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How does the current housing situation in America affect social and physical aspects of citizens' livelihoods?

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How does the current housing situation in America affect social and physical aspects of citizens' livelihoods?

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Landlords

Neckbeards

Government

Homeowners

Homeless People

Low Income Populations

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Homelessness

Rent vs. Buy

Zoning

Market

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Tim Henderson, Stateline

Tim Henderson covers demographics for Stateline. He has been a reporter at the Miami Herald, the Cincinnati Enquirer and The Journal News in suburban New York. Henderson became fascinated with census data in the early 1990s, when AOL offered the first computerized reports. Since then he has broken stories about population trends in South Florida, including a housing affordability analysis included in the 2007 Pulitzer-winning series "House of Lies" for the Miami Herald, and a prize-winning analysis of public pension irregularities for The Journal News. He has been a member and trainer for the National Institute for Computer-Assisted Reporting since its inception 20 years ago, specializing in online data access and visualization along with demographics.

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The nation's vacant homes present an opportunity - and a problem - Arkansas Advocate

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As construction costs for new homes and interest rates soar, vacant housing draws more attention as a way to quickly get more units on the market.

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Renting a Home vs. Owning a Home: An Overview

Buying a home is a huge part of the American Dream. Choosing to buy or rent, though, is a major decision that affects your financial health, lifestyle, and personal goals. Whichever option you choose depends entirely on your lifestyle and financial situation. Both require a regular income (so you can afford the payments and associated costs) and may also require a certain degree of effort to maintain.

But there are several differences that make renting and owning property distinctly different. Renting a property doesn't come with all the responsibilities associated with homeownership and you have more flexibility, as you aren't necessarily tied down to your property. Owning your home gives you a sizeable investment, but it does come at a big cost-both upfront and over the long run.

Owning a home isn't always better than renting, and renting is not always as simple as it seems. Here, we highlight some of the key differences between renting and buying.

Key Takeaways

Renting a Home

The biggest myth about renting is that you're throwing away money every month. This is not true. After all, you need a place to live, and that always costs money in one way or another. While it's true that you aren't building equity with monthly rent payments, not all of the costs of homeownership always go toward building equity.

When you rent, you know exactly your housing costs each month. This amount is indicated on your lease so you can plan accordingly. In some cases, your landlord may also include other costs within that amount, such as utilities, storage, and homeowner association (HOA) fees if you live in a condominium.

As a renter, you may face rent increases each time your lease is up for renewal. These rent increases can be even steeper if you live in certain parts of town. This may not be the case if you live in an area with rent ceilings and rent control, which limit how much a landlord can increase the rent, if at all.

Renting means you're able to move whenever your lease ends. However, it also means you could have to move suddenly if your landlord decides to sell the property or turn your apartment complex into condos. Less dramatically, they could just bump up the rent to more than you can afford.

Owning a Home

Homeownership brings both tangible and intangible benefits. Not only do you have your own home, but you can make decisions about the look and design of the space, and you also get a sense of stability and pride of ownership.

Keep in mind, though, that changing your mind about where you're living can be very expensive since real estate is an illiquid asset. You may not be able to sell when you want. And even if you do, you may not get it at the price you want, especially if the housing market is down. Even if it's up, there are significant transaction costs associated with selling your property.

The overall cost of homeownership tends to be higher than renting even if your mortgage payment is lower than the rent. Here are some expenses you'll be spending money on as a homeowner that you generally do not have to pay as a renter:

Property taxes

Trash pickup (some landlords require renters to pay this)

Water and sewer service (some landlords require renters to pay this)

Pest control

Tree trimming

Homeowners insurance

Pool cleaning (if you have one)

Lender-required flood insurance (in some areas)

Earthquake insurance (in some areas)

Mortgage interest can make up nearly all of your monthly payments in the early years of a long-term mortgage. It can take as many as 13 years before more of your payment goes toward the principal balance in a 30-year home loan. You'll spend about $72,000 in interest for a $100,000 loan at 4% for 30-years. Admittedly, you'll recoup some of that in tax deductions if you can itemize.

And let's not forget repairs and maintenance, which can be very costly. You may find yourself with an unexpected leak in the roof. Replacing your roof could cost an additional $12,000, which may not be covered under your home insurance policy.

Key Differences

Property Values

As noted above, homeownership is often touted as a way to build wealth. But like any other investment, certain factors can positively or negatively affect the value of your home, including:

Economic issues

Maintenance

Environmental concerns, such as nearby landfills and hazardous waste sites

Outdated interiors

Exterior conditions (your unruly neighbor's front yard littered with pink flamingos can impact your home value, too)

Housing surpluses

These factors can, of course, affect you as a renter, too. For instance, negative factors may help lower your rental costs. After all, the landlord may be desperate for income and may end up slashing the monthly price.

Tax Benefits

Homeowners may benefit from certain tax benefits. The home mortgage interest deduction reduces any out-of-pocket expenses during the early life of the loan, as long as deductions are itemized.

Of course, if you rent, you get no mortgage tax deduction at all. Keep in mind, that you can still take the standard deduction that's available to all taxpayers. The same is true for homeowners who don't have enough deductions to itemize individually

Repairs and Maintenance

As noted above, being a homeowner means you're responsible for maintenance and regular upkeep. This can be very costly. And renovation projects don't often increase your home's value by more than what you spend on them. According to Remodeling magazine, project costs continue to outweigh values, with an estimated 60 cents recouped for every dollar spent on repairs and renovations.

If you live in a community with an HOA, it may take some homeownership chores off your plate. That will usually cost a few hundred dollars a month. But beware of the headaches that association membership can entail. If you rent, your landlord will take care of all the repairs and maintenance, though of course they may not be done as quickly or as well as you would like.

The projects that recoup the most are not glamorous things you'll be excited about doing. The best return (and the only one on Remodeling's list that comes close to recouping its entire cost) comes from replacing a garage door.

Time Commitment

If you like having your evenings and weekends to use as you please, if you work long hours, or if you travel frequently, then the time commitment that comes with homeownership may be more than you want to take on. There are always projects that you will need or want to take care of, from finding a plumber to replacing a rusted-out pipe and repainting the bedroom to mowing the lawn.

Special Considerations

The decision to rent or own depends on your financial situation. But it's also about your comfort and vision for your future. Ignore people who tell you that owning always makes more sense in the long run or that renting is throwing away money. Disregard anyone who says that buying makes more sense if your monthly mortgage payment is more cost-efficient than your monthly rent payment. Housing markets and life circumstances are too varied to make blanket statements like these.

People were often prevented from owning land because of their race, ethnic background, beliefs, or marital status in the past. This is illegal. Although practices like redlining (where people are denied services because of their race or ethnicity) continue to deter members of minority groups from seeking to own a home, they shouldn't. The borrower's ability to make payments is the only factor that mortgage lenders should consider.

Before you do anything, be sure to weigh the risks involved, especially with buying a home. Getting a mortgage often requires using a large amount of financial leverage. If housing prices go up, people with mortgages can make extraordinary gains. But you also stand to lose if prices plummet. During the subprime meltdown, an unprecedented number of Americans ended up with underwater mortgages. The key is to pay attention to housing prices by looking at the Case-Shiller Index. If prices seem too high, renting for a few years may make more sense.

Still, despite the risk, added expense, and extra chores associated with owning a home, many people choose it over renting. It provides a more permanent place to raise children. It is also frequently the only way to have, or create, the sort of residence people want. Ultimately, the decision to rent or to own is not just financial. It is also emotional.

Is It Better to Rent or Own a Home?

There is no definitive answer about whether renting or owning a home is better. The answer depends on your own personal situation-your finances, lifestyle, and personal goals. You need to weigh out the benefits and the costs of each based on your income, savings, and how you live.

Is Renting Cheaper Than Owning a Home?

Renting can be a very predictable expense. You know what your costs are upfront and can plan accordingly. On the other hand, if you enjoy a lavish lifestyle, you may find renting to be more expensive than owning a home, even if there are repairs and regular maintenance you have to make with purchasing real estate.

Is Homeownership a Good Investment?

Buying a home can be a very good investment. You may be able to build equity. But as with any investment, just how well your investment performs depends on a number of factors. When it comes to real estate, factors like location, the economy, maintenance, and environmental concerns can affect the overall value. And keep in mind, that it's never static, so things can change.

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Renting vs. Buying a Home: What's the Difference?

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The differences between renting and owning a home are complex. Owning isn't always better than renting, and renting is not simpler for everyone.

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Rent or buy in 2023? Its definitely a tough choice. Rents are up. Home prices are up. Interest rates are up. What do we do?? Making smart real estate decisions always involves running the numbers. This is just 1 hypothetical example but i was shocked to see buying is still overwhelmingly better than renting in many situations.

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Homelessness continues to grow in California: nationally, California has topped the list for the state with the largest homeless population for more than a decade. As of 2022, 30% of all people in the United States experiencing homelessness resided in California, including half of all unsheltered people (115,491 in California; 233,832 in the US).

Every January, the federal government conducts a "Point in Time" (PIT) count of the nation's homeless population. While imperfect, this count serves as one of the few concrete measures of the homelessness crisis. Findings for this January's PIT count will not be available until later this year, but we have the results of the January 2022 PIT count. The 2022 count, released last December, offers the first complete data since the start of the coronavirus pandemic in March of 2020, as many counts were put on pause for health and safety reasons.

Changes from 2020 to 2022 reflect a new snapshot of California's homeless population. The pandemic caused federal and state-level responses to protect people experiencing homelessness, including offering hotel rooms as temporary housing, moratoriums on evictions, and expanded housing supports.

Since 2020, California's overall homeless population has increased about 6%, compared to just 0.4% in the rest of the country. A 17% increase in the homeless but sheltered population accounts for almost all of California's change, while the more visible unsheltered population increased 2%. The rest of the country's unsheltered population grew faster than California's (4%), while its sheltered population actually shrank (-2%).

States are divided into Continuums of Care (CoCs) that help plan and administer services to the homeless population. California has by far the most COCs of any state with 44; Florida is a distant second with 27. CoCs are also categorized for the geographic area they serve: urban, suburban, or rural. Across California, the sheltered homeless in major cities (22%) and in rural areas (26%) saw the largest growth. However, the homeless population in cities is more than ten times the rural homeless population (38,000 compared to 3,300). Furthermore, some categories saw small decreases-the rural and suburban unsheltered homeless populations fell by 12% and 3%, respectively.

The largest cities and CoCs in the state account for California's six largest homeless populations, or 64% of the state's homeless population. The Los Angeles CoC was largest at 38%, with San Jose (5.8%), Oakland (5.7%), Sacramento (5.4%), San Diego (4.9%) and San Francisco (4.5%) far behind.

Although CoC homeless populations vary greatly in size, trends over time are similar. The overall number of people experiencing homelessness has increased everywhere outside of the San Francisco and Orange County CoCs. Sheltered populations have also increased everywhere but the Orange CoC, while unsheltered population changes have been more mixed.

Pandemic homeless programs have begun to unwind and the substantial federal funding efforts around COVID are expiring; the disappearance of these programs and funds may alter the options available to people experiencing homelessness in California. The state is taking steps to point legislation toward addressing issues around homelessness-including setting up CARE courts for mental health support - while bipartisan pressure is growing to audit how recent funds were spent. As California works to adapt to changes after the pandemic, PPIC will continue to monitor and analyze trends affecting homeless populations.

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Homeless Populations Are Rising around California

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Between 2020 and 2022, California's homeless population increased by 6%. While this growth was largely concentrated in urban areas, the number of people experiencing homelessness declined in San Francisco and Orange County.

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Record-breaking numbers of families cannot afford a decent place to call home:

Nationally, there is a shortage of more than 7 million affordable homes for our nation's 10.8 million plus extremely low-income families. View The Gap

There is no state or county where a renter working full-time at minimum wage can afford a two-bedroom apartment. View the Out of Reach Map

Seventy percent of all extremely low-income families are severely cost-burdened, paying more than half their income on rent.

This is a problem! Every state and every community is impacted. Families have few options. Each year the shortage gets worse; and that's why people are homeless in our country and why families struggle to pay for groceries and visits to their doctor.

Why it Matters:

Housing is the key to reducing intergenerational poverty and increasing economic mobility. Research shows that increasing access to affordable housing is the most cost-effective strategy for reducing childhood poverty and increasing economic mobility in the United States. Stanford economist Raj Chetty found that children who moved to lower poverty neighborhoods saw their earnings as adults increase by approximately 31%, an increased likelihood of living in better neighborhoods as adults, and a lowered likelihood of becoming a single parent. Moreover, children living in stable, affordable homes are more likely to thrive in school and have greater opportunities to learn inside and outside the classroom.

Increasing access to affordable housing bolsters economic growth. Research shows that the shortage of affordable housing costs the American economy about $2 trillion a year in lower wages and productivity. Without affordable housing, families have constrained opportunities to increase earnings, causing slower GDP growth. In fact, researchers estimate that the growth in GDP between 1964 and 2009 would have been 13.5% higher if families had better access to affordable housing. This would have led to a $1.7 trillion increase in income, or $8,775 in additional wages per worker. Moreover, each dollar invested in affordable housing boosts local economies by leveraging public and private resources to generate income-including resident earnings and additional local tax revenue-and supports job creation and retention.

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Research shows that increasing access to affordable housing is the most cost-effective strategy for reducing childhood poverty and increasing economic mobility in the United States. Learn more here.