Does housing market segmentation ensure families a rental price benefit? The example of Frankfurt, Germany

Abstract

Housing market segments are commonly differentiated based on the structural and spatial attributes of their dwellings. A sociological perspective highlights the fact that housing market segments can also arise along socio-economic characteristics of demanders. This can explain why and how particular groups of tenants are disadvantaged or favoured in terms of the rental prices they pay for comparable rental properties. This article illustrates this idea using the example of families with minor children. Exceptionally rich data collected in Frankfurt am Main, Germany, provides detailed measurements for housing conditions. The findings indicate that families in Frankfurt are beneficiaries of segmentation, with respect to the rental prices they pay. However, the extent of the benefit varies between local and specific structural submarkets.

Keywords:

• Housing market segmentation
• rental prices
• families
• geographically weighted regression
• rental price index

Disclosure statement

The author has no relevant financial or nonfinancial relationships to disclose.

Notes

1 In this article ‘family’ is used synonymously to describe a household that includes minor children. Households that consist of adults only are not referred to as families even if the household members are related.

2 To the knowledge of the author, there are no comparable studies for the German context.

3 The following indicators were considered but not included in the analyses because of a lack of significance: number of apartments in the building, ‘lift is available’, ‘garden or terrace is available’, ‘cellar or storeroom is available’, energy efficiency, kitchen amenities, types of the heating facilities, types of doors and windows, types of the flooring, ceiling height, and ‘apartment is handicapped accessible’. Modernisation measures were not considered because of mainly missing values.

4 A combination of explanatory and confirmatory cluster analyses on the basis of Jaccard similarity measure.

5 The intercept only GWR model can be specified as follows:$\mathrm{ }{y}_i={\beta }_{0j}+u_i$, for household i in location j.

6 Socio-economic information for further household members is not available.

7 For every model, a RESET test was performed to assure that the powers of the fitted values did not explain the dependent variable, which would be a clear indicator of model misspecification (following Ramsey 1969).

Additional information

Notes on contributors

Andreas Hartung

Andreas Hartung is a research associate at the Institute for Housing and Environment, Darmstadt, Germany. He obtained his PhD in Sociology from the University of Tuebingen in 2017. His main research focus is housing and housing policy as well as analyses of individual behaviour in context of local and regional conditions.