June 22, 2016 The Skanner Page 9
News
By JOSH BOAK
Associated Press
MOUNT PLEASANT,
South Carolina — It’s a
troublesome story play-
ing out across America
in the 10 years since the
housing bubble peaked
and then burst in a ruin-
ous crash: As real estate
has climbed back, home-
owners are thriving
while renters are strug-
gling.
For many longtime
owners, times are good.
They’re enjoying the
beneits of growing equi-
ty and reduced mortgage
payments from ultra-low
rates.
But for America’s
growing class of renters,
surging costs, stagnant
pay and rising home
values have made it next
to impossible to save
enough to buy.
“
rental in Pittsburgh —
made it impossible to
save enough to buy a
home. With their rent
going up again, the cou-
ple moved to a cheaper
suburb in hopes of re-
paying their student debt
and saving for a starter
home.
“The best school dis-
trict is Mount Pleasant,
and we would like to be
there,” said Fabie, 27. “But
if you’re lucky you can
get some beat-up homes
for around $300,000.”
An exclusive analy-
sis by The Associated
Press of census data
covering over 300 com-
munities found that two
major forces are driv-
ing a wedge between the
fortunes of renters and
homeowners:
• Historically low mort-
gage rates have en-
abled homeowners to
nities at sharp discounts
and rented them out.
Many of the new tenants
belong to Generation X
households — ages 35 to
51 — that began renting
ater the crash, according
to the Harvard Universi-
ty Joint Center for Hous-
ing Studies.
Rents have also jumped
in areas that absorbed
many young college-edu-
cated job hunters. These
workers have increas-
ingly clustered in areas,
including Boston, San
Diego and Washington,
with abundant jobs but
high housing costs. The
result is delayed home
ownership for a popula-
tion group that histor-
ically had the means to
buy.
The AP analysis also
found a contrasting
belt of stability across
the Midwest where the
Half of all renters are now considered cost-bur-
dened, compared with just 24 percent in 1960
The possible conse-
quences are bleak for a
nation already grappling
with economic inequal-
ity: Whatever wealth
most Americans possess
mainly comes from home
equity. An enlarged rent-
er class means fewer
Americans can build that
same wealth and inan-
cial security.
Nearly two-thirds of
adults still own homes.
And some who rent do
so by choice. Yet owner-
ship has become a more
distant dream for the
many Americans who
still regard it as a route
to prosperity and pride.
The problem has become
especially severe in ar-
eas that ofer the best job
prospects as well as those
that have been battered
by foreclosures.
“It doesn’t paint a pret-
ty picture,” said Svenja
Gudell, chief economist
at Zillow, the online real
estate database company.
“You’re really blocking
out a group of buyers
from owning a home.
They’re truly living pay-
check to paycheck, and
that does not put them
into a good position to
buy.”
Joe Fabie and his wife
face just such a bind.
They moved to Mount
Pleasant, just over the
bridge from historic
Charleston, South Car-
olina ater law school
in Pittsburgh. The sub-
urb’s pastel-hued harbor
vistas, tin-roofed hous-
es and Spanish moss-
adorned live oaks were
enchanting.
But the rising rent
on their one-bedroom
apartment — more than
for their three-bedroom
reinance and shrink
their monthly pay-
ments, thereby reduc-
ing a major household
cost. The median annu-
al mortgage expense
for a U.S. homeowner
has dropped by $1,492
since 2006.
• A combination of fore-
closures and new col-
lege graduates crowd-
ing into the strongest
job markets has raised
demand for rentals.
Renters accounted for
all the 8 million-plus
net households the
United States added in
the past decade. Home
ownership has dipped
to 63.5 percent, near a
48-year low.
That demand has driv-
en up rents, which in
turn have prevented or
delayed people from buy-
ing irst homes.
The government says if
you spend more than 30
percent of your pretax
pay on housing, you are
“cost-burdened.” The to-
tal number of renters in
that category has jumped
more than 30 percent in
the past decade, to 21.2
million. Half of all rent-
ers are now considered
cost-burdened,
com-
pared with just 24 per-
cent in 1960.
These trends are re-
lected in how and where
Americans live. Subur-
ban cul-de-sacs built for
owners are now tilting
toward rentals, especial-
ly in such areas as Orlan-
do, Las Vegas and Tampa,
where the bubble and
crash were especially in-
tense.
Ater the bust, inves-
tors bought distressed
houses in these commu-
housing boom and melt-
down had little efect on
homeownership. Rates
of ownership remained
relatively stable, for ex-
AP PHOTO/CHUCK BURTON
10 Years After Housing Peaked, US is More of a Renter Nation
In this Tuesday, April 19, 2016, photo, Joe Fabie, right, and his wife, Christi, pose for a photo in front of their
rental home in Charleston, S.C. The Fabies left Mount Pleasant, S.C., to rent somewhere cheaper. Both have
law school debt and are saving to buy a home.
ample, in Minneapolis,
St. Louis and Kansas City,
Missouri, where starter
homes are comparatively
afordable.
But the transforma-
tions have been vast in
other areas, particular-
ly in smaller suburbs
where much of the coun-
try lives.
Both before and during
the housing boom, farm-
land around the country
was bought cheaply and
developed into houses,
schools and shopping
plazas — a build-out that
ignited homeownership.
Now, in a twist, many of
those cul-de-sacs are oc-
cupied by renters living
in homes whose former
owners lost them to fore-
closure.
To see just how drasti-
cally the foreclosure cri-
sis transformed certain
neighborhoods from the
domain of owners into
blocks of rental proper-
ties, consider the Orlan-
do suburbs.
The shit has been vivid
over the past ive years
in the Piedmont Park
neighborhood of Apop-
ka, a former agricultural
hub now crowded with
housing developments.
Where one in 10 homes
was once a rental, now
more than a third are.
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