Diversifying tenure options: rental and beyond
Paraphrasing the Sphinx, what creature sleeps with larger people in the morning, with friends during the day, with smaller people in the afternoon and often alone at night?
“How much of a down payment do you want?”
Old friends and
Do you know where your town’s newly hired kindergarten teacher, just out of college, lives? Or where the cheerful man who pours your morning latte lives? What about the young MBTA bus driver?
So what are the options in a country where homeownership is ”the American dream”? What do young singles and couples starting out on the job ladder do? They rent.
Nic [No ‘k’, he’s Greek as he loves to tell people — Ed.] rightly observes that lack of rental housing drives away the very same people than
Not surprisingly, some young people opt out of
While some rent by choice, most do so because of economic reality:
Last year, the median sales price of an existing home in
According to the National Low Income Housing Coalition, the housing wage required to rent a modest two bedroom apartment in
And we need such folks:
a healthy community comprises renters and owners (just as a healthy economy encompasses people at all levels of the workforce).
Meanwhile, short-sighted suburbs express their NIMBYism in clever ways:
Local communities cringe at the words ”multi-family,” especially when joined with the word ”affordable.”
To discourage building, these communities enact large lot zoning and regulatory restrictions, which drive the cost of land higher. Some have explicit prohibitions against multifamily housing. Local officials pass ”land use controls” ostensibly to preserve the quality of life for residents, but those controls [and caps on real estate taxes — ed.] severely circumscribe the quality of life for the region’s workforce. Ultimately, higher housing prices lead to increased labor costs, which could undermine our economic competitiveness.
Without directly attacking the American Dream of homeownership, Apgar chimes in with a reasoned caveat seldom mentioned by real estate brokers:
When families take on debt that they are unable to repay, homeownership does not build wealth. Struggling to buy a home they can barely afford can trap families in modest homes located in declining neighborhoods with limited potential for equity buildup. For all too many, the dream of homeownership dissolves into the financial nightmare of missed mortgage payments and eventual foreclosure.
Yet these individual nightmares are not simply bad luck — they are the inevitable consequence of a national housing policy that extols homeownership and cuts the funding needed to expand other affordable housing options. The result of this unbalanced focus on homeownership is clear: In the pursuit of decent housing many families play Russian Roulette with their financial security. Hoping they end up in the group of owners that grow equity and live happily ever after, families might suffer, instead, the harsh financial death of foreclosure.
Homeownership is not a cure-all. What the nation needs are new housing options that blend the best aspects of owning a home with the low financial risks of renting.
Although we use linkage and even some public-private land-development, options like shared appreciation, rent-to-own, and group ownership are much more common in Europe (the Netherlands and Britain being two examples) …
This isn’t what we mean by new tenure forms …
(and yes, that is a real house, the narrowest in Amsterdam)
… but rare here:
Rent-to-own programs — including the federally funded Homeownership Voucher Program — allow participants to improve their credit record and be in a stronger position to purchase a home at a later date. Though they present helpful alternatives to simple renting, these and other innovative housing options have yet to reach any significant scale in the
In short, we need to move beyond the simple dichotomy of owning versus renting and explore the exciting world of alternative tenure forms and new affordable housing options.
