Five years ago, the National Multi Housing Council and National Apartment Association launched a new advocacy campaign questioning the nation's “homeownership at any cost” housing policy.
While homeownership is an important part of America's housing policy, trying to become a nation of 100 percent homeowners could have unfortunate consequences for homeowners, local communities, and the national economy. The rarely spoken truth is that there is such a thing as too much homeownership. More importantly, our single-minded pursuit of higher homeownership rates causes us to overlook alternative and potentially more effective solutions to our current housing needs.
And, for many of our country's most pressing housing challenges, apartments are a much better solution. Homeownership is a blunt and inefficient tool for fixing our growing shortage of affordable housing, for example. And, for a country determined to grow smarter and reduce sprawl, homeownership initiatives may exacerbate the problem by sending families into the distant suburbs in search of inexpensive homes. America needs apartments. We need them to house the 78 million echo boomers who are already entering the housing market, the 78 million aging baby boomers who will ultimately need help taking care of themselves, and the millions of hard-working families who are paying more than half their income for shelter.
RISING FAST: The United States' current account balance, which includes trade and investment flows, is running a growing deficit that represents more than 6 percent of GDP.
Finally, while America's tagline may be “a nation of homeowners,” one-third of our citizens are renters, and 40 percent surveyed report that they prefer to rent, even though they could afford to buy. In fact, the fastest-growing segment of apartment renters during the past five years have been households making $50,000 or more annually.
All of this has gotten lost in the national pursuit of ever higher homeownership rates, though, which led us to NMHC's and NAA's balanced housing policy initiative. We knew that challenging homeownership is like challenging motherhood, but we also thought it was time for a new perspective in America's housing debate.
Since then there have been many victories large and small. We have successfully opposed unnecessary new homeownership incentives by convincing more and more legislators and housing officials that there is such a thing as too much homeownership. As we begin the fifth year of our campaign, these small victories are combining to attract a growing legion of new supporters to the balanced housing policy bandwagon.
There is now an emerging body of academic research calling for new thinking on homeownership. One of the most notable new recruits is William Apgar, formerly HUD assistant secretary of housing under President Bill Clinton. Now a scholar at Harvard University's Joint Center for Housing Studies, Apgar published in January a report refuting the notion that homeownership is a “silver bullet.”
In “Rethinking Rental Housing: Expanding the Ability of Rental Housing to Serve as a Pathway to Economic and Social Opportunity,” Apgar says that America overstates the benefits of homeownership and fails to appreciate the benefits of rental housing. There are, he says, “downsides to excessive focus on promoting homeownership.” Then he provides evidence that “many low-wealth and low-income families are being ‘pushed' into homeownership ... even when it is not a good choice.”
“In the worst-case scenario,” Apgar says, “lower-income homeowners may become trapped in declining neighborhoods with little access to employment, good quality schools, or social services and equally limited potential for price appreciation. In these situations, all too often the dream of homeownership becomes the nightmare of a financially devastating foreclosure.”
At the same time Apgar's paper was released, 12 organizations did a joint congressional briefing to confront what they call the most prevalent myths undermining a national balanced housing policy. For the first time, non-housing organizations such as the Consumer Federation of America, the Children's Defense Fund, and the National Urban League went on record as saying that “homeownership is not the best housing option for everyone, all the time, everywhere.”