The social and private micro-level consequences of homeownership

This paper reviews trends in housing affordability in the U.S. over the past four decades. There is little evidence that owner-occupied housing has become less affordable. In contrast, there have been modest increases in the fraction of income that the median renter household devotes to housing. We find pronounced increases in the rent burdens for poor households. We explore the low-income rental market, analyzing the importance of changes in the income distribution, and in housing quality in affecting rent burdens. We conclude that zoning and land use restrictions are more important factors driving up rents. We also sketch out some policies that might improve housing affordability.

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Is housing unaffordable? why isn't it more affordable?

School Quality and Real House Prices: Inter- and Intrametropolitan Effects

Publisher Summary This chapter describes the concept of migration, selected facts about internal migration in developed countries, and the determinants of migration. In most advanced societies, inter-regional migration is a major mechanism through which labor resources are redistributed geographically, in response to changing economic and demographic forces. The determinants of migration are the factors that affect migration—including characteristics both of places and of persons and their families—while consequences of migration refer both to the performance of migrants in their new locations relative to a benchmark, such as their presumed performance in their former place of residence had they not moved and to the impacts that migrants have on others in sending and receiving areas. The human capital model provides a powerful analytical tool for the study of numerous important issues in labor economics, but this model does not provide a comparably powerful explanation of migration.

Chapter 12 Internal migration in developed countries

Prices, parents, and young people's household formation

We study the impact of homeowning on the cognitive and behavioral outcomes of children. Using four waves of a comprehensive national panel data set, we control for many social, demographic and economic variables previously found to influence child outcomes. The data are a panel, allowing us to control for unobserved household– and child–specific factors. We use a treatment effects model to address the issue of possible sample selection bias caused by unobserved variables that influence both the parent’s choice of whether to own or rent and whether to invest in their children. We find that owning a home compared with renting leads to a 13 to 23% higher quality home environment, greater cognitive ability and fewer child behavior problems. For children living in owned homes, math achievement is up to 9% higher, reading achievement is up to 7% higher, and children’s behavioral problems are 1 to 3% lower.

Does Homeownership Affect Child Outcomes

This study extends economic models of the joint decisions of living arrangement and home ownership. The cost of shelter is an important factor in determining whether youth live independently (apart from parents and other non-related adults) and the cost of home ownership relative to renting is important to the tenure decision (choice of owning or renting). Simulations suggest that post-1985 decline and eventual removal of the Australian subsidy for first-time home owners has lowered the home ownership rate among young households by 23% the equivalent of slowing the time to first ownership by two years. (authors)

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Independent Living and Home Ownership: An Analysis of Australian Youth

Home or Alone: The Costs of Independent Living for Youth

Does homeownership affect the outcomes of resident children? Using a national data set, we observed that children of homeowners have better home environments, high cognitive test scores, and fewer behavior problems than do children of renters. We find that these results hold even after controlling for a large number of economic, social, and demographic variables. Owning a home compared with renting leads to 13 to 23 percent higher quality home environment, ceteris paribus. The independent impact of homeownership combined with its positive impact on the home environment results in the children of owners achieving math scores up to nine percent higher, reading scores up to seven percent higher, and reductions in children's behavior problems of up to three percent. These findings suggest homeowners support programs should be targeted at households with young children.

The Impact of Homeownership on Child Outcomes. Low-Income Homeownership Working Paper Series.

This study follows teens through young adulthood as they transition to independent living. We focus on a little studied issue: why some youths live in groups rather than alone or with parents. This choice is important because the size of the group has a substantial impact on the demand for dwelling units; the more youths per dwelling the lower is aggregate demand and the greater is population density. Our study also adds to the knowledge of which factors influence youths' choice of destination as they leave the parental home. The empirical testing uses a discrete hazard model within a multinomial logit framework to allow for more than one possible state transition. We find that economic variables have little impact on the decision of whether to exit to a large versus a small group, while socio-demographic variables matter. We also test a new push-pull hypothesis and find that the pull of economic variables on the probability of exiting the parental home increases as youths reach their mid to late twenties.

R. Jean Haurin

Papers

Does Homeownership Affect Child Outcomes

Independent Living and Home Ownership: An Analysis of Australian Youth

Home or Alone: The Costs of Independent Living for Youth

The Impact of Homeownership on Child Outcomes. Low-Income Homeownership Working Paper Series.

Group living decisions as youths transition to adulthood