Map: Are Low Home Ownership Levels Good for Cities?

    by
    1

    Are high levels of ownership good or bad for cities? Should the government push for more home ownership? What role do rental units play in the growth and vitality of cities?

    Journalist and web developer, Ken Schwencke, who also works for The New York Times, has added to the discussion of some of those questions by creating a nation-wide interactive map that shows renters and owners across the country. To build the map, he spent some serious time with the US Census Bureau’s 2013 American Community Survey data, zeroing in on home ownership.

    The red dots on his map represent renters, the blue dots, owners. Each dot represents 25 housing units, and they are placed randomly within a census tract — an area of about four to eight blocks in Brooklyn.

    Despite the frenzied housing market in Brooklyn over the last decade, the rate of home ownership has changed little. New York is a city of renters and Brooklyn is a borough of renters, as is made clear by the vast swaths of red in the map above.

    According to the New York Housing and Vacancy Survey of 2014 (PDF), Brooklyn’s home ownership rate is 29 percent, higher than Manhattan and the Bronx but lower than the city average and far below the national average of 63.4 percent. City-wide, the total number of owner-occupied units is up slightly from the previous year.

    Today the national home ownership rate is at its lowest point since 1967. But for cities a low home ownership rate may not be a bad thing.

    Cities in general have low levels of home ownership. And some of those that have seen the most economic growth recently have very low levels of home ownership.

    San Francisco

    San Francisco, a tiny city in comparison to New York, but one that is going through its own well-publicized and increasingly divisive real estate crunch, has a home ownership rate of 36.6 percent. (These home ownership rates are based on averages between 2009 and 2013 so they may be slightly higher than the 2013 rates portrayed in the maps).

    The neighborhoods in the city with higher home ownership rates — the Sunset and Outer Richmond, for example — have long been home to large numbers of middle class homeowners, and they are further from downtown and less effected by the tech boom .

    That is not unlike the neighborhoods in Brooklyn that have more blue dots: Midwood, Sheepshead Bay, Gravesend and other areas in the southern part of the borough far from the brownstone belt.

    Los Angeles 1

    Los Angeles, seen in the map above, also has vast tracts of red in some in-demand neighborhoods (though not the ultra rich ones) and its home ownership rate is only slightly higher than that of San Francisco at 37.6 percent.

    Miami

    Even Miami, a city surrounded by as much sprawl as Los Angeles, has a core of bright red renters and a home ownership rate closer to that of New York City at 32.8 percent.

    Detroit1

    What city has a high rate of home ownership? Detroit at 51.9 percent. Home ownership is hardly responsible for the vast challenges facing that city and others in the rust belt but it’s a characteristic that many of them share.

    Cleveland, for example, has a home ownership rate of 44.9 percent. As an article on these maps in CityLab points out, some studies have found a link between high rates of home ownership and unemployment. Low cost-housing often indicates other economic problems in the region (as is the case in Detroit).

    A high percentage of rental stock may be one of the characteristics that helps cities lure new talent and a younger population. The financial bar to home ownership in these expensive cities is very high and few young people have the funds for a down payment.  Renting, as generations of New Yorkers can attest, is just fine.

    But affordability remains as much a problem for renters as it does for owners. As is clear from the steady drumbeat of quarterly market reports, vacancy rates remain low — 3.06 percent in Brooklyn in 2014, according to the Housing and Vacancy Survey.

    Demand is high and both rents and property prices have climbed dramatically since the recovery from the financial crisis began years ago. At the same time, wages have remained stagnant. According to the survey, a third of New Yorkers spend half or more of their monthly income on rent.

    Brooklyn Rents Stabilize While Sales Prices Soar [Brownstoner]
    Mapping America’s Renters [CityLab]

    What's Happening