Morten Skak

Restricting ownership of vacation homes.

One way to enjoy or consume the countryside is through a weeks vacation in a cottage or vacation home. The consumer may be the owner of the vacation home or may rent it. This paper focuses on the effects of restricting private ownership of vacation homes with limited supply. It is not surprising that under realistic assumptions a free market will lead to the trading of vacation homes, whereby they will eventually be owned by high-income consumers. In the model presented it is further shown that such trading will increase the demand for weeks in vacation homes, raise the price on the rental market and reduce the number of consumers with this kind of access to the countryside. Thus unrestricted trade may be welfare-reducing and some kind of ownership restriction may have positive welfare effects. However, other ways to secure public access to the countryside might well be preferable to ownership restrictions.

Rent Control and Misallocation

Rent control is still an important type of government regulation of housing markets in many countries and numerous researchers have studied its implications for allocation, welfare and investments in housing. The present paper aims to improve our understanding of the effect of second-generation rent control when it is applied only to one sector of the rental market. It is diagrammatically shown that the welfare effects are very different between a universal and a limited application of rent control. Studying the Danish case of second-generation rent control, lower rents are found in controlled sectors and a minor increase of the rent in the uncontrolled sector. Using the area of living space in the dwelling as a measure for housing consumption, evidence is also produced of both overallocation and underallocation of housing in the rent-controlled sectors; as envisaged by economic theory.

Housing Tenure and Psychological Distress

Abstract Housing policies in a number of European countries promote homeownership for low income households. Previous economic research on mental health seems to indicate that homeownership is positively related to better health outcomes, but little research has been undertaken on the relationship between homeownership and psychological distress. The present study attempts to fill some of this gap by deploying a rich set of controls and a range of regression methods using data from three Danish living conditions surveys. A negative connection between homeownership and psychological distress is found, especially for the low income group.

House prices and land regulation in the Copenhagen area

We analyse house prices from 1992 to 2011 in the metropolitan area of Copenhagen. In line with most other metropolitan areas in Europe, Copenhagen house prices showed solid increases during this period until 2007 when a downturn in prices began. The price gradient from the centre of the metropolis to the outskirts also became steeper over these years. We investigate the influence of land regulation on this development and find indications of an upward pressure on house prices from restrictive land regulation at the municipal as well as the national level.

Projecting Demand for Rental Homes in Denmark

Abstract For a number of years, homeownership rates have been increasing along with increasing GDP per capita in most European countries, but not in Denmark after 2000. The present paper takes a closer look at the Danish development, and gives some indications of the future demand for rental housing. The results indicate that future rental demand will come from an increasing share of persons of old age and young people in education plus a tendency for more ‘single living’. However, with increasing real incomes for a broad ‘middle-income’ group, the projection gives a higher homeownership rate in the future. It is believed that the structural traits found in the Danish housing market and the technique employed is of interest to housing researchers in other countries.

The German Growth Miracle: A Lesson for Poland?

After the disaster of World War II, the Federal Republic of Germany experienced impressive growth for more than two decades. From a level of per capita income below half of the leading industrial nation, the United States, in 1950, the Federal Republic narrowed the income gap to about 80 percent over the following twenty years. This article discusses the possibilities and needed economic policy for a similar catch-up of Polands living standards with those of the European Union over the next two decades. The conditions for the German growth miracle in the 1950s and 1960s are analyzed, and structural similarities with and differences from the present Polish economy are identified. It is concluded that no determinism exists. The Polish economy may have the potential for strong growth, but this potential will only be realized if Poland succeeds in creating a growth-promoting environment.

Owning, Letting and Demanding Second Homes

An increasing number of households consume housing beyond the primary home as owners of a second home. Economic studies of second homeownership are still very scarce, and the present empirical study fills this gap to some extent. It is based on Danish survey data combined with administrative register data and presents estimations of the probability of owning a second home, the decision to let the second home and the number of let weeks per year. Also income elasticities for primary and second housing demand are estimated. We find a conventional monotonic increase in demand elasticities for primary housing demand for non-owners of second homes; however, owners of second homes have the highest income elasticity in the middle income group.

Does Owner-Occupied Housing Affect Neighbourhood Crime?

Economic as well as sociological theory bring some support to the hypothesis that personal home ownership per se makes individuals more responsible to society values and hence less inclined to commit offences against property or commit other kinds of crimes. Departing from this hypothesis, the present study seeks to provide empirical evidence for a link between levels of crime and local residential ownership rates. In the framework of a linear regression model and based on Danish municipality data, we establish empirical evidence for a negative relationship between local home ownership rates and local crime rates even when controlling for a broad range of economic and demographic variables.

Small Area Variation in Homeownership

The aim of the study is two-fold. First, it adds to the existing state-of-the-art housing research by suggesting the implementation of new econometric methodology. Specifically, the study adds to earlier studies of homeownership by adding spatial impacts. It advocates simultaneous adjustment for intra-municipal correlation and heterogeneity as well as spatial spillover patterns between municipalities. It concludes that ignorance of controlling for intra-municipal correlation, heterogeneity and spatial spillover skews conclusions regarding effects of the determinants of homeownership. Furthermore, it finds that endogenous as well as exogenous spatial spillovers are essential parts of specifying demand for homeownership. Specifically, the demand for homeownership spills over and stimulates demand in neighbouring municipalities, and house prices and incomes exert positive effects on demand for homeownership in neighbouring municipalities. Second, as is clear from the above empirical conclusions, the study adds to existing empirical research and knowledge.