophisticated ones. Since steering also conveys information about mortgages, restricting steering might result in significant welfare losses.

Consumer Bankruptcy Prediction Using Balanced and Imbalanced Data

This paper examines the usefulness of logit regression in forecasting the consumer bankruptcy of households using an imbalanced dataset. The research on consumer bankruptcy prediction is of paramount importance as it aims to build statistical models that can identify consumers in a difficult financial situation that may lead to consumer bankruptcy. In the face of the current global pandemic crisis, the future of household finances is uncertain. The change of the macroeconomic and microeconomic situation of households requires searching for better and more precise methods. The research relies on four samples of households: two learning samples (imbalanced and balanced) and two testing samples (imbalanced and balanced) from the Survey of Consumer Finances (SCF) which was conducted in the United States. The results show that the predictive performance of the logit model based on a balanced sample is more effective compared to the one based on an imbalanced sample. Furthermore, mortgage debt to assets ratio, age, being married, having credit constraints, payday loans or payments more than 60 days past due in the last year appear to be predictors of consumer bankruptcy which increase the risk of becoming bankrupt. Moreover, both the ratio of credit card debt to overall debt and owning a house decrease the risk of going bankrupt.

Does financial literacy “grease the wheels” of the loans market? A note

PurposeWhat is the impact of financial literacy on the lending activity of banks? Based on the results of the S&P Global FinLit Survey for an extensive sample of countries, this paper aims to provide the first global test for the impact of country-level financial literacy on the lending activity of commercial banks.Design/methodology/approachThe authors use data on financial literacy by country from the S&P Global FinLit Survey that was completed in 2014 and lending activity and macroeconomic control variables data from the World Bank from 2015 to 2017 to estimate the cross-sectional effect of financial literacy on the importance of loans and of non-performing loans, using different estimation methods.FindingsThe results show that, first, financial literacy favors lending activity, contributing to enhance the importance of credit in the economy. Second, financial literacy prevents bad loans from building up, thus reducing credit risk and favoring the quality of the credit portfolio of banks. These results are robust to several controls for macroeconomic conditions and the quality of institutions. They are also robust to different estimation methods.Research limitations/implicationsThe evidence of the positive (negative) impact of population financial literacy on the quantity (poor quality) of loans suggests that the efforts to enhance the financial literacy of the population contribute to the sustainable development of the financial sector and economic growth.Originality/valueThe paper extends to an international and country-level the available evidence of the consequences of the existence (or lack of) of financial literacy for the lending activity of commercial banks, focusing on the amount of credit granted and the quality of such credit. Thus, the paper provides an exploratory analysis of the impact of country-level financial literacy on the lending activities of commercial banks.

Green Mortgages, EU Taxonomy and Environment Risk Weigthed Assets: A Key Link for the Transition

The need for a quick and radical green transition gives a key role to the financial system as the main source to fund the change. This debate also involves the development of banking regulation tools able to serve the transition. Building on previous works, we propose a method to weight banks’ assets that combines conventional financial risks and environmental risks to calculate prudential capital requirements, and we apply it to the EU Taxonomy’s technical screening criteria to build an environmental risk indicator based on the buildings’ energy consumptions. We show how to calculate the tool endogenously for the taxonomy sections related to buildings (new construction, purchase of building, renovation), thus proving its immediate enforceability, using data from the Lombardy’s housing stocks. Finally, we conduct a stress test for the Italian banking system showing that our proposal would be an effective incentive for the banks to fund the green transition of the construction sector. Disclaimer: The views expressed are those of the authors and do not involve the responsibility of the Bank of Italy or RSE.

FINANCIAL UNAVAILABILITY OF HOUSING IN THE CZECH REPUBLIC AND RECOMMENDATIONS FOR ITS SOLUTION

The paper deals with the issue of unavailability housing in the Czech Republic, which affects an increasing number of people. As a result of the covid-19 pandemic, there has been a significant increase in property prices and widening the price to income gap, which mainly affects young people. This paper describes the basic causes of this undesirable phenomenon in society and provides recommendations that should be quickly adopted by the state and municipalities to improve the situation as we see a risk of an increase in social tension in society and a deterioration in the availability of employment for low-income professions.

COVID-19's impact on real estate markets: review and outlook.

As symbolized by vacant office buildings, empty shopping malls and abandoned flats in metropolitan areas, the new coronavirus disease 2019 has severely impacted real estate markets. This paper provides a comprehensive literature review of the latest academic insights into how this pandemic has affected the housing, commercial real estate and the mortgage market. Moreover, these findings are linked to comprehensive statistics of each real estate sector's performance during the crisis. Finally, the paper includes an outlook and discusses possible future developments in each real estate segment.