Home ownership benefits can include a better life
If you’re looking for reasons to buy a home other than providing shelter for your family and potentially as an investment, you may want to consider your future education, health and income opportunities.
Paying a home loan and owning your own place can determine those outcomes for parents and children, according to various types of research. Even the most basic housing assistance for low-income families helps them get on the first rung of the ladder to economic opportunity.
Along with being a place to sleep at night, cook meals and raise a family, owning a home can offer opportunities that go well beyond life’s necessities. Here are some of them:
Economic opportunity
Without affordable housing, poor people can be pushed into neighborhoods with high poverty and racial segregation.
A UC Berkeley study found that low-income families in the Bay Area — particularly minority families — had to move from racially diverse areas to less diverse ones because they couldn’t afford housing in diverse neighborhoods. A 30 percent increase in median rent paid was associated with a 21 percent decrease in low-income households of color, the study found.
Black per capita income is lower in areas with higher levels of economic and black-white segregation. A study by the Urban Institute on the effects of segregation found that in Chicago, for instance, just achieving median levels of economic and black-white segregation, black income would increase 15 percent.
In Detroit, housing prices in middle- and working-class neighborhoods that lost value in the foreclosure crisis were increased with help from community development organizations and residents, according to a 2017 study. Such efforts were less effective in high-poverty neighborhoods with lower rates of owner occupancy.
Housing assistance has been found to allow households to have a stable income base and save for the future, possibly to buy a home. Researchers at the University of Wisconsin at Madison have found that households with a housing voucher don’t use it as a substitution for work. After having a voucher for five years, families have higher work hours than their unsubsidized peers.
Economically healthy cities tend to have higher rankings on economic, racial and overall inclusion than distressed cities, according to research by the Urban Institute on economic recovery since the 2008 recession.
To recover from economic distress more inclusively, the researchers found that communities should adopt housing policies that create affordable, high-quality and well-located housing.
Access to good jobs in central locations with affordable housing, or at least good jobs that are accessible by public transportation, is linked to better pay and the ability of future generations to move up the economic ladder. Affordable housing near transit or job centers led to stronger economic prospects for residents, along with allowing employers to attract and retain workers, researchers have found.
Education
Home equity gives people the ability to send their children to college with less student loan debt and is the main source of retirement funds. Half of the assets of Americans over age 55 is in their home, according to a study by the MacArthur Foundation.
If home ownership rates decline, poverty rates among seniors and student loan debt of young adults can be expected to rise, according to Cityscape, a publication of the U.S. Department of Housing and Urban Development
High-quality schools, neighborhoods with low pollution, and other resources have become increasingly inaccessible for African Americans, according to a UC Berkeley report
Living in poor-quality housing and disadvantaged neighborhoods is associated with lower kindergarten readiness scores, according to the 2016 Children and Youth Services Review. Children living in homes that were in foreclosure, tax delinquency or owned by a speculator were more likely to receive worse kindergarten readiness scores than children in stable housing, the researchers found.
Living near a public school with high state test scores costs 2.4 times as much, or about $11,000 more a year, as housing near a low-scoring public school, according to a report by the Brookings Metropolitan Policy Program.
One study found that homeowners and property investors were more likely to make home improvements, which raised home values, if they lived near a quality public school with good test scores.
Higher property values — which can lead to more home equity by homeowners — correlated with quality schools and increased spending on residential investments, according to a 2015 study by Karen Mertens Horn. She found that in New York City, demand for schools may also affect the quality of housing stock by creating incentives for property owners to better maintain their homes, such as by adding square footage.
Investments in schools, Horn suggests, can improve housing prices and could be a tool for neighborhood revitalization.
Health
It may be a chicken-or-the-egg question, but not being a homeowner in a good neighborhood is a lot more unhealthy than being a homeowner, various studies have found.
Poor-quality housing is associated with risk for elevated blood lead levels, residential instability and child maltreatment such as child abuse and neglect, research funded by the MacArthur foundation has found.
New York City residents who stay in gentrifying neighborhoods have fewer hospital visits than those who are displaced by gentrification and move to non-gentrifying, low-income neighborhoods, according to a 2017 study by the New York City Department Health and Mental Hygiene.
Displaced residents have significantly higher rates of emergency, department visits, hospitalizations and mental health-related visits for about five years after displacement, the city found.
The 2011 American Housing Survey found that households with poor housing quality had 50 percent higher odds of asthma-related emergency department visit for a child in the past year. Homeownership was associated with a nearly 40 percent lower odds of an emergency visit to a hospital, even after adjusting for housing quality and housing-related exposure known to be associated with asthma.
An analysis of the 2015 American Housing Survey found that renter households with children were more likely to have asthma triggers in their homes than owners. Asthma triggers in a home include smoke, musty smells, pests, mold and leaks.
Recent Articles
Wave of Home Equity Defaults Coming?
Aaron Crowe
How Refinancing Can Hurt Insurance Rates
Kara Johnson
How can I get preapproved for a home loan?
Kirk Haverkamp
What's Different About Getting a Condo Mortgage?
David Mully
