Contemporary public housing debates generally focus on affordability, while overlooking inequalities in housing quality, such as living space. Using longitudinal survey data from Germany (1985–2022), a country with tenant majority, this study examines household overcrowding and underoccupation. We find that the risk of overcrowding (currently 11%) is highly uneven, driven primarily by sociodemographic factors—such as having children, migration background, marital status, and education—rather than income. Families with children, low-skilled individuals and migrants are most vulnerable, whereas high-skilled, childless, native-born individuals face a relatively low risk. Underoccupation, which affects up to 39% of households, is similarly shaped by sociodemographic factors as well as homeownership. Our longitudinal analysis further shows that life-course events, including childbirth and changes in marital status, play a key role in transitions into both overcrowded and underoccupied conditions. We also document a substantial gap between objective and subjective measures of living space, highlighting widespread misperceptions. Our findings have clear policy implications. Policies should target high-risk groups to reduce overcrowding and leverage underoccupation to improve housing efficiency through downsizing incentives, intergenerational housing, or underoccupancy taxes, complemented by awareness campaigns. 

Abstract: In this paper, we deliver the first causal evidence on the relationship between immigrant host-country language proficiency and homeownership. Using an instrumental variable strategy, we find a substantial positive impact of language skills on the propensity to own a home and the quality of housing among immigrants in the United States. While this effect is mediated by household income, our estimates also speak in favor of a direct language effect. Suggestive evidence further indicates that part of this effect may be driven by discrimination. Our results highlight the importance of host-country-specific human capital and, in particular, language proficiency for socio-economic assimilation in housing markets.