The number of Americans who owntheir own homes fell again last week. This is barely even news anymore. The Census Bureau updates its count of homeowners and renters in America every three months, and with each update for the past decade, the tally of homeowners has slipped a bit more. Homeownership rates haven’t been as low as they are now since 1995.
The fall is more than a long hangover from the burst housing bubble. American homeownership has been slipping so steadily for so long that the massive scope of the decline has obscured its real meaning. It isn’t really a story about Americans drifting away from homeownership en masse, so much as it’s a story about a fundamental shift in where, and how, young Americans live.
Cities and towns in Massachusetts that want to survive need to recognize, and embrace, this shift. The easiest way to begin is to stop building single-family homes.
Homeownership in the United States peaked in mid-2004, at 69 percent. And while ownership rates have fallen across the board, the decline is especially pronounced among young Americans. Since 2004, homeownership among adults under age 35 has fallen one-and-a-half times as much as the national rate has fallen. Declines among those ages 30 to 34 have more than doubled the national average; the ownership rate among 30- to 34-year-olds is now as low as it’s been since at least the early 1980s.
Since young Americans are waiting longer than ever to take on a mortgage, the shift has enormous consequences for the way cities and towns grow. It means, on the most basic level, that they have to build more of the type of housing that folks are demanding — apartments — and less of the homes they don’t want. In Massachusetts, that means convincing local governments to change the way they’ve always approached growth.
There is no real state housing policy in Massachusetts. Municipalities control their own development. The state can only overrule local officials and force development on municipalities in very limited, painful circumstances. But for the most part, the state’s housing policy is whatever common elements emerge from 351 separate land use regimes. These different agendas usually add up to Massachusetts doing the exact opposite of what it needs to do in the housing arena.
Over the past two decades, Massachusetts has added new housing at roughly half the national rate. And when the state has added housing, it has added the wrong kind of housing. Most has come in the form of single-family homes. And the state has already built most of the single-family homes it will need for a generation.
The sharp shift away from homeownership among younger Americans means that, if Massachusetts is serious about attracting and retaining young workers, it can’t just continue churning out small quantities of large suburban homes. A report earlier this year by the Metropolitan Area Planning Council found that Massachusetts needs to add hundreds of thousands of new housing units by the year 2040, but found the vast majority of development demand will fall on apartments and condominiums. This means Boston, Cambridge, and Somerville need to keep cranking away on their recent building sprees. And it means that suburbs need to make their zoning fit modern housing demands, and focus on building up rental units in denser town centers, where the housing demand is greatest.