Earlier this month, a Washington Post opinion piece declared that falling home-ownership rates are good news for many Americans. Writer Charles Lane posited that recovering real estate values have put more money in the wallets of today’s home owners, leading to more equity on a per-household basis. He said this makes current home owners’ lives more sustainable and secure.
A National Housing Institute blog piece from affordable housing advocate Doug Ryan questions this logic and speaks up for American consumers who find home ownership out of reach. He starts by discussing the impact of the recent housing crisis on lower-income Americans:
Foreclosures, short sales, and other reactions to the crisis threatened and then wiped out many American dreams. It’s also well known that, as we remain in the shadow of the housing crisis, first-time home buyers are delaying or not buying at all.
While Lane may think this is good news, it’s hard to mesh this with other data points from the crisis. Lane asserts that all this loss of wealth is a positive, even though it impacted low-, moderate- income, and new buyers disproportionately. He frames it as a “re-concentration of home equity,” an astonishing statement in an age of striking inequality. Essentially, lots of low-income, low-wealth people lost their homes, leaving the remaining, better-off homeowners with more equity. Is this good public policy?