Is Homeownership Still Part of The American Dream?

6.7.12 | I’ve been enjoying NPR’s series on the American dream which calls to light many of the issues we’ve been writing about on this blog, from homeownership to class mobility to the ways black and Latino communities have been disproportionately affected by the foreclosures crisis.

Despite all the news stories that keep threatening America will become a “nation of renters,” a new poll released last month by the Woodrow Wilson International Center for Scholars finds that no matter how many times we are told it’s no longer the best way to build equity in the new economy, most of us still want to be homeowners.

“84 percent of respondents said homeownership today is just as important as or more important than it was five years ago,” reports NPR. “Ninety percent still think homeownership is part of the American dream.”

This reminded me of Emily Badger’s post from late last year at Atlantic Cities called “The Anxiety of the Forever Renter” which hit home for me when I read it. Badger describes how she and her husband are “quintessential young professionals of the new economy” — transient, knowledge workers who can telecommute, and aren’t tied to the factory.

Yet, she says, she still daydreams about owning a home:

“We want to grow herbs outdoors and shop in the heavy-duty hardware store aisles and change the color of our living room,” Badger writes. “We want to make irreversible choices about wall fixtures and rash decisions at the animal shelter.”

In a piece today on “Generation Rent: Slamming Door Of Homeownership,” NPR’s Scott Neuman reports on how the housing crisis has affected the millennial generation — those born roughly between 1975 and 1995.

“They’ve seen what their parents are dealing with, what their brothers and sisters are dealing with, in terms of being saddled with home values that are less than what was paid for,” Paul Conway told NPR. Conway is a former chief of staff for the U.S. Department of Labor, and president of Generation Opportunity. According to the piece, these millennialis are redefining middle class success, and putting the dream of homeownership aside for a while.

I count myself among this group, though at 37 my husband and I barely make the millennial cut-off. Though we both grew up expecting to be homeowners when we started our family, we’ve changed our tune quite a bit. Where we live in Berkeley, Ca. buying a home that would fit our family of four starts at more than half a million dollars, something that seems far out of our reach for the foreseeable future. We’re renting, and the more I read and write about the housing crisis, the more I think I am among the lucky ones to still be doing so.

We still have a lot of choices. We still have jobs, family support, and we’re not in the demographic that was targeted for subprime mortgages. I’m grateful we didn’t sink all of our savings into a mortgage we couldn’t afford, like some of our friends.

BRR Network Member Rolf Pendall thinks my attitude is the appropriate one for the time being. He told NPR that individuals, governments and policymakers have placed too much emphasis on homeownership in the past few decades. Instead, he says localities should be preparing for more renters, like my family.

“What communities need to do to ensure they are prepared is first to make sure that there are sites where new multifamily housing can be built,” Pendall said. “And the multifamily housing that gets built needs to go in communities with high opportunity, not just communities where the schools don’t perform well and where it’s not safe to live.”

In the piece at Atlantic Cities, Badger points to urban planning experts like Richard Florida and Arthur Nelson who are calling for some kind of hybrid rental/homeownership model in the future. I’d like to hear more about that.

Readers should also check out Pendall’s post at MetroTrends this week, where he highlights the role of race and place in how families and communities have been affected by the foreclosure crisis.

Pendall points to stats from Zillow showing that 16 million homeowners are still underwater on their mortgages, meaning they owe more than their home is worth. He says that in certain cities, it is the majority minority suburbs that have been the ones hardest hit and now have the largest percentage of houses with negative equity. These suburbs are often predominantly African American and/or have large numbers of first- and second-generation immigrant families.

 Just over half the homes in Riverside and San Bernardino counties, for example, have negative equity, far more than in Orange County (25%) or Los Angeles County (32%). In San Bernardino’s high-desert cities of Victorville and Adelanto, for example, over 70 percent of the homes have negative equity. This pattern shows up all over the Sun Belt and in New York, Chicago, and DC.

Barbara wrote recently about a new Woodstock Institute report that examined six counties in the Chicago metro area and found foreclosure rates in black and Latino neighborhoods that are about two and a half times higher than foreclosures in predominantly white communities. This report also found communities of color are more than twice as likely as those in white communities to have little to no equity in their homes.

Regardless of whether the American dream still includes homeownership, no doubt we still have lots of work to do to make sure a basic level of security is available to all families.

Photo by Paula Steele.

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