JOEL KOTKIN: Landless Americans Are The New Serf Class.
The share of homeownership has dropped most rapidly among the key shapers of the American future—millennials, immigrants, minorities. Since 2000, the home ownership among those under 45 has plunged 20 percent. In places like Atlanta, Dallas-Fort Worth, Houston, and Indianapolis, and elsewhere, households with less than the median income qualify for a median-priced home with a 10 percent down payment, according to the National Association of Realtors. But in Seattle, Miami, and Denver, a household needs to make more than 120 percent of the median income to afford such median-priced house. In California, it’s even tougher: 140 percent in Los Angeles, 180 percent in San Diego, and over 190 percent in San Francisco.
Rents are rising as well. According to Zillow, for workers between the ages of 22 and 34, rent costs claim upwards of 45 percent of income in Los Angeles, San Francisco, New York, and Miami, compared to closer to 30 percent in Dallas-Fort Worth and Houston.
The basic reality: America’s new generation, particularly in some metros, increasingly seems destined to live as renters, without ever enjoying equity in property.
They’ll turn us all into beggars ’cause they’re easier to please. Plus:
In many regions of the country, conscious government planning discourages single-family home construction, a policy often described oddly enough as “smart growth.” Advocates of this approach suggest that most people, particularly millennials, do not want single-family homes, and prefer to live chock-a-bloc in dense multi-family units.
This does not reflect reality. In survey after survey, an overwhelming majority of millennials, including renters, want a home of their own. A Fannie Mae survey of people under 40 found that nearly 80 percent of renters thought owning made more financial sense, a sentiment shared by an even larger number of owners (PDF). They cited such things as asset appreciation, control over the living environment, and a hedge against rent increases. Roughly four in five purchases made by people under 35 are for single-family detached homes (PDF).
The real problem is a growing gap between what people want and what they can afford. Jason Furman (PDF), the former chairman of President Obama’s Council of Economic Advisers, has warned that price escalations associated with strong housing regulation push many people “out of the market entirely.”
Meanwhile, if the Congressional GOP were smart (I know, I know) they’d amend the Fair Housing Act to pre-empt local zoning and environmental laws that limit the construction of new housing. For the benefit of the less fortunate.