Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 17, 2023 erstellt
Description:
One of the most important financial choices households make is to decide whether to rent or buy a home. This paper uses a life-cycle model to analyze a financial contract that transforms investing in housing from binary to multinomial choice. The financial contract is called Partial Ownership (PO). The share of new homes sold with PO is increasing in several countries. China introduced PO in Huai'an and Shanghai in 2007. In 2022 there were approximately 140,000 PO units just in Shanghai. In Norway, 10% of national sales of new homes included PO in 2021. Our main results are undoubtedly positive. PO improves welfare by allowing for gradual adjustments in the housing market: The welfare benefits of PO are highest for less fortunate households that are either just below the regulatory constraints that exclude them from the mortgage market--or just above so that they become high-risk borrowers. For households aged 25 to 35--the primary users--we estimate the average willingness to pay for PO to be between 23% to 8% of disposable income