According to the Central Bureau of Statistics surveys, tenants in Norway have a lower quality of life than homeowners: Renters are less satisfied with life and often face more living standard issues than homeowners. Similarly, the article "The Joy of Owning Your Own Home" suggests that homeowners are generally more satisfied with their homes and surroundings and are better socially integrated.
Renters have a lower quality of life
In 2020 and 2021, the Central Bureau of Statistics conducted a quality-of-life survey to "gain knowledge about the quality of life of the Norwegian population and to highlight differences in quality of life among various groups." The surveys include questions reflecting both subjective quality of life, such as how satisfied one is with life, and objective quality of life, such as finances, physical security, work, and education. The findings are presented and analyzed in the article "Renters less satisfied with life."
The surveys show that renters experience more relationship breakups and financial difficulties. About 30% of renters have experienced a breakup in the past five years, while this proportion is only about 10% for homeowners. Of those who rent, nearly 4 in 10 have faced serious financial issues in the last 5 years, and 3 in 10 have become unemployed. Among homeowners, these rates are 1 in 10.
According to the surveys, renters are also less satisfied with their homes than homeowners across all age groups. By their late twenties, 41% of renters are dissatisfied with their homes, compared to 17% of homeowners. As they age, the percentage of dissatisfied renters slightly increases, while for homeowners it slightly decreases. The most significant difference is among those aged 45 to 66, where the proportion of renters expressing dissatisfaction with their homes is 34 percentage points higher than that of homeowners. This disparity between homeowners and renters remains fairly constant across different regions, with homeowners clearly more satisfied with their homes in both urban and rural areas.
Earlier Central Bureau of Statistics living standard surveys indicate that renters face worse living conditions than homeowners. Overcrowding, dampness, mold, insufficient daylight, and inadequately warm homes are issues experienced more frequently by renters than by homeowners. Similarly, renters consistently report a lower quality of local environment than homeowners. According to the quality of life surveys, 20% of renters are dissatisfied with their neighborhood, which is over twice the proportion of dissatisfied homeowners.
Renters' lower satisfaction with their surroundings is also reflected in the fact that a higher percentage of renters lack safe access to local recreational areas near their homes, and a greater percentage feel unsafe in their neighborhoods. The proportion of people feeling insecure in their local environment is low, but renters report feeling more insecure and are more afraid of experiencing violence or threats in their neighborhoods, regardless of whether they live in urban or less urban areas.
According to the surveys, renters are also less satisfied with life overall. In the age group 20-24, the proportion of dissatisfied renters and homeowners is about the same. However, in older age groups, the percentage of those dissatisfied with life becomes increasingly larger among renters compared to homeowners. Among those aged 45 to 66, this proportion is 22% higher for renters than for homeowners.
Moreover, the analysis in the article shows that renters have a lower quality of life than homeowners even when other factors are controlled for. However, the authors suggest that merely renting cannot be conclusively determined as the reason for this lower quality of life.
Homeowners are more satisfied and better socially integrated
Similarly, the article "The Joy of Owning Your Own Home" suggests homeowners are more satisfied with their homes and local environments. This article analyzes and discusses satisfaction and social integration among homeowners, private renters, and municipal renters based on data from a survey conducted in 2017. The survey was sent to a sample of respondents who were renters and belonged to low-income households in 2008. In other words, they faced challenges in the housing market in 2008. By the time the survey was conducted, two out of three had become homeowners.
Among the three groups, homeowners gave the best ratings for their homes, living conditions, and surroundings:
• 83% of homeowners overall are satisfied with their homes, compared to 69% of those in private rentals and 50% in municipal rentals.
• Regarding the environment, 76% of renters in the private market and 55% of renters in municipal housing overall are satisfied. 78% of homeowners feel the same way.
• While more than half of municipal renters are dissatisfied with their living conditions, this percentage drops to 39% for private renters and 25% for homeowners.
Furthermore, homeowners are better socially integrated than renters. In this article, degrees of social integration are indicated by various indicators, such as an index for assistance from family and network, an index for giving help and participating in activities, and an index for social contact. For instance, 37% of homeowners score highest on the social contact index, which includes questions about family visits and participation in gatherings. This means 37% of homeowners report having the most social contact. Among private renters, 24% score highest, while this proportion drops to 17% for renters in the municipal sector.
The data in the article suggests homeowners are better socially integrated, meaning they have a more extensive network and a greater chance of receiving and giving help to others. The group of municipal renters is the least integrated, with private renters in a middle position. However, private renters closely follow homeowners in many areas, and there are often minimal differences between homeowners and private renters.
It's essential to highlight that homeowners in this article do not represent homeowners in general. Two out of three homeowners had received government assistance in the form of a start-up loan to purchase their homes, and the entire group faced challenges in the housing market almost a decade before the survey was conducted. "The socio-economic status of this group of homeowners is closer to private renters, compared to homeowners in general."
In this article, the author argues, with support from literature, that some of the differences between homeowners and renters can be attributed to the status of owning one's home and the feeling of being established in the homeownership-focused Norwegian housing market. The article concludes that owning one's home has many advantages beyond just financial ones, and the empirical data and analysis support the claim that homeowners are the most satisfied and best socially integrated.
Some studies suggest that renting in itself can lead to poorer living conditions due to less stability in renting, weaker ties to the local community, unstable networks due to frequent moving, and inferior quality of rental properties. This might especially be the case in Norway. Norway's strong emphasis on homeownership in its housing policy has resulted in a smaller, less professional rental market compared to neighboring countries. Thus, the Norwegian rental market is characterized by unpredictability, short-term contracts, and a lack of professional landlords. This might have led to renters in Norway being associated with a lower quality of life than homeowners.
We at Living Impact, therefore, want to give more people the opportunity to become homeowners through our rent-to-own model, so that more people can experience the great benefits of owning their own home and differences in society can be leveled out.
This is our raison d'être. Join us on our journey.
Sources: SSB, Evelyn Dyb
