Housing Meeting, August 9 – Home Ownership

The August 9th meeting of the Housing Committee focused on Home Ownership in Middletown. During the Great Recession, so many people lost their homes that at the worst of the crisis, the city had over 3,000 vacant houses in the city. We struggled with lower city revenues to keep those vacant homes in compliance and to keep the grass mowed and to keep people from squatting in abandoned houses.

After the recession, there was a shift in many people’s thoughts on home ownership in general. Some had lost their home and never wanted to be in that position again. Others lost a home and their credit was so badly damaged that they couldn’t have become homeowners again if they wanted to buy a home.

We started the discussion with whether home ownership matters at all in this post-foreclosure crisis housing market? If it does, is there an ideal level of home ownership that we should be striving towards in Middletown? How does home ownership affect neighborhood stability and the goal to have a balance of housing options available to people wanting to live in Middletown?

We talked about the typical housing cycle that most of us go through in our life times.  We live at home… we move out to our first, cheap apartment… we get a better apartment as we get a little money…  we become first time home buyers… we move up in our career and have children and at some point move into whatever our largest and most expensive house is going to look like… and then we become empty-nesters… and finally retirees.

If we are going to recruit and retain quality families to live in Middletown, we need housing for all of those potential life cycle points and enough available housing that if you live here or want to move here, there are enough choices available to fit your individual needs.

That being said, does having the housing available necessarily mean that we must have homeowners living in the available housing?

We started with a review of how our home ownership rates compare to the rest of Butler County, the State of Ohio and the United States as a whole. Middletown’s home ownership rate is at 52.6%. The remainder of Butler County has 71.5% home ownership.  The State of Ohio has 66% home ownership overall and the United States has 63.6% home ownership across the country. Those data points are from the U.S. Census.

If you take percentages and transform them into houses, then for Middletown housing to look like the rest of Ohio (at 66% home ownership), we would need to convert 2,627 rental units back to home ownership.

I next asked the question more thoroughly as to whether home ownership really stabilizes neighborhoods. I provided two fairly lengthy articles that came to different conclusions. One was clearly yes. The other one said that homeowners are attracted to stable, low crime neighborhoods and therefore the correlation is not clear whether ownership causes stability or whether stability increases ownership levels?

I asked the committee whether we should set a home ownership goal for the city. The answer was that we should, and it made sense to them to start at the lower end of the census numbers in front of us and work towards the higher percentages. With that in mind, we said we would start with a goal of moving home ownership from 52.6% up to the US level of 63.6%.

I then laid out some of the tools that other communities have used to increase home ownership. Keep in mind that home ownership percentages go up not only by adding homeowners, but also by reducing rentals. Both tip the scales in the right direction. We looked at the following tools:

  • Add New Housing
  • Demolish Poor Quality Rentals
  • Fill Vacant Houses with Homeowners
  • Land Bank Home Renovation to Homeowners
  • Down Payment Assistance – Targeted
  • In-fill New Home Construction – Targeted
  • Housing Incentives to Professionals (City/School/Hospital/Artists?)
  • Housing Incentives to Recent College Graduates (Hamilton program)
  • Incentive to Relocate to Fill Open Jobs in the City (Workforce Development)
  • Lease to Own Program (Have Job/Bad Credit)
  • Land Cooperative (Have Job/ Low Income)
  • Renovation Programs – 203K, Others Grants/Loan Available to New Home Purchasers

We talked briefly about the issue of gentrification. If we recruit a large number of new homeowners to a particular neighborhood, especially if we are recruiting professionals to move into what has been a traditionally low income or minority neighborhood, how does that change the nature and culture of that neighborhood and does the increase in property values and home improvements and paved streets, etc., offset the changes caused by the new homeowners? That’s a question we’ll have to discuss more deeply as we pick a neighborhood for revitalization and look specifically at the housing and demographics of those individual homes.

For more information about the meeting or to view the presentation and materials discussed at the meeting, please click the link below.

https://www.cityofmiddletown.org/487/Housing-Information

 

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