We can make it possible for more Americans to become homeowners | Opinion
Homeownership is the ticket to the so-called American Dream. There are no landlords to raise your rent, you can paint any color you want, and your monthly payments build up equity for you, not someone else. In fact, becoming a homeowner is the single best way to build financial security. What’s not to like?
Beyond the individual benefits, homeownership is widely seen as the cornerstone of stable neighborhoods, and by extension the foundation of strong communities. National averages from the 2020 U.S. Census show that renters move every two to three years while homeowners move every eight years. While most renters would prefer to stay put to avoid moving expenses and high rental deposits, they lack the control that owners have over their homes.
On a personal level, the housing stability of owners also builds another kind of wealth — the value of neighborly rapport where folks next door learn your name, how many kids you have and what’s in your garden. Often, renters are viewed as simply passing through.
The U.S. used to be a renter-majority nation. That changed with the post-World War II housing boom, largely spurred by the GI Bill and other homeowner assistance that gave rise to an owner-majority. By 1960, nearly 62% owned their own home. Since then, homeownership has climbed to nearly 66% of all U.S. residents.
Unfortunately, not everyone benefited. As NPR correspondent Quill Lawrence wrote in 2022, “In 1944, the GI Bill lifted a generation into the middle class – but excluded Black vets who served their country at war and came home to segregation.”
The GI Bill followed the model first developed as part of the New Deal’s Housing Act that deliberately excluded individual Black homebuyers and entire Black neighborhoods. In a practice called “redlining,” color-coded maps dictated where mortgage insurance, federal home loans and other federal subsidies could be used. Private lenders followed suit.
The results solidified a stark racial divide in housing. While first-time home-buyer programs, lending reforms and other fair housing measures have addressed racial disparities, significant differences remain today, with 72% of whites being homeowners compared to 63% of Asians, 51% of Latino/Latinx people and 44% of Blacks.
We don’t have readily available local data on homeowner rates by race, but presumably the national statistics apply here, perhaps accentuated by the fact that the 2020 U.S. Census found Thurston County is nearly 82% white.
I corresponded with Carly Colgan of Habitat for Humanity, a non-profit dedicated to helping people become first-time homebuyers. Colgan wrote, “Years of discriminatory housing policy have kept generations of BIPOC (Black, Indigenous and People of Color) people from achieving the ‘American Dream’ of owning a home. Habitat seeks to address both housing and race equity by helping low-income people become first-time home buyers.”
When we think of federal housing subsidies, we imagine public housing or other low-income programs serving renters or homeless people. In 2015, the total budget for Housing & Urban Development (HUD) was $46.66 billion — a lot of money. But that’s about a third of the $134 billion dollar in tax breaks for homeowners through the Mortgage Interest Deduction (MID) program in 2015, according to Matthew Desmond, writing for New York Times magazine. This means the single largest government housing program benefits homeowners.
Even among homeowners, the MID only works for taxpayers who itemize, typically higher income people with other write-offs. Essentially, our largest housing program overwhelmingly benefits those with high incomes with the least need for assistance. At the very least, converting this tax deduction to a tax credit would make it far easier for low- and moderate-income homeowners to claim the benefit — but the MID remains an untouchable tax policy politically.
Shouldn’t the value of tax-funded housing programs be distributed more fairly? We all benefit from stable neighborhoods and strong communities, even those taxpayers who dislike low-income programs. Tax reform, fair housing enforcement and first-time homebuyer programs are just some of the policy tools we know will help more of our neighbors find a home of their own.
If it’s really the American Dream, it deserves the investment.
Anna Schlecht is retired from the City of Olympia where she worked on housing and homeless issues for several decades. This column is part of her year-long exploration of housing issues in our region.