ABSTRACT
Before governments intervened directly in housing finance through mortgage guarantees, interest and amortization subsidies or direct public loans in the twentieth century, there were two ideal-typical ways to provide for private housing capital: to create specialized local deposit circuits of housing capital shielded from competition (deposit-based) or to sell mortgage bonds on capital markets (bond-based). First, the deposit institutions themselves came in two broad types: savings and loan associations (SLAs) and building cooperatives. But for the path-dependence argument offered here, the persistence of these institutions nowadays and, more importantly, the persistence of much of the housing stock and urban structure their historic mortgage capital went into suffices to ascribe them a historical causal role in the creation of long-lasting homeownership differentials. This chapter turns to the origins and consequences of, first, the German, and, second, the American housing finance systems.
