Home Ownership Improves Lifestyles
July 5,
2001 --
Realty Times Feature
Article by Broderick Perkins
Home
ownership, says a new study, increases the chances of
low-income kids attaining higher levels of education,
reduces idleness, cuts the incidence of teen pregnancy,
improves earnings, and reduces the need for welfare.
"The
strongest and most consistent effect of home ownership is
on educational attainment," according to a recently
completed study conducted by the Institute for Policy
Studies at Baltimore-based John Hopkins University.
"A
child who always lived in an owned home is estimated to
achieve nearly half a year of school more than a child
whose parents were always renters. The likelihood of
graduating from high school and of attending college are
both about 10 percentage points higher for children who
always lived in an owned home," said the study supported
by the Fannie Mae foundation.
Joseph Harkness and Sandra J. Newman, institute professors
who authored the study, say the reports findings have
important implications for a boot strap housing policy.
"If
home ownership in itself has a positive effect -- even in
otherwise distressed neighborhoods -- then policies that
enable poor people to own their own homes should be
encouraged," the study says.
The
positive effects of home ownership come somewhat from the
extra equity income it generates, but more so from the
stability it provides by reducing the number of times
families move. When it comes to more education, fewer teen
pregnancies and less welfare, household stability is key.
"We
find that a large part of the positive impact of home
ownership on children's adult outcomes is attributable to
the greater residential stability that it causes," the
report said.
"We
also find that neighborhood effects, while small, are not
negligible, and that children of home owners are more
likely to benefit from good neighborhood conditions, and
to be hurt by poor ones.
The
study found:
-
Compared to a child
who never moves, a child who moves every year achieves
approximately one year less of education, has a 25
percent lower probability of graduating from high school
and approximately a 20 percent lower chance of obtaining
post-secondary education.
-
Continuous home
ownership reduces the likelihood of idleness (not
working, attending school or caring for children) by 5
percent.
-
Continuous home
ownership may reduce welfare dependence by about 5
percent.
-
A 10 percent increase
in the neighborhood home ownership rate is estimated to
increase early adult annual earnings by $679.
-
A 10 percent increase
in neighborhood home ownership rate reduces a home
owner's daughter's chance of a teen out-of-wedlock birth
by 2.5 percent.
-
A 10 percent increase
in neighborhood residential stability reduces a home
owner's daughter's chance of a teen out-of-wedlock birth
by nearly 4 percentage points.
-
The likelihood of a
teen out-of-wedlock birth for children who move every
year is about 10 percent higher than for children who
never move.
-
The likelihood of a
family going on welfare for those who move every year is
15 percent higher than those who never move.
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