Housing production affects the housing market and with it indirectly also our habitat.

Socialgeographical perspective

From view of social geography a view of housing production for several reasons is worthwhile itself:

• Theoretical concerning with the first purely economical decision-making process owners can supply with special consideration of the Allokationsprozesses explanations for the spatial sample of the built (living) environment.

• A Dynamisierung of the Allokationsprozesses leads to would background the reproduction of spatial structures: Not only, because the giving before-coins/shapes frequently the new; also the given land use always competes with alternative types of use. Once met location decisions can be revised, dwellings can be torn off or their function can e.g. into trade purposes be umgenutzt. To that extent new building production does not mean automatically also a amount increased.

• Long-term effects have way of housing production on the housing market with its structurally before-coined/shaped regional structure. Apart from the fundamental longevity of a dwelling the calculation of the construction costses already implies the approximate process of the rent appointment.

(For the same reason housing production represents also an important point of attack of a foresighted housing policy)

Condition factors

"The housing industry and the housing market can be regarded not isolated, but be seen must in a larger connection. To it it belongs that those are to be considered the housing market upstream markets for the soil, the building industry and (long-term) the capital."

(Jenkis 1996, manual of the housing industry, P. 73)

Housebuilding as locomotive of the national economy

Driving Kraft, which, one awards to the construction industry expresses itself not only in above average growth rates, but also in a likewise rising price index. The causes for this to fathom, it appears all the more urgent if one considers that the construction costses in housebuilding constitute the majority of the investment capital which can be applied.

An explanation is in the traditional division of labor between owner to search craftsmen and later houseowner itself since center the 19. Century developed. The possibility of the cost saving is very small in the context of these mutual dependence.

From the role of the building industry as readiness industry inevitably its below average (small portion results fix capital contrary to the Human This does not permit long the rationalization degrees of other economic sectors, particularly it on seasonal, weather-conditioned fluctuations is dependent. In addition come a housing and a town-planning policy of many years, which were with their product acceptance at nearly each price a central condition of the missing concentration in the building sector.

A further reason for above average rising of the construction costses lies in the strong business fluctuations of the building industry, whereby in phases of the boom inflationary overheating features arise. This factor is overrated occasionally, does not explain it nevertheless not, why the building costs in recession phases to similar extent not to sink.

It can be assumed thus that it is above all the specific organisational structure of the building industry, which has substantial effects on the rent development.

The capital market

If the construction costses determine the majority of the investment sum in housebuilding, which can be applied, then the height of the rent arises as a result of the respective market interest over the resulting annuity. Here it plays first no role whether the owner can use own capital funds predominantly, or itself the money on the capital market constituted must. If one regards housebuilding as investment, then the net yield which can be gained over the rent competes with the usual market interest and - as also during a predominant outside financing - at these will orient itself.

The fact that the interest charges of the construction costses constitute the majority of the costinduced rent is undisputed. Controversy opinions exist however over it, how its portion develops within the life cycle of the dwelling, in particular if after 10-30 years the mortgage paid off. While for the owner of house the obligation to pay interest expires, the tenant far rent must pay. It would contradict however practice, one to this an entirely different character would suddenly attribute (e.g.: the tenant pays the first 15 years the interest of the before-shot capital, thereafter its writing-off). This becomes clear, if one clarifies that no tenant is bound to its dwelling. It is exchangeable and acquires by the renting payment no co-ownership at the dwelling. The lease does not regulate a hire-purchase, but the rental business of goods capital.

During the entire life span of the dwelling the tenant interest pays on it borrowed the goods capital. For the owners increases during the disencumberment period the portion of interest-bearing own capital funds of the total capital, to it finally the entire (net) rent as interest charges of own capital funds, i.e. now completely it belonging dwelling, to book can.

From this central meaning of the interest charges within one predominantly as utilization of capital understood housing industry result as consequences for the housing market:

• The development the new building (costing) rents can roughly be measured by the product of construction costses and market interest. The intensity of new building production will depend essentially on as far the respective situation on the housing market suggests the covering of the costinduced rent.

• The amount of rent in the housing stock interest fluctuations on the capital market affect themselves rarely directly over the costinduced rents out (Hypotheken are usually assigned to fixed interest rates), however let high interest by break-downs in building production the rents indirectly fast rise, as at the beginning of the 80's was to be seen.

• An above average rise of the rents is structurally taken into account: The obligation to the raising of credit einserseits and hope on the "Altbausurplus" due to fast rising replacement costs on the other hand structure the business with housebuilding.

The soil market

Within housing production (urban) the soil plays a special role: Although it is booked of owners as a component of production costs, then it is nevertheless no means of production, but it is the condition for it, which can be built.

Since the soil is produced (it is simply found), does not leave themselves its price not from its production costs to derive. Rather the real estate value is the kapitalisierte value of the net yield of property which can be expected, thus the kapitalisierte antizipierte ground rent. To that extent ground rent is not the one interest charges of the soil costs realized afterwards, separates it taxes away a part by the use of the soil (in this case by the letting of dwelling) which can be expected of the net yield. The price of land does not only orient itself at the potenziellen amount of rent; also competitive types of use are taken into account.

The upper limit of the ground rent is under the condition of a private, economically rationally acting property owner therefore only by the Zahlungsbereitschaft of the potential buyers is limited. Therefore the ground rent is characterized generally also as monopoly pension. Due to the singularness of each property with its specific situation the urban soil market disintegrates, as that in extreme cases (as it for instance in the core of metropolises manifesting itself can) each property its own market has.

Contradiction exists in the literature over the evaluation of the ground rent and its allokativen function. The discussion can be retraced to approximately 1900. At that time a debate divided the experts of economic politics over a possible land reform into two camps: On the side stood those, which awarded themselves to the ground rent and from their resulting in speculation an overall economic function. tellvertretend here Adolf weber is quoted:

'' "The economic achievements of the soil speculation exist in the following:

1. It prevents that the defiance, the stubborness, which restrains business experience lacking of the urban farmers the development of the city in crucial instants;
2. it takes a large part of the risk of the future development on itself;
3. in order to hold this risk within as close a borders as possible, the speculation carries the initiative for unlocking and land development of new development land. "

(WEBER, Adolf: Soil and dwelling: Eight guiding principles to controversies over the urban soil and housing question. Leipzig 1908)

From other perspective the ground rent than is parasitic evaluated. It be not the merit any achievement, on the contrary cause those with it operate speculation rise price of land and housing shortage. Representatives of this view - under it Adolf Damaschke - support a land reform and demand to make at least in individual cases the socialization of real property in favor of the public.

Articles in category "Housing production"

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