8 reasons we need renters
The current housing crisis serves as a reminder that our communities need renters as much as they need homeowners.
It may be time to give a renter a hug. Or at least a place to live.
Long the nation's neglected stepchild, the renter has been overlooked by politicians and scorned by homeowners for decades.
The bias against renters has been growing ever since homeowners crossed into the majority in the 1950s. And where has it gotten us? We have a mortgage/financial crisis, clogged highways, abandoned houses, tax-strapped cities and working families now homeless and in need of affordable rental housing.
In fact, many of the country's current crises can be linked in some way to the desire to own a house with a yard and a white picket fence.
"It gives us a good reason to take a fresh look at stereotypes of ownership versus renting, and when you look at that you realize that we really haven't been good to renters," says Jeffrey Lubell, executive director of the Center for Housing Policy, a research arm of the National Housing Conference, an organization that advocates for national policies that promote affordable housing.
- Many land-use regulations and zoning laws discourage high-density housing, resulting in sprawl and high commuting costs.
- The U.S. tax code heavily favors homeowners, excluding many profits from home sales and returning $112 billion in property-tax deductions to homeowners from 2008-2012, according to the congressional Joint Committee on Taxation. An additional $90 billion will be returned to homeowners in 2009 through the mortgage-interest deduction alone. By contrast, less than one-third of that is appropriated to assist renters in the 2009 Housing and Urban Development (HUD) budget.
- People assume that renters — as a class of people — are irresponsible. "Renters are renters for a reason," a former landlord with the user name "linicx" wrote on a city-data forum, expressing a common sentiment.
- Entire neighborhoods even ban renters from their midst, forcing homes that no one will buy to sit empty. (See "Many towns tightening ‘no rental’ rules.")
In the end, current times may shine a new light on what housing wonks have been saying for years: that we need renters as much as they need us.
- Twitter users: Get the latest updates from MSN Real Estate
"Pretty much everybody at one point in their life rents, and that should give everyone pause that this is critical to the functioning of our communities," says Debra Schwartz, director of program-related investments at the MacArthur Foundation, which has launched a $150 million initiative to help revive affordable rental housing.
Here are eight ways that renters help our towns and why we need them:
1. So businesses can attract workers
Need to hire workers? Those workers — particularly the young, the mobile and the low-income earners — need housing. This should be a no-brainer, but unfortunately it's not.
"This is a real concern," says Peter Tatian, a senior research associate at the Urban Institute, a research organization that focuses on social and economic problems and issues. "They are seeing a problem attracting workers for particular kinds of jobs because of the housing costs."
When towns don't build rental housing, particularly affordable rental housing, near industrial and business centers, everyone pays: Businesses pay higher wages to offset employees' added transportation costs and residents pay higher taxes to beef up the roads, public transit systems and parking areas.
2. To let critical workers live in every community
"The reality is we need people of all income levels for our society to function," says Lubell. "In high-priced communities there are teachers and nurses and firefighters who cannot afford to live in the communities they serve. They have a long commute, or they're not there when we need them.
"Ultimately, if you want to attract the best firefighters, the best teachers, the best police officers, they need to have a place to live."
3. Because a mobile economy is a thriving economy
What if you had a job to offer, but no one could come? Millions of Americans now find themselves tied to their homes due to a weak sales market or the high transaction costs associated with selling and buying a home.
In an interesting study of European nations in the 1990s, British economist Andrew Oswald found that countries with high rates of homeownership also had high rates of unemployment, and vice versa.
"There's been a presumption that it's really good for a country to have a high rate of homeownership," Oswald told The Boston Globe. "But that homeownership equates with inflexibility."
4. To reduce sprawl
The well-worn saying in real estate is to drive out to where you can afford to buy.
"The ideal of homeownership, which is a single family with a yard, drives sprawl," says Tom Davis, manager of strategic operations for Preservation of Affordable Housing, a Boston nonprofit.
And it's hard to find anyone willing to talk up sprawl. Among its deleterious effects: traffic congestion, pollution, long commutes, less open space, less clean air and water, fewer small business districts and walking areas, more big-box stores.
Workers who cannot find viable rental options close to work — in either the city or the suburbs — drive and drive and drive.
Americans spend more than 540 million hours commuting in their cars every year, a pleasure which we all pay for with billions of dollars in highway construction, according to the U.S. Department of Transportation. The environment coughs up a donation, too, by remitting some of its oxygen.
"If families have to drive an hour to work in your community, there are going to be environmental problems and there's going to be congestion," Lubell says. "We are all tethered together, and I think the sooner we realize that, the better we'll all be."
Lubell attributes much of the apprehension around higher-density housing to fear of the unknown. "There is a myth about density that if we have too many people in one place that it will lead to problems," he says. Yet, "when you show people pictures of dense places - Greenwich Village, Paris — they love it. They say, 'Oh, I'd love to live there.'
"The reality is that a dense environment can offer a very high quality of life," he says. "But when you're living in a place where everyone has a car, you tend to think a lot more negatively about density."
Depending where u live owning a house and paying a mortgage may be cheaper than renting. I live in Brooklyn, N.Y. my parents own a Brownstone they paid off their mortgage and cld sell their house for $800,000 to 1 mil. They bought it in 1978 for $80,000. Their mortgage was only $700. a month this is for a 3 floor house with a basement and backyard. I have friends that pay more to rent a 1 room studio on the same block to me that's ridiculous. Also housing prices tend to go up even now with a bad housing mkt if they wanted to sell they wld still get alot more than what they paid. When u rent u pay each month and upon leaving get nothing. Also a condo seems to be the worst of both worlds u pay alot to buy the condo in N.Y. $175,000 + and u still have to pay a maintenance fee of at least $600. p/mth. Unlike a mortgage this maintenance fee never gets paid off. It's like buying a hse and renting monthly at the same time and most condos aren't as big as a hse.
One thing I completely agree with is how moving alot affects a child's academic sucess much more than if they live in a apt , hse or hsing project. Stability and continuity i.e. remaining at the same school r very important to a kids education as well as their ability to form healthy relationships and make friends. I'm a teacher and generally the kids that moved around alot some swithching schools 2 or 3 times in one school year do the worst. Also they never get the chance to make and keep friends.
The term "home ownership" is incorrect. If you are paying a mortgage then you are paying RENT to a bank. Let's not forget that if you do not pay your RENT to the bank you will be served with a notice to leave the property which is not owned by you but by the bank.
Oh and don't forget to pay your property taxes because if you don't pay them and even if you do not have a mortgage the government will happily take away your home.
I've rented my entire life and am getting close to having enough money to buy a house without a mortgage. But I know that a home is a place to live and I am not interested in being so stressed out struggling to keep it up.
I am quite happy that prices of homes are dropping where I live. Soon I will have an affordable property with no mortgage. The price of the home will be lower then the crazy recent bubble prices so my property taxes will be a lot less.
Thank goodness I was able to rent all these years and save money which has enabled me to save and buy a home without having to have mortgage.
Renting is good.
P.S. JUST AS SOON AS POSSIBLE I AM OUT OF THE RESIDENTIAL RENTAL MARKET
ANYONE WANT TO INVEST THEIR MONEY ??
I have both owned houses and rented apartments. I really have no interest in owning again. I love renting. I have been in my current apartment for the last 8 years. I pay less per month which allow me to save and invest money as I see fit. I have had some trouble with the current management company and may move in the next year. But I love the freedom I have to do other things and not be tied to a house.
Both my owned house and my rented apartment were my home, I take care of my home. I know lots of people who own who don't take care of their home so owning doesn't keep people from destroying the property.
I AM IN THE RESIDENTIAL RENTAL MARKET AS A LESSOR. I HAVE BEEN IN THAT MARKET FOR ABOUT 35-40 YEARS. THE PEOPLE RENTING TODAY ARE NOT OF THE SAME CHARACTER AND INTEGRITY OF MANY YEARS AGO. THEY ARE DIRTY , LAZY , IRRESPONSIBLE , AND EXPECT EVERYTHING TO BE DONE FOR THEM AND THEN NOT PAY THEIR RENT ON TIME OR AT ALL. ADDITIONALLY , OUR LAWS WORK AGAINST THE LESSOR AS THEY COURTS ARE SLOW TO ACT TO MOVE PEOPLE OUT WHEN THEY HAVE NOT PAID THEIR RENT. IF THE LAWYERS AND THE COURTS AND THE SHERIFFS DEPUTIES MOVED FASTER WE COULD AVOID MANY EVICTIONS. SLOW ACTION MEANS THAT THE TENANT MOVES FURTHER BEHIND ON THE RENT AND THEN THEY CAN NOT PAY. FAST ACTION MEANS THE TENANT WILL HAVE TO MAKE AN EFFORT BECAUSE THE LESSOR AND THE COURTS MEAN BUSINESS AND THUS AN EVICTION COULD BE AVOIDED.
IF THE UTILITIES ARE NOT PAID BY THE USER , THE SERVICE IS CUT OFF AND ESSENTIALLY THE USER IS "LOCKED OUT". IT WOULD BE NICE IF THE LESSOR HAD THE SAME PRIVILEGES AS THE UTILITIES. WE WOULD HAVE BETTER TENANTS , FEWER EVICTIONS AND LESS LOSSES IN THE RENTAL MARKET AND TENANTS MIGHT THEN NOT BE THOUGHT OF AS THE SCUM OF THE EARTH.
Renters are renters for a reason??? What reason is that? I hate stereotypes! :)
I'm a renter. I'm married with three children, ages 11-16. I rent a 4000 sq ft home built in 2000 on a 1/3 of an acre (no, I don't live in the country) in central California. Our credit scores are both above 750. We save a ridiculous amount of money into investments, etc, etc, etc. As a family, we make 250k+ a year. We have rented for 3 years and will rent for two more. Our owner LOVES us. We treat the home as if it was ours. We send our rent checks 6 months at a time. Our neighbors love us.
When we moved out of our last home, the owner was able to rent the home ONE day later. We replaced everything we broke, my husband filled nail holes AND texturized. We painted where it needed painted and cleaned the carpets. Wow, we got our entire deposit back and a glowing reference.
Why? Because I hate the town I live in but my kids older two love it. They love their HS. We will stay until they graduate and then move. Our youngest can makes friends with a rock. He'll be fine wherever we land.
Just like some home owners suck, so do some renters. I have a friend who works for a bank. They have walked into more than a few foreclosed houses that have been DESTROYED by the owners. People who make generalizations look like ignorant fools
This was a good article. Not everyone aspires to have that "McMansion" in the suburbs. The government even gives "homeowners" tax incentives. I would like to see some sort of tax advantages to renters. But there will always be that us versus them mentality.
I found a rental unit, close to my work - so I do not have to drive in a one hour (each way) back and forth. I hope that during this economic crisis, that communities would revamp their zoning ordinances to allow multiple-dwelling units. It only makes economic sense.
Well - hooray for the renter! My husband and I now rent a beautiful home in one of the top school districts in the state in a very high rent area. We did own a home prior - but had terrible financial times due to layoffs, and only 1 income with a child, etc. and left us in bankruptcy.
Now getting back on our feet. We are both college educated and held good paying jobs with a combined income over $100K - of course this USED to be middle class but no longer. This just gets you by in our times.
Now we are reducing debt slowly - keeping old cars and getting rid of car payments etc as we NEVER want to be in a bad financial position again. We have a young son and living in a wonderful area with good schools and opportunities were key. We are finally "making it" and saving a little.
We did NOT want to rent an appt. or townhome and were able to negotiate the rent from $2,000 down to $1,600 - for a 4 bedroom, 2 bath colonial home on 1 acre in an upscale area where homes typically go for $400,000 to $1million. The townhomes on our street that were developed go for $700K alone. We could never afford that mortgage! But we can take advantage of all that is here. Remember - rents are negotiable too not just homes for sale!
I say renting from a family can be a positive experience - you can get more headaches from a mgt. company that does not always heed you calls in need if its not an emergency. (I have heard from ones who have experienced it)
Our landlord lives across from us and sends contractors immediately to fix things. She is very responsive. And she is so happy we take wonderful care of the place with the lawn, etc.
I say - rent and live the life you want! We do not have to pay taxes, replace expensive systems, repairs roofs - etc. ITs true - you LOSE money buying a home.
And there IS a stigma with renting - I am trying to get over it as I once owned a home and all my friends do at 40 years old. But I have to think of all the positives with it.
So go rent - help make the stigma go away and live the life you want!
So renters are renters for a reason? as an x-landlord i can say i know the reason. after one left in mid month, turned off the power with food in the fridge and had painted the rooms blood red. while another called repeatedly to have a 1 inch square tile replaced because of a crack. it is a big headache and no matter how much you screen them you will get bad tenants. after 11 years of renting it out i said enough and sold just before the realestate plunge. i think i did the right thing
I rent because I choose to. I'm a single woman and the hassle of a house is just more than I'm willing to do. I make a very good living and would have no problem getting a loan.
I do get tired of homeowners getting breaks that I do not but if it really bothered me that much, I would buy a home.