Alan Mallach concludes his recent commentary on the problem of declining homeownership (Do Urban Neighborhoods Need Homeowners?) with the important reminder that cities and policymakes should not neglect renters.
Yet, his argument leading up to this point is a prescription for continuing a century-old approach to housing that structurally advantages homeowners and disadvantages moderate- and low-income renters. More worryingly, his argument includes misleading statements about the benefits of ownership that indirectly stigmatizes renters.
Mallach is right to stress the massive loss of wealth many already struggling communities have experienced as a result of the foreclosure crisis and the decades of predatory lending that preceded it. By some accounts the loss of wealth for black and Latino communities in particular is unprecedented in scope. Mallach is also right to point to the threat posed to communities where large scale private equity investors are buying up formerly owner-occupied homes and converting them to rentals. This trend has received widespread media coverage and was the subject of a recent report, which I contributed to, by the Right to the City Alliance, The Rise of the Corporate Landlord.
Where he runs into trouble is in listing a series of correlations that don’t necessarily mean what he takes them to mean, which he offers as evidence of the many benefits of ownership compared with renting.
First, he equates the decline of ownership in some neighborhoods with an increase in poverty. While the decline in ownership, and the loss of wealth that came with it, certainly contributed to increases in poverty in many neighborhoods, it does not follow that increasing ownership is a solution to that poverty. Most, if not all, of these neighborhoods were already struggling long before the housing market crash as a result of decades of deindustrialization, disinvestment, and more recently, displacement. When the recession hit, these vulnerable communities of renters and homeowners alike, were hit hardest. The decline in ownership simply reflects much deeper problems that ownership did not, and will not, address.
Low-income communities and communities of color were disproportionately targeted by predatory lenders in the run up to the crash. The unprecedented rise in homeownership and wealth in these communities over the past 20 years was real but precarious. It is unclear how a new round of ownership expansion, under the same racially biased market model would lead to any difference in outcome years or decades from now.
Second, Mallach argues that homeownership is good in its own right because of the many studies showing correlations between ownership and positive social and economic outcomes. To see how misleading the implication here is, consider its opposite: renting, to sample from his list, is correlated with higher rates of juvenile delinquency, fewer positive child outcomes, less involvement in neighborhood activities, and less readiness to become involved in tackling the neighborhood’s problems, such as crime or disorder.
True? Perhaps. But does renting cause these outcomes? Unlikely. Renting simply is more prevalent in communities that struggle with these issues, and for reasons that boosting rates of homeownership don’t address, and may even worsen. Increasing rates of ownership, for example, raises property values and can contribute to gentrification and renter displacement.
My primary concern with Mallach’s commentary, though, is that in presenting misleading information about the benefits of ownership, he indirectly, and I’m sure inadvertently, contributes to the continued stigmatization of renters. His list of ownership’s virtues frames renters as bad neighbors and evokes an old but still powerful narrative, rooted in 1920s anti-communism, of homeowners as models citizens. I see the power of this narrative every day in my own work, in the dismissive attitudes of many local governments and others towards renters, who are often treated as second-class citizens. In one recent example, a local Realtors association here in Silicon Valley, where housing costs are unsustainable for most of the population, made the exact same argument that Mallach does in attacking rent control in a local paper. I responded to his argument here.
The bias toward homeowners extends beyond local discrimination. In the wake of the housing market crash, for example, the state of California passed a Homeowners Bill of Rights. No such concern has been shown to renters by the state, which has in fact limited, rather than extended, protections for renters in recent years. The bias is firmly embedded in federal policy as well. Federal spending supporting homeowners has at times outstripped spending on affordable rental housing at a rate of 4:1, and disproportionately benefits more affluent households.
Mallach is right that the decline in ownership is a problem, but he mistakes a symptom for the cause. Low- and moderate-income households, renters as well as homeowners, face multiple pressures that undermine their own tenure security as well as community health and stability. The obsession with ownership obscures more comprehensive solutions to the crisis of housing insecurity, solutions that must embrace rather than fret over the rise of renter households across the country. There is no reason renters cannot be a foundation of strong communities, as an examination of renters in societies where social policies don’t systematically undermine them reveals. Renters must be at the center of any genuine solution to the housing crisis and to broader efforts to address the deep social and economic inequalities that have come to define the country.
(Photo credit: Flickr user Michael Hicks, CC BY 2.0)