Tenure Sectors

Housing Tenure

Housing tenure (from the Latin tenere to hold) refers to any number of legal arrangements for securing, either permanently or temporarily, a possessory interest in land and buildings that are used for human shelter. Residential real estate may be held in many different ways. There exist, therefore, many different forms of tenure.

These multiple forms of tenure can be classified and clustered by sector according to who holds the possessory interest and how that interest is priced and conveyed from one owner to another. Thus, housing may be owned by an individual, by a group of individuals, or by a for-profit or nonprofit corporation within the private sector; or it may be owned by a governmental or quasi-governmental entity within the public sector. Housing may be priced and conveyed through the market, where access and occupancy are determined solely by ability to pay, or housing may be priced and conveyed through nonmarket means, with prospective owners or renters gaining access to housing only if they meet certain social criteria for eligibility. Three tenure sectors are differentiated when housing is classified by ownership and conveyance (see Table 1): (1) privately owned market housing, (2) publicly owned nonmarket housing, and (3) privately owned non-market housing. A fourth sector of publicly owned market-priced housing is too rare to warrant more than a passing mention.

Table 1 Classification of Tenure Sectors

Each tenure sector exhibits a distinctive approach to owning and conveying residential real estate, but there are also multiple variations contained within each sector. To employ a traditional metaphor, each sector contains a variety of ways in which a property's “bundle of rights” may be possessed, utilized, and transferred. Many “sticks” are to be found in this bundle, including the following:

• The right to occupy the property
• The right to exclude others
• The right to convey (i.e., alienate) the property by selling it, subletting it, or bequeathing it to one's heirs
• The right to profit from the property's sale, pocketing all of the equity as one's own
• The right to improve or remove existing buildings
• The right to mine the minerals underneath
• The right to enjoy the air, light, and “view corridors” overhead

All of these rights may be permanently held by a single owner or temporarily held by a single renter. The popular perception of tenure tends to divide residential property into precisely this dichotomy of owning versus renting. The legal reality is much more complex. Any property's bundle of rights may [Page 742]be held in total by more than one owner—or by more than one renter. Alternatively, the bundle of rights may be untied and split apart, with individual sticks separately apportioned among different owners or renters. The rights that are held by the owner-occupant of residential real estate, moreover, along with many of the responsibilities, risks, and rewards that come with homeownership, may be shared with an outside party that continues to exercise a degree of control over what the present owner (and future owners) can and cannot do with the property.

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