GGR 357 H1F Geography of Housing and Housing Policy

1. GGR 357 H1F Geography of Housing and Housing Policy  Session 9 June 16, 2008 The meanings of “home” and attitudes towards homeownership DR. AMANDA HELDERMAN

2. Announcements Paper due this Friday before 5pm: • Helderman@geog.utoronto.ca • Drop box @ Office of the Department of Geography • Both digital version (MS WORD only) and hard copy • Make sure it is clear that it is for Amanda Helderman and that it is term work for GGR357H1F Summer job/ hard to make the deadline? • You learned about this date on May 12. You have signed up for this course so should be committed to your education • You could turned it in earlier if Friday is inconvenient for you • E-mail digital copy • Fax hard copy: 416-946-3886, make sure it is clear that it is for Amanda Helderman and that it is term work for GGR357H1F • Late penalty 5% per day.

3. Introduction • Many meanings of “home” • Many meanings of homeownership • Alternative meanings of the home… • …such as economic activities in the home • Societal developments (individualism) • Implications for the place housing takes in personal lives • Understanding the meaning of home in developing countries and for immigrants • Consequences for residential relocations, housing preferences, and search behaviour

4. Meanings of home… Definitions of housing according to Bourne, Dieleman etc. • Physical aspects: shelter, bricks and mortar • Economic good or commodity: housing can be exchanged, has value • Investment good or asset (wealth) • Sector of the economy • Social or collective good: home base/ node in social networks access to other services • Building block of neighbourhoods and communities • Bundle of services 

5. Bundle of services • Physical facility • Shelter • Consumption of services: public, schools, environment etc. • Location/ accessibility

6. Housing services • Shelter from the elements • Value or wealth  equity for owners • Shelter from taxes (capital) • Accessibility to services (e.g. schools), work, neighbourhood • Social status • Rights to privacy, exclusion

7. Home • Material dimensions • Spatial dimensions • Meaningful dimensions

8. Material dimensions • Physical state • State of repair • Biological/ Chemical exposure • Costs

9. Spatial dimensions • Immediate environment • Proximity to schools, recreation, health services, employment opportunities

10. Meaningful dimensions • Permanence/ stability • Social status (housing tenure) • Prestige • Pride • Identity • Saunders, 1990 • Place to venture out into the world • Place of economic activity

11. New functions of the home as a place for work or business (Ventakesh et al., 2003) • Activity Centre (household chores) • Entertainment Centre (computer games, TV) • Work Centre (telecommuting, working at home, home-based businesses) • Communication Centre (phone, E-mail) • Shopping/ Financial Centre (e-shopping)

12. New functions of the home as a place for work or business • Family Interaction Centre (meeting place for household members) • Information Centre (obtaining info from media) • Learning Centre (e-learning) • THE NETWORKED HOME

13. Societal developments • Cultural changes • Sociological changes: Individualism (increased autonomy of individuals, both in and outside the workplace) • Labour market developments • Longer working hours: increasingly difficult to combine work with household tasks for many • Status: longer work hours to make more money (rat race)

14. Role patterns • Trade off families: negotiations about tasks in the household • Rigid families: traditional role patterns

15. Labour market developments • Changing labour markets • Flexibility: increasing short term labour contracts • Not constantly participating in the labour market: sabbatical year, not always enough work in certain sectors of the economy • Increasing pressure on the job • Combining different tasks of dual earners • Flexible working hours, flextime • More autonomous approach to work • More self-employment (start in 50-85% of cases at home)

16. Economic activities in the home • Start-ups • Limited costs, no search costs necessary • Limited risks, knowledge of the area • Easy to start, no search efforts necessary • Home as an incubator for businesses

17. Historical approach • Before the industrial revolution, the home was in most cases the place where people spend both their work hours and their leisure time • During and after the industrial revolution, the home became the place where people solely ate and slept • The new millennium: fast growth of technological possibilities such as high-speed Internet making telecommuting possible

18. Spatial implications of home based businesses • Home more strongly becomes the centre of the entrepreneur’s/ household’s daily urban living space • Work, recreation, social activities all have the home as the central node • The home is the starting point of many activities but also the place to venture out into the world to undertake various activities

19. Hägerstrand Problem: many competing tasks, in household career and in labour career… • The home as the hub in a network of frequently visits nodes: work place, school, family, friends, shopping, recreation... • There are limits in time and space to what a person can do in a day and thus on a regular basis

20. Hägerstrand Constraints who limit human activity in time and space: • Capability constraints (you can’t be in multiple locations at the same time) • Coupling constraints (combination of work, care and leisure time may be difficult) • Authority constraints (not everyone is allowed to go everywhere at any time: opening hours, segregation)

21. Home based businesses as a solution to time and place pressures • Combining tasks made easier • Time efficiency of working at home (also a cost aspect in a way) • Limited travel time • Low housing costs for business (often a reason for starting a business at home)

22. What type of businesses? • Activities that do not require that much floor space (indoors) Compare driving schools, other on-the-road • Many ‘invisible’ home-based businesses: book keeping in the attic • Amount of floor space use is correlated with ambition level and growth of the company

23. What type of businesses? • Smaller average income than salaried workers • Often older households/ individuals • Duration of residence long • Business and personal services. Financial advice • Knowledge sector of the economy • Taxi drivers • Few have proper plans to grow beyond the home-based business, the situation seems to be born from the convenience of easily combining tasks inside and outside the home • Also many agrarians

24. What do the homes look like • Great diversity in types of homes that house home-based businesses • Many are not recognizable as a business • Small software agencies who work for another companies may have a small sign on the building but nothing else • Galleries, nail studios etc who rely on their clientele to visit them, may be a bit more visible • If they are visible, they often also are situated in a highly visible location relative to roads and to other buildings

25. Rules and regulations • Threshold levels: <30% of area home • No polluting activities in residential areas • Many older neighbourhoods are simply designed for residential purposes only (the legacy of rules and regulations from the past) • Not all government bodies are flexible enough to renew building permits where necessary

26. Implications for planners • Diversity • Mix of functions within home and within neighbourhood; purposes should be complementary • Prevention of functionally segregated neigbhourhoods in urban centres • Social cohesion and turnover • Liveliness (social safety or at least a sense of safety) • Vitality • Better threshold population/ market for services in the neighbourhood

27. Implications for developers and planners • Helpful for planning neighbourhoods? • Multi-functional building methods • Flexible building techniques (high ceilings, easy to make additions, moveable walls) • Multiple uses of space • Existing structure in neighbourhoods determine the extent to which home-based businesses are succesful: enough space for entrepreneurship, not just for residential functions • Tenure structure: enough property in private hands

28. Implications for developers and planners • Synergy possible if there are meeting places for entrepreneurs: face-to-face • Service points • Time share offices (meeting customers) • Specific building styles of multi-functional homes? • Separate entrance for household members and clients? • Flexible rooms/ ceilings

29. Implications for developers and planners • Individual design • Flexibility in design (family expansion or business expansion, continuously renewed building permits) • So far: demand from municipalities, not from entrepreneurs

30. Location specific capital • Hinders home based businesses to be footloose • Suppliers • Sunk investments (machines, adapting home for business activities) • Friends, family, local suppliers • Personal business contacts

31. Location specific capital • Keep-factors • Embeddedness (Granovetter, 1985) • Intangible assets: hard to take with you to a new place (RISK!) • Consequence: searching locally, minimizing risk. Relocation decision not only household decision but also a business decision!

32. Neo-classical approach to entrepreneurship • Homo Economicus • Maximizing profit • Minimize costs • Perfect knowledge/ information • Maximizer

33. Behavioural approach • Homo psychologicus • Decisions are made in an only partly rational fashion • Satisfier

34. Satisfier • Home based businesses generally less satisfied with housing for company than businesses located outside the home • Hard to keep work and private separate

35. Consequences for search and relocation behaviour • Only 7% of home-based businesses is looking to relocate within 5 years • Some studies report 20% are expecting to relocate within 2 years, only 10% have concrete plans (less than household relocation!) • Not many home-based businesses generally foresee a move in the near future • Entrepreneurs more often have housing reasons as a motive for moving than business reasons

36. Relocation behaviour • If the plans to move are business decisions, entrepreneurs do not necessarily want to remain home based • Attachment to the home often prevents the business relocation plan to be carried out • More than half of all home-based businesses who want to relocate, want to stay home-based

37. Relocation behaviour • Sunk investments (machines, adapting home for business activities) are assumed to represent location specific capital that is known to act as a keep factor • But specific investments in the home for the business generally do not make a business more likely to stay in the same place than other businesses who have not made such investments while household situation, children do! • Entrepreneurs demand few specific housing characteristics for their business: size!

38. Relocation behaviour • A need for space to expand is a push factor • Housing characteristics may also be push factors • A small home, a rented home, an apartment all make relocation more likely

39. Search behaviour • Home region is appreciated more than other nearby regions: neighbourhood effect • Where the entrepreneur is from may be the most deciding factor in deciding on a location for the business • Less search costs if entrepreneur focuses on his/her own region • Searching in own region minimizes risk • Starters are strongly dependent on home advantage: local external resources (friends, family, knowledge of suppliers etc.), does not automatically lead to optimal location choice

40. Changes in search behaviour • Location advantages may change during the business life course • At the start, a company is less pre-occupied with the question where the business will locate and more with how to finance, the product, the market, rules and regulations, permits, and perhaps employees • Once started at home, the home often remains popular, even if the business (/household!) relocates

41. In conclusion about home-based businesses • Location specific investments mostly play a role on the household level (schools children) and less on the business level (sunk costs) • Most want to continue as a home-based business after a potential relocation • This suggests that having a home-based business is a life style choice rather than an economic necessity • The characteristics of the home also are important: anchors in ‘neighbourhood economies’ seem to be owner-occupied and large enough to accommodate a household and a small business

42. Developing countries • Extremely common to have a home-based business in many countries in the Third World • Informal-sector activities • Cooking, arts and crafts

43. Home-based businesses in Third World countries • More emphasis on shelter • One in four families use their home for other activities than just shelter (economic!) • Many families only have one room at their disposal • Crowding is a common problem • Virtually all sectors are represented in the informal economy, except heavy industry • Female-headed households and larger households with older, less-educated heads are most likely to use their home for income generation • Important for immigration countries

44. Rules and regulations in Third World countries • Also surprisingly many parallels when it comes to official zoning • In compound houses however, these are largely ignored because of the scale of the phenomenon and lack of enforcement • Gvts. deter movers from buying homes if it is known that they will want the housing for income generation • If home-based businesses were condoned and recognized in building codes and regulations, it would make it easier to build housing

45. Many parallels between both worlds • Home-based businesses in the Third World also are most often based in larger homes, although quality of homes with home-based businesses are not as good as regular homes • Businesses are location specific • Life style choice/ Way of life • Decision to move involves not only household decision or business decision, but both!

46. Meanings of homeownership • Both in the Western world and the Third World, home-based businesses and other such alternative meanings of the home are attached to owner-occupied homes • Stability • Long-term commitment • Build-up of equity

47. Levels of homeownership (%) 2006 53.4 65.1 67.6 71.0 68.4 From census 1991, 1996, 2001 & 2006: Statistics Canada

48. Meanings of homeownership • Approximately 68% homeownership in Canada in 2006 • Free market principle dominant in Canada, so important to discuss alternative meanings to homeownership from the ones we have discussed in previous sessions… • Which were…

49. Individual advantages to homeownership • Building up equity from a home • Housing quality/ Neighbourhood quality • Customized aspects/ alterations • Control of individual housing situation/ independence • Continuity/ stability • Status • Emotional value

50. Individual disadvantages to homeownership • Financial risk: housing market • Financial risk: labour market position • Responsibility for maintenance • Impedes residential relocations: • Financial commitment • Transaction costs • Sense of security, personal environment • Emotional attachment • Stable households