In just a couple of weeks, along with the end of school years and the start summer, organizations recognize achievements related to homeownership. June is widely recognized as National Homeownership Awareness month, and during the month of May attention is given within the industry to home renovation and improvement. For many decades, homeownership was practically an equivalent for achieving the “American dream” of stability, freedom, and economic prosperity. Homeowning families have been perceived to be co-creators of the stable, healthy, peaceful communities that serve as an aspirational model and standard.
In recent years, however, with the rise of the “millennial” generation and the general decline in homeownership rates, questions have emerged not only about the attainability of the traditionally defined American dream, but also about whether or not the dream should be redefined to reflect the realities of a new era. How can all families in America enjoy opportunities for upward mobility, as demonstrated by the ability to own their own home? How can the developments our country has experienced over the past year be addressed in a way that does not leave many low-income and vulnerable families behind, as we arrive at the “new normal” in the aftermath of a global pandemic?
New factors driving the attainability of this definition of economic stability and prosperity have emerged in the past year. The COVID-19 pandemic has shaken many families’ economic stability, and their abilities to either pursue or maintain homeownership. It has also widened the breach between the haves and the have-nots, the successful and the struggling. In September 2020, the Washington Post called the pandemic-induced recession “the most unequal in modern U.S. history.” In November 2020, the Brookings Institute reported that “the costs of the pandemic are being borne disproportionately by poorer segments of society.” The reasons for this worsening inequality are clear: Low-income people are more often employed in industries where they are considered essential workers, and working from home is not an option. They also cannot afford to stop working to stay home, either to take care of children who are no longer in school or to minimize virus exposure. Low-income people are more likely to have to continue taking public transportation during a pandemic, which also increases their risk of contracting illness.
As it relates to housing, other pressures have been brought to bear on the opportunities available to families. The Urban Institute reported in January of 2020 that in real terms (accounting for population growth), the available housing stock in the United States has contracted 0.2 percent since 2008. This decline in housing supply has occurred during a time of rising home prices, and the pandemic has fueled a market in which demand is far higher than supply, driving the prices even higher. For various reasons, less people are selling their homes (i.e. due to quarantine restrictions or fear of contracting COVID-19), while more people are buying – for reasons such as the historically low mortgage interest rates expected to continue through 2022; because families stuck at home during quarantine need more space to live comfortably; because lack of access to urban amenities during the pandemic has driven families to the suburbs; and others. In June of last year, a study by the National Bureau of Economic Research completed by researchers from the University of Chicago estimated that fully 37 percent of jobs in the United States can be done entirely remotely (from home), and the vast majority of these are higher-paying jobs. In other words, those with the luxury of working from home during the pandemic, are also those who can afford to buy a bigger home, or one located in the suburbs, to adapt to the pandemic environment. Lower-income workers, on the other hand, are more likely struggle to pay the rent or mortgage during the pandemic and suffer either job loss due to business closures or exposure to the virus while they continue working.
All of these conditions point to a country in which inequality, already at concerning levels before COVID-19, will grow starkly worse as we emerge from the pandemic. Rental assistance programs and moratoriums on eviction and foreclosure have helped many families stay in their homes during the immediate crisis, but there may be a tsunami gathering offshore as these programs approach their end date. Attom Data Solutions, an Irvine, California-based company that tracks foreclosure data, reported that filings were down 57 percent in 2020 compared to 2019, and down 93 percent compared to their peak in 2010 following the Great Recession. But when eviction and foreclosure moratoriums begin to phase out – projected for this summer, although state and federal governments continue to consider extensions to the timeline – many families will be faced with high levels of debt accumulated during the months when payments were suspended. Emergency rental assistance funds may help mitigate the levels of debt, but policymakers, community organizations, and other stakeholders still face great uncertainty in how families will make the transition back to full payment of their outstanding debts and ongoing financial obligations.
Governments and community support organizations must continue to monitor the levels of financial distress in communities, to ensure the past year of intervention is not undone by a tidal wave of debt called in by landlords and lenders. Absent another extension of the moratorium timeline, this summer will be a critical juncture in the long-term recovery of the communities most harmed by the pandemic.