Housing price inflation and inequality : assessment of the housing market in the city of Barcelona

Abstract

The aim of this Bachelor’s Degree Final Project is to cover the house price appreciation to rise the awareness of the “laissez-faire” in the housing market on the social welfare: how it can be an origin of economic, spatial and social inequality; and, in last instance, the vulnerability of the right to shelter, because of affordability problems of low-income households. In the last decades, there has been a commodification of the housing market. Liberalization of the credit market, globalization and cuts on public housing spending of governments, has shaped the perfect scenario for a long upward trend of house prices and in which capital accumulation has created a clear dichotomy based on asset ownership. The severity of the issue has called the public authorities to take measures to tackle the Global Urban Housing Affordability Crisis. The research used has based on a long list of academic papers. However, Piketty’s work in the ‘Capital in the 21st Century’ and the paper of Adkins et al. (2019) from The University of Sydney, in which it is discussed the growing inequality and it is outlined a new asset-based class taxonomy, have defined the grounds, the development and the scope of this research. In regards to the structure of the contents, two parts can be differentiated. On the one hand, a theoretical part regarding the evolution of house prices and the inequalities resulted from higher growth rates of house prices than income growth rates. On the other hand, an assessment of the housing market of the city of Barcelona is conducted in order to have a close picture of the impact of the house price appreciation on the city and its inhabitants. The reasons why the city of Barcelona has been chosen as a case of study are: European major cities have experienced stronger house price appreciation, the City Council of Barcelona has a large and accurate database of the housing market of the city and, personally, we have experienced its impact in the first person.