Tom’s Take – The Case for Homeownership

Tom’s Take – The Case for Homeownership

Posted on April 1, 2024

The housing crisis in America, most severely felt in California, has many facets. Income inequality, stagnant wage growth, rising rents and home prices, paltry housing production, and high-interest rates locking homeowners into existing homes all contribute to the problem. Homelessness and housing instability, cost-burdened renters, and lack of opportunity to buy a first home are symptoms in both urban and rural markets.  

In this environment, it is tempting to take a triage approach to the crisis, focusing on the most dramatic needs first. This means the homeless and extremely low-income renters. SHE focuses a significant portion of its current housing efforts on this exact population, so we get it. But solely directing resources to this need, however well intentioned, is nearsighted.  

Self-Help Enterprises was born of an effort to provide an equitable opportunity for Latino farmworkers to achieve the dream of homeownership. This was the right thing to do back then and continues to be a core activity for the organization today.  

It has been well established that the central pathway to economic stability and building generational wealth is through homeownership. In recent years, the wealth gap between whites and people of color (particularly blacks) is mainly attributable to the relative percentages of each population that has achieved homeownership. It is also a historical certainty (chronicled in such works as The Color of Law, by Richard Rothstein) that, in addition to racist market practices such as redlining, the federal government was also a key player in such discrimination through the Federal Housing Administration, among other public programs.   

Given such truths, it is disturbing that homeownership gets kicked to the curb at the first sign of resource scarcity for affordable housing development. That is exactly what is happening at the moment. California is in a deep budget crisis, with deficits approaching $70 billion or more. Our governor – heretofore the most committed funder of affordable housing in California’s history – has proposed a budget that not only lacks any commitment to expanding homeownership but claws back committed funding for the CalHome program.  And the polarized environment in Congress makes federal funding for housing a yearly exercise in futility. The chilling effect on homeownership programs for low-income wage earners is palpable.  

The saddest part of this is that we have proof of concept with our mutual self-help housing program, as does other sweat equity models such as Habitat for Humanity chapters around the country. At SHE, we are also trying to ramp up our infill development program that will create additional homeownership opportunities. And our homebuyer assistance programs are lacking only available for-sale housing units for low-income homebuyers to purchase in order on to go to scale.   

People experiencing homelessness and other extremely low-income people deserve our attention and our resources. It is indeed a disgrace that so many people are unhoused in the most prosperous country in the world. We also must build more housing affordable to low income and workforce renters. But we mustn’t just do these things alone. We also need to make sure the dream of home ownership is available to more Americans. Homeownership does many things, including providing a platform to right historical wrongs and break the cycle of poverty for entire families. If we believe in racial justice, we must ensure a pathway to homeownership for first-generation low-income homebuyers. It’s the right thing to do.