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Changing Social Divisions in the Housing Market of Tallinn, Estonia Anneli Kährik Published online: 06 Nov 2010.
To cite this article: Anneli Kährik (2002) Changing Social Divisions in the Housing Market of Tallinn, Estonia, Housing, Theory and Society, 19:1, 48-56, DOI: 10.1080/140360902317417985 To link to this article: http://dx.doi.org/10.1080/140360902317417985
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Changing Social Divisions in the Housing Market of Tallinn, Estonia Anneli Ka¨hrik Tartu University, Estonia
Housing, Theory and Society 2002; 19: 48–56.
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Changes in the division of social groups between housing market segments in Tallinn, Estonia, during the period of implementation of liberalist housing reforms in the 1990s are discussed. The principal changes in residential pattern and the causes of these changes are explored. The developments in Tallinn are set in the context of a wider debate about residential segregation in European countries. The findings show that socioeconomic residential structure, in addition to tenure structure, has been most affected by the social transformation. Under the new conditions, housing market divisions are beginning to reflect social divisions. Besides increasing differences in incomes, the changing residential pattern is influenced by housing policy, individual preferences and existing housing market structure. Current developments in housing policy and income structure lead us to expect increasing socioeconomic inequality in the housing market in the present decade. Key words: housing market, residential structure, social divisions, social inequality, Tallinn, Estonia. Anneli Ka¨hrik, Institute of Geography, Tartu University, Vanemuise 46, EE-51014 Tartu, Estonia. Tel: ‡37 27 375 817 or ‡37 27 343 914. Fax: 37 27 375 825. E-mail:
[email protected]
INTRODUCTION
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The unequal distribution of social groups in the housing market is the result of social constraints and opportunities, as well as individuals’ subjective choices (van Kempen and Ozuekren, 1998). While af uent households can choose a preferred place of residence, low-income groups have limited opportunities in the housing market. Furthermore, as pointed out by van Kempen, “the spatial concentration of poverty is both an outcome and a part of the restricted life chances of the urban poor” (1994:995). Therefore, enabling access to adequate housing for all social groups is usually considered an important political issue in European countries. In socialist cities there were relatively moderate income disparities and differences in the division of social groups in the housing market, compared with western European and north American cities (Smith, 1996). The transition to market economies has increased socioeconomic disparities in these countries. A few authors have referred to the changes in the sociospatial residential structure (e.g. Sy´kora, 1999a; SailerFliege, 1999). Most of the research on socio-spatial differentiation has, however, been carried out in advanced capitalist states. This article focuses on changes in the division of socioeconomic and ethnic groups between housing market segments in Tallinn (the capital of Estonia) during 1995–99. Besides exploring the main changes in 2002 Taylor & Francis. ISSN 1403–6096
residential pattern, the article discusses the causes of these changes. Developments in Tallinn are set in the context of a wider debate about residential segregation and political approach compared with the other European countries. As income differences among households in Estonia have shown a sharp increase in the 1990s, and several liberalist housing reforms have been implemented, one might also expect increasing socioeconomic differentiation in the housing market. At the same time, greater freedom of housing choice in the 1990s, compared with earlier decades, should lead to new residential divisions in the housing market based on households’ preferences. For the analysis, the data of the Estonian Labour Force Surveys carried out by the Statistical Of ce of Estonia since 1995 have been used. MAIN TYPES AND CAUSES OF RESIDENTIAL DIFFERENTIATION The housing market is divided into sub-markets by the type and quality of housing, as well as by the type of tenure and ownership (Lindberg and Linde´n, 1986). In capitalist societies, households operate within different housing sub-markets on the bases of resources available to them and their housing preferences. According to Mollenkopf and Castells, “in capitalist cities social divisions generally go hand-in-hand with spatial segregation via the operation of the housing market Housing, Theory and Society
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Changing social divisions in the Estonian housing market and the price mechanism” (cited in Hamnett, 1996:1409). Lindberg and Linde´n (1986) (see also Wessel, 1996) refer to the situation where social groups are unevenly distributed over housing sub-markets as “segmentation”. The term “segregation” usually refers to the uneven distribution of social groups over the urban space, i.e. segregation exists when a social group is over-represented in one area and under-represented in another (see van Kempen and Ozuekren, 1998). As housing segments are usually spatially concentrated in urban landscape, social segmentation tends to overlap with socio-spatial segregation. According to van Kempen (1994), the distribution of social groups in the housing market is most strongly in uenced by: (a) the economic situation in the society (labour force structure, income level); (b) people’s subjective housing and locality preferences; (c) the structure of the housing market; and (d) public sector intervention. In capitalist societies, households’ freedom of choice is related to their socioeconomic position, which in turn is largely determined by their past and present position in the labour market. According to van Weesep and van Kempen (1992), a household’s income re ects most clearly the relationship between its labour and housing market positions in capitalist societies. Nevertheless, as noted by van Kempen (1994), there are other factors besides income and skills that affect individuals’ “life chances”, such as household structure, race, gender and age. Changes in a household’s income are, however, not always followed by changes in the housing market position. Attachment to one’s housing and living environment, household’s composition and size, cultural background, educational level, skills and lifestyle play an important role in decisions concerning housing exchange (van Weesep and van Kempen, 1992; Murie and Musterd, 1996; van Kempen and Ozuekren, 1998). The segmentation of housing stock (different quality and type of housing, forms of housing ownership and occupation) and the location of housing districts creates preconditions for residential differentiation (e.g. for the concentration of the poor). Different households “operate” within different segments of the housing market on the basis of their needs and opportunities. In most European countries, due to the concentric development of cities, the older low standard housing stock is often located near the city centre. The concentration of dilapidated housing contributes to the development of slums. The low level of residential mobility may be caused by the structure of the housing market – certain households have few options to choose from (van Weesep and van Kempen, 1992).
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Various means of social policy (rules and regulations at the national as well as local level, social bene ts, the provision and location of social housing, etc.) can mitigate socio-spatial differentiation (van Weesep and van Kempen, 1992; van Kempen and Ozuekren, 1998). Economic restructuring “everywhere and always takes place within the context of nation states with different regulatory regimes, legal structures and welfare policies and with different national and local cultures” (Hamnett, 1996:1423–1424; see also Esping-Anderson, 1993). Since the 1980s, the public sector’s role in regulating the housing market has decreased sharply in many west European countries (e.g. Great Britain). The outcome has been an increase in social inequality (Musterd and de Winter, 1998). POLITICAL APPROACHES TO SOCIO-SPATIAL SEGREGATION Residential segregation is mostly considered a problematic phenomenon, and many countries have applied measures to eliminate the causes of segregation or relocate households in order to reduce high concentrations of low-income groups and ethnic minorities. In west European countries such as Belgium, France and Great Britain, spatial segregation is largely treated as a problem when it is related to social deprivation (Musterd and de Winter, 1998). Governmental concerns are directed towards areas of concentration of the poor and their associated problems. Governments of these countries usually hold the position that spatial segregation is caused by the inequality of resources needed for access to the housing market. In order to equalize housing opportunities, households’ incomes as well as the employment and education opportunities should be more balanced. Another approach to segregation, characteristic of countries such as The Netherlands, Sweden, Norway and Germany, is based on the view that residential segregation in uences people’s opportunities and constraints and determines their prospects in society (van Kempen, 1994; Musterd and de Winter, 1998). For example, people from deprived neighbourhood s may lack information about opportunities in the labour market (van Kempen and Ozuekren, 1998), they have less access to good quality education and other services. Local social networks can have a negative in uence on people’s moral values and their social participation in society (Knox, 1995). The governments in these countries aim to achieve an equal distribution of social groups over urban space. Ideologically, the housing allocation policies in socialist cities used to follow egalitarian principles. The authorities claimed to be treating all the people equally according to their needs, while maximizing the use of existing housing stock and ensuring adequate Housing, Theory and Society
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A. Ka¨hrik
stock for all. Nevertheless, in reality the most valued public apartments tended to be occupied by the political elite and other especially favoured groups (Szelenyi, 1989; Hegedu¨s and Tosics, 1996). Egalitarian principles were more successfully applied through construction of new large housing estates (Picler-Milanovich, 1994). In general, the socioeconomic residential segregation in socialist cities did not reach such an extent as in many western cities (French and Hamilton, 1979; Smith, 1996). The post-socialist countries in central and eastern Europe have applied housing reforms to de-concentrate decision-making and liberalize the housing market. A large proportion of the housing stock has been privatized and there has been a considerable reduction in public sector expenditure on housing. Therefore, governments’ role in in uencing the housing allocation process has diminished. Many former communist countries have adjusted their housing policy to the liberal welfare state model such as that of Great Britain or even the US (see Balchin, 1996). This group is represented, for instance, by Hungary and the Baltic countries. Housing development in east central European countries, such as Poland and the Czech Republic has more features similar to those of European corporatist states (SailerFliege, 1999). Consequently, the governments of the former group of countries intervene less in the housing allocation process, compared with the latter group. SOCIAL AND HOUSING DEVELOPMENT IN TALLINN The population of Tallinn was 411,600 in 1999 (ESA, 1999b). According to the 1999 Estonian Labour Force Survey (ELFS) non-Estonians (mostly Russians, Ukrainians and Byelorussians) accounted for about 50% of the total population in the city. The transition from the socialist system to the liberal market system has resulted in rapid socioeconomic residential strati cation on the basis of incomes and labour market position (UNDP, 1998). Today, Estonian society is characterized by a large proportion of economically disadvantaged people and a widening gap between rich and poor. The comparison of different income deciles shows an especially marked difference between the lowest and the highest income group, i.e. the gap between the rst and the second decile, and between the ninth and the tenth decile is remarkably larger than between the other deciles (UNDP, 1998). According to the 1999 Household Income and Expenditure Survey (ESA, 2000a), the average monthly net income (from all the sources) per household member in Tallinn was EEK 2600 in 1999 (1 EUR = 15 EEK). The unemployment rate (the proportion of unemployed people in the labour force) was 9.4% in 1998 (in 1990, Housing, Theory and Society
the rate was close to zero) (ESA, 2001). The unemployment rate of Estonians was markedly lower than non-Estonians (respectively 5% and 15%) (ESA, 1999a). The housing landscape in Tallinn consists of: (a) highly valued and usually high-quality apartment housing in the historic old town and surrounding areas; (b) relatively low-standard (built as tenement housing) apartments located near the city centre (constructed mostly during the rst decades of the 20th century); (c) highly valued detached housing areas; and (d) socialist housing estates in special districts but also in several previously mentioned areas. During the Estonian housing reform most of the housing stock has been transferred to private ownership through privatization and restitution processes. In 1999, the municipality of Tallinn owned only 6% of the housing stock, while in 1995 the share was 63% (ESA, 1999b). According to the 1999 Household Income and Expenditure Survey, about 11% of households in Tallinn were tenants in public housing and 9% in private housing, whereas 80% lived in owneroccupied or co-operative housing (ESA, 2000a). Estonia conducted the voucher-type privatization of state and municipal housing stock – all the individuals permanently living and working in Estonia (regardless of their ethnic status) were entitled to privatization vouchers (UNDP, 1998; see also Ka¨hrik, 2000). Thus, the privatization opportunity was not related to household income. The housing stock nationalized during the socialist period was reinstated to pre-war owners or their successors. The tenants of this housing could not privatize their apartments in the same way as other public tenants. Today’s housing market is characterized by a low level of public intervention and a liberalist housing policy. The municipality has few possibilities to provide social housing for households in need. The housing opportunities of households are related strictly to their economic resources. The public rental sector is not subsidized; regular housing costs as well as maintenance costs must be covered by rent. In the private rental sector, rent regulations apply only to reinstated dwellings. The rent level in standard 2-room ats in housing estates is 1.4 times, and in central city apartments even 2.7 times as high as the average net income per household member (Ka¨hrik, 1999). Access to housing for low-income groups in both public and private sectors is regulated by a social allowance system. The system enables the lowest-income households to apply for compensation for their regular housing expenses. The expenses are compensated at a standardized level and only for living space that does not exceed the norm. According to the ELFS data, about 15% of households received housing bene ts in
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Changing social divisions in the Estonian housing market 1997 and only about 6% in 1998 and 1999. In addition, the public sector has interfered in the housing market by nancing minor housing programmes (such as loans to young families and loans to the tenants of reinstated housing, etc.) (ESA, 2000b) and by encouraging home ownership (mostly through loan policies). Most housing developments in Tallinn in the 1990s have been related to the suburbanisation processes. The developments involve new housing construction by the well-off, the conversion of summer cottages into dwellings and the renovation or reconstruction of existing family-housing. A new phenomenon, “gated communities” for the rich, has appeared on the housing scene of Tallinn. In addition to the suburban developments, certain inner city neighbourhood s are currently being upgraded through the renovation of apartments and buildings. This process involves mostly the historic old town, but to a lesser extent also the surrounding good-quality stone housing and some parts of historic wooden housing areas (built as tenement housing). Thus, in contrast to the socialist system, where the distribution of housing was strictly regulated by the public sector (see Ka¨hrik, 1999), the market system has expanded housing choice for many households. Housing landscape is created historically and today’s living conditions are greatly in uenced by the pre-socialist and socialist developments. The few newly constructed residential buildings in the 1990s are primarily detached houses in suburban areas. The majority of the population still lives in socialist housing estates. As homeowners often lack resources to invest in their property, and housing management is not always effective, a large proportion of the existing housing stock (especially the inner-city “tenement housing” and socialist estates) is deteriorating. The government does not directly subsidize the renovation of housing stock.
CHANGES IN THE SOCIAL SEGMENTATION IN THE HOUSING MARKET OF TALLINN: A CASE STUDY Data and method The case study is based on the data of the Estonian Labour Force Surveys carried out by the Statistical Of ce of Estonia in 1995, 1997, 1998 and 1999. Everyone aged between 15 and 74 years as included in the sampling. Tallinn was represented by 2817 people in the 1995 survey, and by approximately 1500 people in the later surveys (for the survey methodology, see Statistical Of ce of Estonia, 2001). The housing situation of different socioeconomic and ethnic groups is compared over the 5-year period. The groups are based on net income per household
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member (individuals are divided into income quartiles, the rst quartile is the lowest income group), and on ethnicity according to the respondents’ own evaluation (two groups have been established – Estonians and other nationalities). The housing situation is analysed by: (a) the type of housing and housing facilities, including basic conveniences such as washing facilities, running water, sewerage, electricity and hot water; and (b) the form of tenure. Based on housing type and facilities, the following housing categories were established (Table 1): (a) ats with some or no facilities (located, for the most part, in pre-socialist housing areas near the city centre); (b) ats with all facilities (mostly socialist estates, but also pre-war higher quality apartment-housing in central city locations); (c) detached housing with some or no facilities (located mostly in older suburban housing areas); (d) detached housing with all facilities (located in suburban housing areas). Unfortunately, the database did not allow analysis of trends in spatial differences over the period, as the city district variable was included only in the 1999 database. Nevertheless, as the housing stock of the same type tends to be spatially concentrated, the above-described method also enables some conclusions to be drawn about spatial segregation. Some residential districts in Tallinn are relatively homogenous as to the type of housing, while others are a mixture of different types. However, this is at the moment the only existing database in Estonia that allows analysis of changes in the residential segmentation in the city of Tallinn over half a decade. Based on the tenure form, the following categories were established: (a) owners (including the members of housing co-operatives); and (b) tenants (including both public and private tenancy) (Table 2). The segmentation index (SI) is used in the measurement of social unevenness in the housing market. The index measures the variation in the distribution of each social group across housing segments compared with the rest of the population. The scale of the index extends from 0 to 100: 0 refers to the complete integration of social groups, i.e. there is no difference between the distribution of one observed social group and the rest of the population, whereas 100 refers to the complete isolation of an observed social group. The value therefore indicates, how large a proportion of the observed group should relocate into other housing market segments in order to achieve equal distribution in the housing market. In calculating the average index for all the social groups, the index of each social group is weighted by the relative size of these groups. Index values depend on the scale – i.e. the smaller the housing segment, the higher the indexes tend to be. Thus, the small number of divisions used in this study would be expected to give relatively low index values. The aim Housing, Theory and Society
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Table 1. The distribution of population between housing types in Tallinn, 1995–99 (%) Housing type
1995
1997
1998
1999
Flats with a low level of facilities Flats with all facilities Detached houses with a low level of facilities Detached houses with all facilities Total
12 81 5 2 100
13 79 5 3 100
12 75 6 7 100
13 77 5 5 100
Data source: Estonian Labour Force Survey.
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of this paper is, however, to estimate the changes that have occurred in the 1990s. Changes in social divisions between housing type segments The second half of the 1990s brought a signi cant change in the division of socioeconomic groups between housing market segments. The relatively even distribution of income groups in 1995 (SI = 1.9, i.e. only about 2% of households should have moved into other types of housing to achieve equal distribution) has been replaced by a different pattern where certain socioeconomic groups have become concentrated in speci c housing market segments (SI = 6.4 in 1999) (Table 3). This shows that the socioeconomic position has become more important in in uencing the housing situation of households in Tallinn. Such change in residential structure is, however, much less remarkable than the transformational changes in income and labour market structures. Changes in socioeconomic position are not automatically followed by changes in housing conditions. There are several factors which keep the present divisions unchanged. Some of these are public sector interventions through the system of social bene ts, a regulated rent level for reinstated housing, governmental initiatives to encourage home-ownership, but also one’s attachment to place of residence and consumes preferences. Even if households can afford to improve their housing conditions in the current or a different residence, they may not choose to do so, for various reasons. Table 4 shows that in apartment housing the Table 2. Distribution of population between tenure types in Tallinn, 1995–99 (%) Tenure type
1995
1997
1998
1999
Owners Tenants Total
35 65 100
90 10 100
84 16 100
86 14 100
Data source: Estonian Labour Force Survey. Housing, Theory and Society
economically disadvantaged population groups tend to concentrate in cheaper apartments with a low level of facilities, while apartments with all facilities have become housing for those with a higher than average income. Such strati cation does not, however, appear in detached housing. The social status of speci c housing segments may be changed in two ways: rst, through the changing social status of residents, and secondly, through residential mobility (by replacement of existing residents, by new housing construction, by residents moving out without being replaced) (see Sy´kora, 1999b). The low mobility rates in Tallinn (4% in 1999), the destination types of households who have changed their residence in the 1990s (see Ka¨hrik and Ruoppila, 2001) and low construction rates – the average annual construction rate in 1992–98 was 1.2 dwellings per 1000 inhabitants (ESA, 1999c) – suggest that the occurred changes can largely be explained by the changing social status of current residents in these housing segments. During the period of the study, the income structure has become more differentiated. However, the residential mobility data also con rm that lower a income population has moved into ats with a low level of facilities more often than have higher income groups during the period (Ka¨hrik and Ruoppila, 2001). Thus, the increasing overlap of households’ socioeconomic status and their housing situation can be explained by trends, residential mobility as well as the changing social status of current residents. Unlike socioeconomic segmentation, ethnic differentiation in the housing market showed relatively high Table 3. Segmentation indexes for 1995–99 based on income and ethnic variables by housing types and tenure types
Housing type by by Tenure type by by
income ethnicity income ethnicity
1995
1997
1998 1999
1.9 21.5 2.5 13.7
5.0 19.9 3.2 7.8
4.2 6.4 18.1 20.0 1.7 2.4 11.4 14.6
Data source: Estonian Labour Force Survey.
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Table 4. Distribution of income quartiles between housing types in Tallinn, 1995 and 1999 (%) (1st quartile – the lowest income quartile, 4th quartile – the highest income quartile)
Flats with a low level of facilities, 1995 Flats with a low level of facilities, 1999 Flats with all facilities, 1995 Flats with all facilities, 1999 Detached houses with a low level of facilities, 1995 Detached houses with a low level of facilities, 1999 Detached houses with all facilities, 1995 Detached houses with all facilities, 1999
1st quartile
2nd quartile
3rd quartile
4th quartile
14.5 18.4 78.9 73.6 5.0 3.4 1.6 4.6
12.0 16.2 80.3 75.5 5.2 5.2 2.5 3.2
10.6 13.0 80.0 75.9 6.3 7.7 3.1 3.4
12.1 7.1 81.4 82.4 5.1 2.6 1.4 7.9
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In 1995: p
