The meaning of competition between social and market rented housing

Abstract

When policy makers claim that rented housing has to become more competitive, there is no consensus on what competition in this context actually means. The same holds true for scientific housing research: Theories that have utilized the economic concept of competition tend to rely on implicit definitions or focus on selected aspects. In particular, one can identify a lack of understanding of competition between the different rented housing tenures. This paper tries to fill this gap as it sheds light on a more detailed meaning of competition in rental housing markets, what it entails, and how it can be assessed. A brief review of competition in economic theory shows that opposing concepts have led to different connotations of the term. Building on the Structure-Conduct-Performance (SCP) paradigm and further theories of competition analysis, the paper intends to develop an innovative framework for analysing competition between social and market rented housing. The presented SCP framework of rented housing illustrates that the competitive relation between social and market housing is reflected in the economic and regulatory environment of the rental market, the behaviour of the landlords and tenants, as well as the economic and social effects of competition.