Speaker
Description
Introduction and research problem
A growing share of young adults are renting the home they live in while owning a home they have no intention of ever living in. This is the new tenure position of renter-owners, a solution to the impossibility of becoming an owner-occupier. Owner-occupancy has been a marker of stability and of middle-class position throughout the post-war period (Benson & Jackson, 2017; Caramellino, 2015). It allowed households to secure the use value of the home, a place of their own and the security that comes with it, while reaping the financial benefits of its exchange value, provision for future welfare and an inheritance for the next generation (Besbris & Korver-Glenn, 2023; Doling & Ronald, 2010). For the past two decades that arrangement has drifted out of reach of middle-class households (Arundel & Doling, 2017; Lennartz et al., 2016), most sharply for those who need to live in the central hubs of the contemporary economy (Hochstenbach & Arundel, 2021), pushing them into rental sectors that, where renting is weakly regulated, offer little security of tenure (Byrne, 2020). What follows is an uncertain everyday for young middle-class adults who can no longer hold use value and exchange value in the same place.
This paper examines a strategy through which households resolve that contradiction not by choosing between use and exchange values but by splitting them across space. Renter-owners rent their primary residence in an expensive central city while owning a residential property, bought as an asset, in a peripheral one. Still a small share of the tenure structure, it is a growing arrangement that departs from the normative owner-occupancy trajectory and that the tenure literature has struggled to accommodate within the owning-renting dichotomy (Zhang, 2023). It is also enabled by prevailing public and planning policy: FTHB programmes and homeowner tax concessions, meant to relieve affordability pressures, can subsidize a purchase that need not be occupied (Martin & Pawson, 2024), while opportunity remains concentrated where ownership is beyond the reach of the households those programmes were designed for.
Three questions follow: what is the extent and geography of the renter-owner arrangement, what mechanism produces it, and how is it stratified within the cohort. I argue that renter-ownership is how middle-class position is held once owner-occupancy, its former marker, is out of reach, and that the security this delivers is paid for with insecurity and uncertainty in the dwelling the household actually inhabits.
Conceptual framework
Two shifts, one economic and one spatial, set the terms within which young middle-class households make housing decisions.
The first is the transfer of responsibility for long-term welfare from the state to the household, with housing becoming the primary vehicle through which households secure their financial future (Doling & Ronald, 2010; Kohl, 2020; Prabhakar, 2019). This is not simply state withdrawal: governments have reoriented welfare spending toward subsidizing asset accumulation, through first-time-buyer instruments among others (Martin & Pawson, 2024), demand-side support that tends to sustain prices rather than relieve them (Gallent, 2019). Adkins et al. (2020, 2021) extend this in their asset economy framework, holding that wage stagnation alongside housing inflation has made asset ownership rather than wage income the principal determinant of standing. Whether this amounts to class formation is contested (Christophers, 2021), and I follow the reassessment finding that relation to housing shapes status rather than class (Ruonavaara, 2025), so that what an asset secures is a claim to standing.
The second is that asset inflation is not spatially neutral. Price appreciation has been far more pronounced in primary cities than in peripheral locations (Inchauste et al., 2018; Nijman & Wei, 2020), a divergence entwined with the agglomeration of high-wage labor markets, amenities and social networks in those cities and the sorting of high-skill workers into them (Le Galès & Pierson, 2019). Spatial planning has long pursued balanced territorial development as a counterweight to this concentration (Davoudi, 2003), yet the divergence persists. The spatial dimension of asset positions nonetheless remains largely untheorized (Adkins et al., 2021, p. 568, n. 10; Bobek et al., 2023).
Together these shifts meet a norm they have made unattainable. Owner-occupancy marked the transition to adulthood and membership of the middle class (Benson & Jackson, 2017; Ford et al., 2002). The expectation persists as young adult ownership rates fall (Crawford & McKee, 2018; Lennartz et al., 2016), leaving these households holding a marker they cannot obtain where they must live.
Dual tenure, or renter-ownership, has been documented across several high-income countries (Gruber, 2016; Huang et al., 2021; Hulse & Mcpherson, 2014; Kim et al., 2009), mostly through household surveys, as a homogeneous group, and as a mismatch between where consumption and investment demand can be met. Its spatial structure, stratification and mechanism remain unexamined.
Methods
The study is mixed methods. The quantitative component uses a bespoke panel built from Israeli Central Bureau of Statistics records, linking the national Housing Registry to individual demographic and income records for 2011 to 2022, with spousal identifiers used to derive joint household income at the individual level. It holds sixteen million person-year observations, approximately five million of them young adults, and supports measurement of prevalence, socio-demographic profile and the mapping of residence against investment.
The qualitative component comprises twenty-one semi-structured in-depth interviews with middle-class young adult renter-owners, drawn from the hegemonic group and from minority groups. Interviews were conducted mostly in the interviewees' rented homes and thematically coded. Participants were recruited through personal networks and intermediaries to match the profile established in the registry analysis [table_1]. Nineteen provided sufficient detail to be classified by the size of the parental transfer received, at a threshold of 200,000 NIS, yielding eight emerging middle-class and eleven upper-middle-class households.
Results
Extent and socio-demographic attributes. Young adult renter-owners aged 20 to 45 rose from roughly 15,000 to 43,000 households between 2011 and 2022, reaching 6.6 percent of the national rental market and growing faster than the rental market itself, which doubled over the same period [picture_1]. Compared with other young renters they are older, more likely to be married, have more children, earn higher household incomes, rent larger apartments and are more concentrated in the primary metropolitan district [table_2].
Spatial dispersion. Mapping residence against investment shows a consistent split [picture_2]: renter-owners live in the most expensive towns of the metropolitan core while investing in middle-class peripheral towns. Across the top ten cities on each dimension, the average socio-economic cluster is 8.1 for residence and 5.0 for investment, and average apartment prices in the residence cities are more than double those in the investment cities. Investment concentrates in mid-tier cities, notably not in the cheapest markets.
The imperative to reside centrally. Renter-owners treat central location not as a preference but as a precondition, hence an imperative. The stated reasons vary, from labor market access to educational institutions to a neighborhood whose social composition matches the family the household is building. What is shared is the refusal to trade location for ownership. Location also supplies standing directly: renter-owners describe their neighborhoods as places others want and cannot enter, which is what makes central residence a positional good, valuable in part because it is withheld from others (Hirsch, 2005).
The imperative to own. Ownership is described in the same register of necessity. Renter-owners hold that neither the life they want now nor their security later can be built on wages alone. What the imperative demands, however, is not an appreciating asset in general but a home in particular. Asked why residential property rather than a financial portfolio, they answer in the vocabulary of the home rather than of return: the unit is described as a place, as something that will be there. The security named is acknowledged rather than exercised, available to be held but not lived in. Where they buy is bounded by the same logic: investment goes to places they would not live, but not to places wholly outside their cultural range.
The external mechanism. The imperative to own is also institutionally enforced, by parents and by the state. Parental support arrives conditional: funds are designated for real estate and not for other instruments, so transfers reach young adults already channeled toward housing, carrying a moral weight other products do not. State first-time-buyer subsidies and tax concessions, designed to produce owner-occupiers, are redirected toward investment purchases, and in some cases are what makes the purchase happen at all.
Within-class stratification. The same arrangement produces two divergent class experiences [table_3]. The divergence originates in parental class position, measured here by the size of the transfer received, roughly sixteen times larger for the upper-middle-class group. That capital enters the purchase as equity, so the upper middle class borrows at 27 percent leverage against 78 percent for the emerging middle class, and the property yields a monthly surplus for the first group and a deficit for the second. For the upper middle class renter-ownership is a comfortable holding pattern and perceived as a stepping stone toward eventual owner-occupancy. The emerging middle class subsidizes its asset position from wages and lives in central housing that is worse in both quality and location, describing themselves as clinging to a tenancy until they can no longer manage. Present insecurity is what the emerging middle class pays with, and the payment buys a future position it can hold but not inhabit.
Discussion and conclusion
Renter-ownership is a strategy used by middle-class young adults in times of housing uncertainty, in order to secure future welfare at the cost of present tenure security. This is a housing strategy of the middle class, and what gives its two imperatives their specific content is space, or more precisely the spatial structure of agglomeration and asset inflation. Living in the centre, where opportunity and status lie, is non-negotiable, while buying in the centre is out of reach for the middle class. The periphery, thin on opportunity but accessible to those earning a central income, is where the ownership imperative can be met. Use value and exchange value are thereby separated across two locations, spatially decoupled, so that ownership standing is distributed rather than held in a single dwelling.
What the purchase of an investment home secures is not a class position in any strong sense but a status claim: a way of holding a recognizable place on the middle-class side of a boundary (Vassenden, 2014) once owner-occupancy is out of reach. Renter-owners position themselves on the side of owners even though they lack the secure tenancy owner-occupancy provides. That claim, and the uncertainty attached to it, is stratified by class position: the upper middle class holds a more secure present and future, while the emerging middle class accepts an unsettled present for a future it takes to be secure. What the Generation Rent literature (e.g. Byrne, 2020; Hoolachan et al., 2017; Waldron, 2023) reads as exclusion is here an active strategy, but one whose availability is itself inherited.
Renter-ownership is also a product of housing and tax policy. Eligibility for first-time-buyer subsidies and purchase-tax concessions is often keyed to whether a household already owns rather than to where it will live, though the balance between residence-contingent and tenure-agnostic schemes varies by jurisdiction (Martin & Pawson, 2024). Where it is tenure-agnostic, support meant to settle young households into the dwellings they occupy reaches renter-owners as an investment subsidy, while the deeper privileges of occupancy remain beyond them. Policy built to produce owner-occupiers is in this way promoting assetization among renters. Renter-ownership therefore poses a distributive question for planning: where opportunity is concentrated and affordability is left to the market, middle-class households do not lose access to ownership so much as relocate it. Whether uncertainty travels with that capital, into peripheral localities absorbing a rising share of non-resident owners, is a question for further research and one planning cannot leave to housing markets to settle.
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