WWW.THESES.XLIBX.INFO
FREE ELECTRONIC LIBRARY - Theses, dissertations, documentation
 
<< HOME
CONTACTS



Pages:     | 1 |   ...   | 25 | 26 || 28 | 29 |   ...   | 38 |

«Contesting the streets Volume 18, number 1 • 2016 U.S. Department of Housing and Urban Development | Office of Policy Development and Research ...»

-- [ Page 27 ] --

To estimate households by race/ethnicity to 2050, I divide Woods & Poole Economics (2015) projections of White persons and all others (comprising the New Majority) by the 2014 average household size for those populations from the 1-year American Community Survey. I thus assume constant household size to 2050; future work can refine this estimate. I also assign all people to households, again something that future work can refine.

I then extrapolate homeownership rates for White and New Majority households. For this extrapolation, I estimate the average annual rate of change in homeownership among White and New Majority households between 2000 and 2014 (the latest year for which data are available). The analysis period thus moderates effects of the ownership bubble of the middle 2000s. Using this constant-change (reduction) in homeownership, I estimate future homeownership for White and New Majority households separately, then combined. Results are reported in exhibit 1.

I estimate that, by 2050, America’s homeownership rate may be 53.5 percent or roughly what Germany’s rate was in 2015.

How do my projections compare with others’? Although no other estimates of homeownership rates extend to 2050, we may be guided by projections of some into the 2030s. Exhibit 2 reports middle projections for 2020 and 2030 by the Urban Institute (Goodman, Pendall, and Zhu, 2015) and “Scenario 2” projections in 5-year increments from 2017 through 2032 by Myers and Lee (2016) interpolated to 2020 and 2030 compared with mine based on exhibit 1. My estimates for 2030 are lower but seem in the range of others’.

Of course, many things can change future homeownership rates. They include, but are not limited to, unforeseen changes in economic conditions, national or global health or environmental catastrophes, wars or other forms of significant social change, changes in policies that alter incentives for homeownership, and changing attitudes of the benefits and burdens of homeownership, among others.

I consider this projection to be preliminary. Future analysis should be conducted to assess the change in homeownership among individual population and household groups based on age, income, education, household type, race, ethnicity, and metropolitan area, among other factors.

Although the projected homeownership rate may seem alarming, it is actually just about what it was in 1950—55 percent—the first full year after implementation of the federal Housing Act of

1949.4 Historical and projected homeownership rates are illustrated in exhibit 3.

–  –  –

Historical and Projected Homeownership Rates, 1900–2050 Sources: U.S. decennial censuses to 2010; Arthur C. Nelson Implications The projected reduction in homeownership will certainly change the nature of housing needs. For one thing, there may be fewer White homeowners in 2050 than in 2015; indeed, all net change in housing demand among Whites may be for rental housing. Overall, the increase in rental housing may be equivalent to about 77 percent of the net change in households to 2050 (see exhibit 4).

Although there may be more homeowners in 2050 than in 2015, they may account for only about 23 percent of the net change in housing demand.

I suspect that by 2020 we will know much more than we do now about drivers of homeownership change. If the homeownership rate in 2020 roughly matches the projections of the Urban Institute (about 62.7 percent), Myers and Lee (about 61.0 percent), or me (about 61.9 percent), we may need to accept the downward homeownership trend as a long-term given. We will then need to adjust our community plans—and perhaps federal and state housing policies—to recognize this new reality. Maybe we should not wait.

–  –  –

Author Arthur C. Nelson is a professor of planning and real estate development and associate dean for research and discovery in the College of Architecture, Planning & Landscape Architecture at the University of Arizona.

References Chan, Sewin, Andrew Haughwout, and Joseph Tracy. 2015. How Mortgage Finance Affects the Urban Landscape. New York: Federal Reserve Bank of New York.

Council of Economic Advisors, The. 2014. 15 Facts About Millennials. Washington, DC: The White House.

Fry, Richard, Kim Parker, Jeffrey S. Passel, and Molly Rohal. 2014. In Post-Recession Era, Young Adults Drive Continuing Rise in Multi-Generational Living. Washington, DC: Pew Research Center.

http://www.pewsocialtrends.org/2014/07/17/in-post-recession-era-young-adults-drive-continuingrise-in-multi-generational-living/.

Goodman, Laurie, Rolf Pendall, and Jun Zhu. 2015. Headship and Homeownership: What Does the Future Hold? Washington, DC: Urban Institute.

Harney, Kenneth R. 2015. “New Rules Make It Tougher for People With College Loans To Buy Houses,” Washington Post, September 15. https://www.washingtonpost.com/realestate/new-rulesmake-it-tougher-for-people-with-college-loans-to-buy-houses/2015/09/15/a31a940a-5b0c-11e5b38e-06883aacba64_story.html.

Joint Center for Housing Studies of Harvard University. 2015. The State of the Nation’s Housing 2015.

Cambridge, MA: Joint Center for Housing Studies of Harvard University.

Kochhar, Rakesh, Richard Fry, and Molly Rohal. 2015. The American Middle Class Is Losing Ground.

Washington, DC: Pew Research Center. http://www.pewsocialtrends.org/2015/12/09/the-americanmiddle-class-is-losing-ground/.





Myers, Dowell, and Hyojung Lee. 2016. “Demographic Change and Future Urban Development.” In Land and the City, edited by George W. McCarthy, Gregory K. Ingram, and Samuel A. Moody.

Cambridge, MA: Lincoln Institute of Land Policy: 6–61.

Randazzo, Anthony. 2011. The Myth of Homeownership Wealth Creation. Los Angeles: Reason Foundation. http://reason.org/news/show/homeownership-wealth-creation-myth.

Woods & Poole Economics. 2015. The Complete Economic and Demographic Database 2015. Washington, DC: Woods & Poole Economics.

–  –  –

It would seem preposterous that the national homeownership rate could fall by 20 percentage points or more during the next 35 years. Homeownership is an accumulated status tied to the adult lifecycle and its aggregate changes are very slow moving, unlike indicators such as the unemployment rate. During the past 40 years, excepting the brief bubble interlude of the early 2000s, the U.S.

homeownership rate has not varied more than 4 percentage points, ranging from 62 to 66 percent, depending on sources.1 In addition, after the national rate fell from its bubble peak of 69 percent into its more typical range, analysts were quick to declare that the homeownership rate would now remain constant for the future at its 2013 Housing Vacancy Survey (HVS) level of 65 percent (Gabriel and Rosenthal, 2015). What, then, is to keep the momentum from carrying this decline further?

Only a cataclysmic disruption could produce a very large shift in the homeownership rate, and those changes would need to accumulate over many years. Forecasting to the distant year of 2050, with market conditions unknowable, resembles science fiction. Yet the financial crisis (beginning in 2007), the Great Recession (2008 and 2009), and the prolonged aftermath (through 2012 or even longer) have had cataclysmic impacts on the housing market, and, even if it is unclear how long these effects will linger, their mark may be indelible and long term for at least some cohorts of housing consumers.

A longer view clearly is warranted, one that is built on the forces of cumulative change, rather than on current factors that are unknowable even 5 years into the future. Make no mistake, home purchases occur in the moment, but homeownership is a quasicumulative status acquired over Four different sources are commonly used to measure homeownership rates, but their estimates vary slightly, and thus the sources are not interchangeable in the analysis of trends. The most frequently cited source of national trends is the Housing Vacancy Survey (HVS) derived from the Current Population Survey (CPS). This source yields the highest estimates and is the source of the widely cited 69.2 percent estimate of the peak homeownership rate in 2004 and 2005. Closely related are the estimates based on the Annual Social and Economic Characteristics (ASEC) file, also derived from the CPS. In 2010, the HVS and ASEC both estimated the nation’s homeownership rate at 66.8 percent. In the same year, the American Community Survey (ACS) estimate of the homeownership rate was 65.4 percent, nearly 1.5 percentage points lower. The decennial census of that year yielded another homeownership estimate, 65.1 percent, slightly lower than the ACS. Different studies use the alternative sources, which have different strengths, for different purposes. All are referenced in this article, but we are careful to not confuse trend analysis by combining the data inappropriately.

Cityscape 131 Cityscape: A Journal of Policy Development and Research • Volume 18, Number 1 • 2016 U.S. Department of Housing and Urban Development • Office of Policy Development and Research Myers and Lee decades of a housing career, and changes in the national homeownership rate are aggregated over time from many cohorts, most of whom bought their homes more than 10 years earlier. For such a long-range view, a demographic-based approach has particular advantages due to its emphasis on temporal momentum of cohorts. Here we adopt a view of homeownership accumulation that is rooted as much as 80 years in the past and extending 40 years into the future.

Background A homeownership rate in the low 40-percent range is not unheard of in the United States. That is where the nation stood in 1940, with 43.7 percent homeowners at the end of the decade of the Great Depression. That homeownership rate was surprisingly only 4.1 percentage points lower than the rate reported in the census taken in April 1930—47.8 percent—a rate still reflecting the heights of the 1920s before the effects of the stock market crash in the late fall of 1929 could dislodge many homeowners. If the housing malaise of the depression decade had continued another 25 years, the decline might be extrapolated to 14.4 percentage points, still well short of a prospective 20-point decline in 35 years.

Many forces have worked to expand the nation’s homeownership rate in recent decades, and current market and financing conditions, if they continued, could severely undermine the national rate. Yet, because of its nature, that damage would be wrought incrementally and cumulatively across the decades. Older people are a great stabilizing force, while young people are most at risk.

During the past century, at least since 1920, age groups older than 55 have held very high ownership rates, ranging from 60 to 85 percent in recent decades. Older households are relatively impervious to current market conditions, having purchased their homes in earlier decades, and given the accumulation of wealth and Social Security insurance later in life.2 Inertia is another powerful force, expressed through the typical reluctance of older people to make any move from a long-time home. Even though homeownership rates continue to rise slowly as cohorts grow older, what has most increased the ownership level of older age groups in recent decades is the entry of former middle-aged cohorts who carry higher homeownership rates accumulated during high prosperity decades of the postwar era. The long-range risk is that this process that has bolstered homeownership at older ages might run in reverse when disadvantaged cohorts from the recent decade begin to arrive at older status in the future.

By contrast with the older age group, young people once had very low rates of homeownership attainment but that rapidly increased after 1940. Before the institutional financial innovations of the 1930s and 40s, young people had to save many years to acquire as much as a 50-percent downpayment. Many would grow middle aged before they could buy a home. With new federally insured FHA and VA mortgage programs, however, requiring very low downpayments, the age at which families could buy a home was greatly accelerated (Fetter, 2013; Goodman and Nichols, 1997). In addition, the institutionalization of mortgages amortized over 30 years, rather than the 10 years that was often common, led to monthly carrying costs that were affordable to families Current family income also has one-fourth as much influence on tenure choice among people who are between the ages of 50 and 65 as among people who are age 30 (Gabriel and Rosenthal, 2015: Figure 3, panel A).

–  –  –

with more modest incomes. These mortgage innovations, combined with rapid postwar income growth, spurred an 18.3-percentage-point rise in the national homeownership rate by 1960. The sharpest picture of the impact these mortgage innovations had on young people is seen in the increases among 35- to 39-year-olds, whose ownership rate at the end of the Great Depression,

33.5 percent, rose more than 30 percentage points, to 64.6 percent, by 1960. This rate was even higher than the overall national rate at that time. The momentum in the future of these rising cohorts would support a continued rise in the national rate in subsequent decades.

Moving Forward From the Great Recession Young people have proven to be very vulnerable in recent years. Homeownership for ages 35 to 39 topped out at 69 percent in the 1980 census. From that point forward, homeownership attainment began to very slowly recede, likely under the pressure of growing affordability problems and also the effects of declining marriage and increasing diversity, both of which added people from groups with historically lower homeownership. The decline accelerated dramatically, however, following the financial crisis. Between 2008 and 2015, the homeownership rate of this age group fell from

64.6 to 55.1 percent (-9.5 points). Meanwhile, for those ages 70 to 74, the rate declined only slightly in the same time period, from 81.7 to 80.7 percent (-1.0 point).3 The low rates among today’s young adults, unless they were to accelerate well beyond the normal pace of increase in future years, have potential to depress the U.S. homeownership rate as these cohorts begin to replace their elders later in the century.



Pages:     | 1 |   ...   | 25 | 26 || 28 | 29 |   ...   | 38 |


Similar works:

«Inter-Institutional Academic Agreements Policy Academic Policy Group 1. Purpose: At a time when the University is entering into an increasing number of inter-institutional academic agreements, it is important that the University has a clear statement as to what it expects to achieve by entering into such agreements. The purpose of this policy is to ensure that all future Inter-Institutional Academic Agreements (IAAs) support the strategic direction of Victoria University of Wellington, are...»

«1 Visiting Creativity Country: A Policy-maker’s Travel Guide Ainslie Yardley and John Bailey (Australia) Abstract This contribution looks at the theatre artist as facilitator in the social policy realm. The authors discuss alternative interpretive angles and mediating possibilities offered by embodied creative processes, which are not otherwise available to social policy researchers. We discuss why social policy-makers need to be not only ‘informed’ by applied theatre research and...»

«34 Forestry Policy and Institutions Working Paper Scenario Development to Strengthen National Forest Policies and Programmes A review of future-oriented tools and approaches that support policy-making Scenario Development to Strengthen National Forest Policies and Programmes A review of future-oriented tools and approaches that support policy-making Michael den Herder,1 Chiranjeewee Khadka,2 Päivi Pelli,1 Bernhard Wolfslehner,3 Marieke Sandker,4 Marcus Lindner,1 Lauri Hetemäki,1 Ewald...»

«INTERNATIONAL MONETARY FUND Conditionality in Fund-Supported Programs—Policy Issues Prepared by the Policy Development and Review Department (In consultation with other departments) Approved by Jack Boorman February 16, 2001 Contents Pg I. Introduction II. Conditionality and Ownership: General Principles and Issues A. Purposes of Conditionality B. Principles of Program Monitoring C. Monitoring Tools D. Conditionality and Ownership III. Recent Experience with Conditionality IV. Streamlining...»

«2013 LOW-INCOME COUNTRIES GLOBAL RISKS AND VULNERABILITIES REPORT September 2013 IMF staff regularly produces papers proposing new IMF policies, exploring options for reform, or reviewing existing IMF policies and operations. The following documents have been released and are included in this package: The Staff Report on 2013 Low-Income Countries Global Risks and  Vulnerabilities Report, prepared by IMF staff and completed on September 6, 2013 for the Executive Board’s consideration on...»

«Evelyn Waugh That's What's Wrong with England Patrick Adcock Professor of English Abstract Evelyn Waugh, dead for over thirty years, is a social critic who can still stir violent controversy. His novels and nonfiction books, stylistically brilliant, take no prisoners. He satirizes the working class and the nonwhite races just as savagely as he satirizes everybody else. The Catholicism in his novels, especially in scenes which reveal the Hand of God directing human affairs, runs counter to...»

«Social Policy Research Centre Report Series Employment arrangements in social and community services receiving Commonwealth direct funding Final Report Natasha Cortis and Christine Eastman Report for Department of Education, Employment and Workplace Relations, and the Commonwealth Pay Equity Taskforce Social Policy Research Centre, September 2011 SPRC Report 4/12 For a full list of SPRC Publications visit: www.sprc.unsw.edu.au or contact: Publications, SPRC, Level 2, John Goodsell Building...»

«Timo Turja, Chief information specialist The Library of the Finnish Parliament The 28th IFLA Pre Conference of Library and Research Services for Parliaments, 8 to 10 August 2012 Helsinki Parliamentary Decision-making and the Politics of Knowledge Ladies and gentlemen, My talk today is about how knowledge is used in parliamentary decision-making. I would like to begin by discussing how research findings and scientific knowledge are used in representative bodies such as parliaments. I am sure we...»

«Public Policy Research and Training in Vietnam Public Policy Research and Training in Vietnam Edited by Toru Hashimoto Stefan Hell Sang-Woo Nam Asian Development Bank Institute Hanoi December 2005 Asian Development Bank Institute Kasumigaseki Building, 8th Floor 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan Tel: (81-3) 3593-5500 Fax: (81-3) 3593-5571 Email: info@adbi.org Website: www.adbi.org © 2005 Asian Development Bank Institute Publishing Permit/GPXB164-54/XB-QLXB dated 30/11/2005...»

«AD'4233 481 DI DIIllmeN Concept and Policy loh isa i Le Edi edb L. l men Tr Il fI Containment Concept and Policy.ootj...dOll !Li:._i_ Dist A. per telecon Ms. Jan Hietalu * National Defense University Ft. McNair K_ Washington, DC 20319-6000 No Longer sold by GPO *3,( 4/3/91 Containment Concept and Policy Based on a Symposium Cosponsored by the National Defense University and the Foreign Service Institute Edited by Terry L. Deibel John Lewis Gaddis IN TWO VOLUMES VOLUME TWO U National...»

«No. 78 – September 2015 Recent developments in the dairy sector in Eastern Africa Towards a regional policy framework for value chain development Susan Bingi and Fabien Tondel Key messages In Eastern Africa, the dairy sector East African countries face This note shows that there are is crucial for rural development, similar issues, notably low dairy opportunities to strengthen or poverty reduction and food and farm productivity and inadequate build upon existing regional nutrition security....»

«Los Angeles Convening on Youth Homelessness Addressing Youth Homelessness: Progress, Gaps, Opportunities and Challenges Convened by The National Alliance to End Homelessness The California Homeless Youth Project February 8, 2012 Report by André C. Wade, Program and Policy Analyst National Alliance to End Homelessness Editing contribution by Shahera Hyatt, Director California Homeless Youth Project Los Angeles Convening on Youth Homelessness Preface On February 8, 2012, individuals representing...»





 
<<  HOME   |    CONTACTS
2016 www.theses.xlibx.info - Theses, dissertations, documentation

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.