We can see in literature that there is an high heterogeneity of regulation on the housing market. We propose an answer based on the complementarities between strong family ties and high level of regulation on the housing market. We want to describe two possible situations : One first situation where the family ties are strong, individual’s mobility is low and the regulation level on the housing market are high (Mediterranean country) and another one where the family ties are low, individual’s mobility is high and the regulation level on the housing market are low Anglo-Saxon and Scandinavian country).
Procedural formalism affects landlords in a world where disputes between tenants and landlords end up in courts. However, there are many other ways to solve a dispute. One of them consists in only accepting tenants who belong to your networks of friends or relatives. Such tenants are much easier to keep quiet and the landlord is sure to obtain the rent. Of course, it may be difficult for landlords to find tenants who belong to their local social network. This leads us to our principal point : procedural formalism is more likely to take place where the local network matters more. There are several reasons that justify this argument : first, landlords suffer less from the regulation and the supply of dwellings for rentals is not massively affected ; second, the loss of rental opportunities is less hurting when people easily accept coresidence with relatives ; finally, it may become easier for local people to get a dwelling because they become preferred to anonymous tenants at given income and job security.
We proceed in two stages. In first one we illustrate empirically the assumptions above. In second stage we write a matching model of the housing market. Where the model would predict housing status, mobility patterns, and people ’s preferences vis à vis market regulation.