This paper by The Heritage Foundation(PDF) says (on page 10) “Forty-three percent of all poor households own their own homes.” The footnote at the end of that paragraph references another paper by The Heritage Foundation.
I call bullshit. there’s no way that many low-income families own the home they are living in. My question is, what is the true percentage?
The version on the Heritage site has a footnote that links to the American Housing Survey for 2009 PDF. That survey says 15.7 millions poor households own their own homes. Given that there are around 45 million people living in poverty, if the average houshold is a little less than two people then the numbers add up.
I don’t have an actual answer for you, but that figure seems like a reasonable ballpark to me. Consider that houses in the poor neighborhoods can be dramatically cheaper than the nice houses in desirable neighborhoods. Even during the height of the housing boom, it was possible to find houses with prices in the lower five figures, which can translate to mortgage payments under $500/month. For a family around the poverty line, that mortgage payment is about the 30% of gross income that is the conventional wisdom for housing costs. And during the housing boom, there were also plenty of banks willing to lend to “subprime” borrowers.
There will also be a lot of cases where multiple generations will live in a house that was bought and payed off by someone in previous generations. An unskilled worker with a high school diploma could afford a lot more in 1950 than their grandchildren can today. The house can stay in the family for quite a long time.
And then there are cases where personal circumstances have changed for the worse; i.e. someone could easily afford a house sometime in the past, but since then they’ve lost their job and work part time. Those cases will be particularly common in recent years…
The Census (page 9) indicates that that number may be correct, or even a little low (though it also depends on what you mean by “low income” – the census divides things into median and above vs. below median). In 2006, below median family had a 53.4 home ownership rate. So the Heritage foundation number is not all that outrageous, though it is misleading.
The rate for below-median families is 30% lower than median-and-above, plus the houses are usually smaller. Also the 53% number will drop precipitously if you select the lowest quarter of income. In the Census report, someone who makes one dollar less than median counts the same as a person making minimum wage.
It depends on how you define “low income.” If you say “below median,” the number doesn’t sound so bad. If you use “lower 15%,” it will be far worse.
Also I am guessing “home” does not equal “house.” Here in the South, plenty of poor people own their own trailer or manufactured home.
Additionally, as was mentioned above, many poor people here live in an inherited home.
Right. They didn’t say that the homes had to be nice little suburban houses with a picket fence. I grew up in an area with a much higher percentage of people than normal living below the poverty line and almost all of them owned their own homes. Some of them lived in mobile homes (double-wides for the more affluent of the group) and many of those were bought used for less than the price of a new car. Some really poor people had houses like you normally only see in third-world countries but they were houses. It may be hard to imagine poor people buying houses if you live in a high cost of living area but there are plenty of areas of the U.S. where some houses are very cheap.
My high school honor society had an annual “river clean-up” project where we went out with trash bags and cleaned up the banks of the river that ran nearby to the school. Along these banks were many homes that were in severe disrepair, some of which were close to toppling into the river because the banks were slowly eroding out from underneath the house. I saw one house that was propped up with cinder blocks. Another house had a goat tethered outside, and it looked like the goat had chewed holes through the exterior siding.
I am pretty sure that most of the people living there did indeed own those homes, but they aren’t really anyone’s first choice for housing.
(This was in southeastern Ohio, FYI.)
That could explain it.
Thanks, all!
I have plenty of relatives living in poverty who own their homes. They’re rural poor. They own houses because they inherited them - the same family has lived in at least one of the houses for more than 200 years. They only thing they owe is property taxes, which on an unpretty farmhouse with a couple of ramshackle outbuildings can be pretty affordable. Plenty others live in trailers which they purchased cheap and moved onto their brother’s land, or their grandmother’s land, etc. Dig a well, lay a leach field and you’re good to go.
I’d be low income, but not low assets. I benefited by the misery of the times. I purchased a home that formerly sold for $98K for the HUD valuation of $22K. All I put in is about $500 in paint and miscellaneous. The kitchen and bath are totally updated. So there are various ways for the poor to become owners.