By Morf Morford
Tacoma Daily Index
The rapid increase in housing costs has led to at least one entirely predictable consequence; more and more of us, working or not, are semi-permanently locked out of the home ownership equation.
Rising home equity has been a boon for home owners, while renters have been marginalized out of the financial momentum of the housing market.
As a result, not only are more potential home buyers relegated to rentals, but more communities are becoming statistically majority renters.
Nationwide, the number of renters grew by 22% – which means about 21 million people living in rentals.
In King County, White Center is the metro’s only suburb to hit a renter-majority mark this past decade, hitting 51%.
As recently as 2010, this community was still homeowner territory, even though 48% of its residents lived in a rented place.
SeaTac will almost certainly change from owner to renter-majority in the next few years. In 2019, the suburb was close to becoming a renter’s hub, with 49% of its residents renting their homes.
The city of Tacoma is going in roughly the same direction; according to the City’s own records just about half of us in Tacoma are home-owners.
In the year 2000, the home ownership rate was 51.7%. In 2010, it was 49.3%. In 2021 it was 52.9%.
The number of renters in Tacoma is steady (from 2000-2021) at about 40%.
Oddly enough, the vacancy rate is stable at a bit under 10%. In 2000 the vacancy rate was 6.1%, in 2010 it was 8.4% and in 2021 it was 7.5%.
In no economic system is this increasingly bifurcated economy a good sign.
Some commentators describe any and every society as packed with invisible “conveyor belts” – systems that under-gird every economy and that pull, almost always without any deliberate action or motivation, like gravity or magnetism, each one of us along a trajectory of life.
We don’t have a choice, after all, of our parents, and the multitude of choice they made that we, for better or worse, are compelled to live with.
Were your parents home-owners? College graduates? Single parents? Addicts?
Whatever they were, the likelihood is extremely strong that you too, will be swept up in the currents they set in place for you.
Renting or home-ownership is one of the most obvious of these “conveyor belts”. For most of us, home-ownership is the core of personal, and certainly generational wealth – or at least financial stability.
Renting is a “choice” – many times the only choice – for many.
But if you are looking for an immediately comprehensible example of this “conveyor belt” concept, housing would be it.
Home owners see their equity grow by the month (at least in the past few years).
“Equity” of course, means value – or, for renters in particular, cost.
As “value” goes up for home owners, “cost” goes up for renters.
In other words, when it comes to economic net worth, for home owners the financial “conveyor belt” goes up. For renters it goes down.
But for everyone involved, renters, owners and real estate professionals, among many others, the most important foundation of all, stability, is long gone.
And more and more Americans (and many Brits and Europeans as well) find themselves further and further from home ownership.
A home is far more than shelter – it’s where, and how we define ourselves.
It’s where we welcome others into our lives.
It’s where we discover, revel and share ourselves.
As the French philosopher Gaston Bachelard wrote: “A home shelters daydreaming, a home protects the dreamer, a home allows us to dream in peace.”
And more and more of us are being denied that place to “dream in peace.”
An estimated 2.1 million people were behind on their mortgage payments as of March 2021. For people who haven’t bought a home yet, mortgage payments are climbing far faster than incomes. As of July of 2021, median home prices were up 23 percent from last year while incomes were only up 3 percent.
As it always does, the “conveyor belt” is pulling some people up and some of us down.
Home ownership is, as we have all been told, and most of us believed, the center-piece of the “American Dream”.
Owning one’s own home, is a foundation of neighborhoods, of connection and of caring, in practical ways, for the place one lives and belongs.
Home ownership presumes, and relies upon, stability of income and relationships.
A threat to any one of those undermines all of them.
Renting is, by definition, temporary, even transitional.
Home ownership is, comparatively, semi-permanent.
Home office has a whole new meaning in 2021
Working from home has upended careers, commuting and even the commercial real estate market.
Offices are being converted to housing at a record pace in 2021.
Working from home not only convinces home owners to convert living space to office space, but also convinces office building owners to convert their currently (and perhaps permanently) unused office space to living spaces.
Just about every city has hundreds, if not thousands of potential housing units available on relatively short notice.
This will tilt the balance towards even more renters in our urban centers.
For more details on renting across America, take a look here – https://www.rentcafe.com/blog/rental-market/market-snapshots/picket-fences-for-rent-100-suburbs-turned-renter-majority-this-decade/.