September 27, 2016

Field Notes: The Future of Affordable Single-Family Homeownership

San Francisco

By James Artenson, Enterprise Rose Architectural Fellow

The current Enterprise Rose Architectural Fellows share their ideas, inspirations, and photos from the field on our blog. Learn more about the Fellowship.

The cost of single-family construction varies throughout the nation, but generally speaking the cost to develop a single-family home on a plot of land is greater than the comparable cost of other housing types such as twin homes, townhomes, condominiums, etc.  Given the additional expense, should affordable single-family homeownership be considered a viable form of affordable housing for the future? 

This question cannot be considered without understanding context.  Let’s begin with some facts from Minnesota, where I am a Rose Architectural Fellow at Southwest Minnesota Housing Partnership.

According to the Minnesota Housing Finance Agency an estimated 600,000 residents are considered cost-burdened, paying more than 30% of their monthly income for housing – a 69% increase since 2000.  Incomes are down 5.6% (after inflation).  Housing costs are up 8.1% and will continue to rise with rental vacancy rates around 3% and a limited 3 to 4 month supply of for-sale homes.  This mirrors a long developing national trend that puts increasing financial pressure on low to moderate income households.  Furthermore, Minnesota ranks third highest in the nation for homeownership, including approximately 70% of the population, which has unique sociological implications as well. 

The primary reasons why affordable single-family development may be considered worthwhile, in spite of the additional cost, begins with the financial benefits of homeownership.  The IRS Home Mortgage Interest Tax Deduction may not make up the difference between apartment rent and a home mortgage payment, but it does help, and in some cases it’s more than you’d expect.  Then there’s the simple fact that unlike rent, homeownership builds financial equity.  It is an investment, and a primary means of wealth creation for many Americans over the last century.

The second reason why affordable single-family development is worthwhile is community.  Like all homeownership, single-family homeownership is not only about an individual’s monetary investment, but social investment as well.  Communities benefit from the commitment homeownership brings in a variety of ways such as increased commerce, tax and service based income, more educational resources, volunteer activities, community participation, events, programs, etc.  The ever hopeful outcome of community investment through homeownership is greater stability and resiliency, gained through a shared social identity.

The last and perhaps most compelling reason for affordable single-family development is personal.  It is the enduring value of The American Dream; the societal concept that ties freedom, opportunity and hard work to the idea of home.  In rural America (where I spend much of my time) that concept is still very much alive, and it generally includes land ownership, not just a house.  Having lived in both urban and rural settings, I can say from experience that home has many forms and the variations are highly contextual.  For example, a condominium from a dense urban neighborhood would not satisfy the prevailing concept of “home” in a rural community.  Similarly, a single-family house may fit perfectly in a small town, but seem out of place in a large city.  The converse is true for multifamily buildings that appear “right at home” in an urban space.  So, home is tied closely to place.  The idea of home in a rural setting typically means a single-family home.  And at this point in time, the personal, social and cultural value of that concept of home, in a rural location, still transcends the additional expense.  The challenge is keeping it affordable for the future. 

Photos: Southwest Minnesota Housing Partnership

Drawing: James Arentson

About the Author: James is hosted by Southwest Minnesota Housing Partnership (SWMHP), a community development corporation based in Slayton, Minnesota. SWMHP serves twenty-seven counties in southern and west-central Minnesota, with additional projects in northwest Iowa. James works to incorporate comprehensive design practices into SWMHP’s pre-development process, enabling this leader in green building to maximize impacts on resident health, community space and energy efficiency.