Insecurity, House Prices and Political Efficacy: A Self-Reinforcing Equilibrium?

• In Event: Economic Insecurity, Policy Preferences, and Voting Behavior

Abstract

Housing policy in most developed countries strongly favours homeowners and landlords. Homeowners have higher political efficacy and turnout, which further incentivises politicians to direct policy towards them – a self-reinforcing equilibrium. We present a novel theory of housing preferences that recognizes risk in the housing market, and could suggest a way out of this equilibrium for policymakers. We argue that individuals form housing preferences based on house price and insecurity considerations, and that experiencing housing insecurity is associated with lower political efficacy and participation. Using long-run survey data from the UK we show that insecurity affects political efficacy most for renters but it also makes insecure home owners behave similarly to renters. We suggest that policymakers could target insecure homeowners and renters with new policies to address their needs, forming a potential coalition against outright homeowners. To test this, we run a survey experiment where candidates put forward housing policies that target both prices and insecurity, testing whether these policies successfully engage previously marginalized groups in the housing market.

Authors

• Tom O'Grady, University College London

• Raluca Pahontu, London School of Economics and Political Science