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Harlan: Stop focusing on boosting homeownership

There are visible signs in Costa Mesa that the housing market is recovering.

After a few years of virtually no new residential construction (between 2009 and 2012, Costa Mesa added only 56 new housing units, with zero in 2011), it's heartening to see construction crews busy and the Planning Commission agendas getting longer.

And while the real estate industry seems to gain some positive momentum, our elected and appointed officials continue to complain about an odd statistic. They are just not satisfied with Costa Mesa's homeownership rate.

Officials seem to think it's the city's job to improve the perceived imbalance between the percentage of homeowners and renters.

I'd be surprised if your average Costa Mesan (homeowner or renter) really knew the city's owner-renter ratio. It's about 40-60 for about 40,000 housing units, based on 2010 U.S. Census figures. That's the lowest rate in the county and among our neighboring communities: Newport Beach (55-45), Santa Ana (48-52), Irvine (50-50) and Huntington Beach (60-40). In every local city, though, there is a significant population of renters.

So why is a higher percentage of renters in Costa Mesa necessarily a bad thing?

The commonly held belief is that homeowners have a bigger stake in the community: They've made a significant financial commitment, and they have a longer-term interest in making sure their city of choice offers a solid return on their investment.

Homeowners, the theory goes, are also more likely to involve themselves in civic affairs, participate in youth athletic programs and school activities, and contribute to the local economy (through consumption of home improvement goods and services, as well as paying property taxes). Homeowners are rooted, and renters are merely transient.

At best these claims are anecdotal, and at worst they are ingrained in a historically discriminatory perspective. The subtext is that homeowners are simply a better class of people than renters.

There are a few problems with this line of thinking.

First, it paints all renters with the same broad brush. It lumps seniors, students, singles, couples and families together as if they are one monolithic community, defined by how they choose to pay for their shelter. These groups have different needs and personal preferences for housing.

For the majority of renters, leasing a home is a matter of necessity — they simply cannot afford the cost of ownership. Renting an apartment or house today in Costa Mesa is not cheap to begin with. According to online real estate database Zillow, Costa Mesa's median rental is $2,544, slightly above the county's. In fact, several local apartment complexes have waiting lists.

Second, many renters choose this option as a matter of lifestyle. They may not want the additional obligations of home ownership (maintenance, property taxes, insurance) and prefer to spend their income on other priorities. This is particularly true for many Millennials (those 20-somethings who would be prime prospective homebuyers), who watched the housing market implode and have shied away from making such an important capital investment.

Third, focusing solely on renters fails to consider another vital component of the equation: property owners. Some are vigilant and conscientious landlords, while others just collect the rent check and couldn't care less about maintaining or improving the building and landscaping. And there are plenty in between.

Of course, not every homeowner is necessarily a good steward of his or her property. In this economy especially, it's not uncommon for homeowners to be land rich but cash poor. Maintaining property — from exterior repairs to fresh landscaping to system upgrades — is costly and can effect a household budget significantly.

Every landowner, however, plays a role in contributing to a neighborhood's aesthetic identity and defining its desirability.

And that — desirability — should be a driving goal of our public policies and budget expenditures. Ask any real estate agent, and he or she will tell you that new buyers primarily care about the neighborhood — what it looks like, the crime rate, its proximity to parks and amenities, and the quality of the local schools. For prospective homebuyers, a city's homeownership rate is irrelevant.

Making policies and expending city resources based on this narrow, meaningless metric is futile. Increasing the homeownership rate is generally a task that goes far beyond the skills and resources of a local government. It can't really move the needle of homeownership in any significant way. Moreover, there's no percentage of homeownership that serves as a magical threshold for a community's stability or prosperity.

The city can, however, set the table for new investment with policies and programs aimed at practical and tangible solutions for improving neighborhoods and increasing the city's desirability.

We could invest more in infrastructure (sidewalks, street trees, bike paths), which adds both aesthetic and economic value, and shore up our public safety. As well, we should elevate the importance of high-quality design and construction, and create programs that encourage owners to upgrade and improve their properties.

Instead of worrying about whether someone owns a home, let's focus on keeping Costa Mesa one of the more diverse, eclectic and special communities in Orange County.

JEFFREY HARLAN is an urban planner who lives on the Eastside of Costa Mesa.

Copyright © 2014, The Baltimore Sun
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