Housing Trends, the Confusion Continues

I don't doubt the laudable intentions and objectives of the Providence Journal's editorial board when it comes to the affordable housing issue. Still, being among the information elite in a region with a tendency toward liberal, even socialistic, solutions to every problem, their analysis has an understandable tilt. In yesterday's editorial on the matter, that tilt jostles the thinking, largely through a reliance on statistics disconnected with what they mean for actual people. Consider:

As elsewhere in the nation, New England's housing challenges cannot be met by state efforts alone. The Bush administration recently touted record home-ownership rates. But what it did not mention was that the hike was largely among the well-off, and mainly due to historically low interest rates. Home-ownership rates for low- and moderate-income working families with children have actually fallen since the 1970s, according to the Center for Housing Policy, from 62.5 percent to 56.6 percent. The rate has declined even for two-earner families.

Why a specific reason for record home-ownership rates is relevant, I don't know, so I'll leave that aside. On the claim about the hike's being among the "well-off," I not only can't find historical trend data for home-ownership by income, but I don't know what the editors consider "well-off" in these circumstances. The Center for Housing Policy's data (PDF) breaks down "working families with children" into five categories below 120% of the median income and lumps every income level above that into one. In 2001, which provided the Center's latest data, the median U.S. household income was $42,228, so 120% of that would be $50,000 — which probably isn't what most people think of as "well-off."

But what all of the above overlooks is something that nobody disputes: one way to increase home ownership is to increase income. A household earning below the median in the '70s that found more income and bought a house before 2001 would contribute to an increase in the higher bracket and a decrease in the lower one. Indeed, if that household had been a "working family with children" in the '70s, it probably would not be so now, dropping it entirely from the Center's data.

This hole in the statistics — that the categories capture demographics, not actual families — is probably very significant when observing the home-ownership of below-median working families. What the numbers show is a large drop between 1978 and 1991, with a gradual increase thereafter. What caused that? Reagan? I'd suggest that it could have had something to do with the Boomers' age range moving from 14–33 to 27–46. (Taking into account the median ages of women when they have each of their children (PDF), the average age at which Boomers became parents was 23, and the average parental age at which a Boomer's children were no longer children was 45.)

This discussion, as meaty as it may be, becomes less important when the Projo editors move on to a suggestion:

At the least, the federal government should be expanding its Section 8 voucher program, which helps low-income citizens cover rent. Instead, the White House has pulled back on the program.

Even pushing aside all argument about principles and the merits of forced self-reliance, one can suggest that the editors' suggestion will only exacerbate the specific disparity that they had just cited as evidence of a problem. If the government helps to cover rent, then taking on a mortgage will seem an increasingly distant objective and will represent a larger leap for comparable housing. In other words, if one believes in the significance of the Center for Housing Policy's claim that home-ownership, of itself, correlates with better behavior, better lives, among children (PDF), then an expanded Section 8 will only make matters worse.

As I suggested, the tripping obstacle appears to be the strong local inclination toward redistributionist policies, which bubbles through as the editorial ends:

With tax breaks benefiting the rich far more than aspiring moderate-income home owners, and with a still-mounting federal deficit bumping up interest rates, don't look for much relief on the affordable-housing front soon. The states will have to make do.

As one such aspirer, I can attest that the states, at least those that tax me, have plenty of room to "make do" in providing me with beneficial tax breaks. On principle, I'd prefer they do that than insist that the federal government add yet more income brackets to the "negative tax burden" side of the ledger.