Urban Homeownership Still Lags Behind National Average

Percentage of Homeownership   1990 2000 United States 64.2 66.2 New York 28.6 30.2 Los Angeles 39.4 38.6 Chicago 41.5 43.8 Houston 44.6 45.8 Philadelphia 61.9 59.3 Phoenix 59.1 60.7 San Diego 48.3 49.5 Dallas 44.1 43.2 San Antonio 54.0 58.1 Detroit 52.9 54.9 Indianapolis 56.7 58.7 San Francisco 34.5 35.0 Baltimore 48.6 50.3 Boston 30.9 32.2 Seattle 48.9 48.4 Denver 49.2 52.5 Las Vegas 50.4 59.1 Atlanta 43.1 43.7 Miami 33.1 34.9 Orlando 41.1 40.8 Source: U.S. Census Bureau

Contrary to popular belief, homeownership rates in most major cities did not increase as fast as the U.S. average during the 1990s, and in some cases they declined, according to the October 2001 Census Bureau report Housing Characteristics: 2000.

Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University, attributes this to two characteristics of urban areas: housing stock that structurally lends itself toward rental, and a historical preponderance of immigrant populations, who tend to be poorer and younger than native-born Americans.

“Homeownership is correlated with both income and age,” Retsinas says. “When immigrants came to this country, they weren’t necessarily poised for homeownership, but then they enter prime home buying age. To the extent they are successful economically, they are great candidates for future homeowners.”

Retsinas says one way to provide more housing in urban areas is by forming working partnerships with major employers in the cities. But most important, builders and politicians must look at regulatory, zoning and land-use barriers.

“Affordability is always a challenge, but within cities, a bigger barrier is availability of land,” Retsinas says. “The political leadership in cities have recommitted themselves to increased homeownership as part of an overall community development strategy, and there is already an incredible amount of creativity among builders and not-for-profits to make the numbers work if they have the opportunity.

“The ’90s were a decade of experimentation in cities like Cleveland and Boston, and a lot of them were successful. The challenge for this next decade is whether we can go beyond the pilot and achieve some scale.”