As it happens, there is an article in the current issue of Shelterforce (#127, Vol. XXV:1, Pp. 8-13) by Winton Pitcoff "Has Homeownership Been Oversold". He quotes various national sources and takes quite the cook's tour of this topic.
Samples: "... houses affordable to low-income buyers are often older, in need of costly repair and located in depressed, crime-ridden neighborhoods with few jobs". "'Homeownership policy is being treated as an economic development policy, but it's really gambling,' says Anne Shlay, director, Center for Public Policy at Temple University. 'Low-income people are being encouraged to buy older homes with an unclear shelf life that may or may not appreciate in value.'" ... "Transaction and maintenance costs can negate low mortgage payments in some areas. Payments may remain constant over the life of a 30-year mortgage, but insurance, taxes, utilities and other expenses will likely increase. Lower-income families are more likely to borrow against the equity in their home, often at high rates, diminishing any accumulated wealth. Some studies have found that, setting aside the growth in home equity, low-income homeowners actually save less than renters and have fewer funds available for home maintenance or to cushion against income loss. With most or all of their savings in their homes, low-income homeowners are vulnerable to housing market downturns." Other tidbits: Foreclosures on FHA-backed loans have risen steadily as the economy as worsened; in 2000 tax adjusted housing costs as a share of income were 8% higher than 1999 while real income increased only 2%. "In the euphoria around homeownership, rental housing runs the risk of losing resources when it's already grossly underfunded relative to the needs of renters" says Eric Belsky, executive director of the Joint Center for Housing Studies at Harvard University. Well, you get the drift. If the NRP Policy Board had not passed the set-aside without any upper limit on eligibility I'd be inclined to a more charitable impression of what seems at best a na�ve impulse, given the literature on the matter. The author concludes: "Homeownership will never be right for everyone, and continued support for the rental market is needed as well. As constructed today, however, with limited research, obvious economic peril to a large population and potential for backlash that could have broad repercussions for the larger economy, the strategy of promoting homeownership for all seems dangerously short-sighted." Amen to that. Fred Markus, Horn Terrace, Ward Ten, in the Lyndale Neighborhood --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.459 / Virus Database: 258 - Release Date: 2/25/2003 TEMPORARY REMINDER: 1. Send all posts in plain-text format. 2. Cut as much of the post you're responding to as possible. ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Unsubscribe, Digest, and more: http://e-democracy.org/mpls
