The Housing Affordability Revolution

Prof. Thies LINDENTHAL, Associate Professor for Real Estate Finance, University of Cambridge

Date:         7 December 2022 (Wednesday)
Time:        5:00pm – 6:00pm
Venue:      Online via Zoom
Host:         Prof. Rose LAI, Professor of Finance
Zoom Link: https://umac.zoom.us/j/96263691424



This paper provides the first long-term overview of developments in urban housing affordability, quality and inequality, focusing on seven European cities from 1500 to the present. Based on the rental indices developed by EKL (2022), we create new indices of housing quality and inequality, and relate these to changes in wages and population. Before 1900, markets were unregulated and rent prices and wages rose in tandem when cities grew while housing quality and inequality increased. We document a housing affordability revolution between the 1910s and the 1970s when housing affordability and quality improved dramatically while housing consumption inequality declined. We show that part of the short-term affordability improvement in this period was attributable to rent controls and housing supply expansions. Most of the surge in housing expenditure that did occur over time is due to increasing housing quality rather than rising rent.



Prof. Thies Lindenthal is an Associate Professor for Real Estate Finance at the Department of Land Economy, University of Cambridge. Before that, he obtained his PhD from Maastricht University and did a postdoc at MIT’s Center for Real Estate, working on the market for virtual locations such as Internet domain names. Prof. Lindenthal’s research interests are twofold: First, he analyzes property investments in the very long-term, tracking rents, prices, and returns for up to 500 years. The second research line focuses on applied machine learning techniques to utilize high-dimensional “Big(ish)” data. Put differently, he uses images and other data that are too complex for spreadsheets to better understand property values, household preferences, and decisions made by very human and not always rational agents. Thies takes pride in teaching. He is the course director for Cambridge’s postgraduate MPhil programme in Real Estate Finance. He is also a fellow at Murray Edwards College and at the Cambridge Endowment for Research in Finance. In addition, he received a JM Keynes Fellowship in Financial Economics. Besides, he is also a board member for the American Real Estate and Urban Economics (AREUA) association and has served as an expert witness for internet domain names at US courts.

All are welcome!