Make us your home page
Instagram

Tampa's home ownership rate falls

How important is home ownership to a community? Conventional wisdom says the higher the ownership rate, the more attached, involved and committed people are to where they reside, and the more stable their own lives are likely to be.

It is that premise that's long driven housing and economic policy, right or wrong, in America. Improving home ownership rates has long been considered a good thing, though cascading home values have reopened that debate.

So what if we learn that the "official" home ownership rate in America is puffery and that the real rate is much lower? And what if we also learn that in certain metro areas — Tampa Bay being one of them — the "real" home ownership rate is shockingly lower? What does that mean for the local community in terms of stability and commitment?

A revealing analysis by researchers at the Federal Reserve Bank of New York found that figuring the real or effective home ownership rate from the "official" number can be determined by subtracting those people living in homes with negative equity, also known as people who owe more than their home is worth in today's market.

Officially, the nation's home ownership rate was 67.2 percent at the end of last year. But back out those with negative equity, and the difference between the official and effective home ownership rates, or what the Fed authors call the "home ownership gap," is about 5.6 percentage points. That means nationwide, the effective rate of home ownership is lower, closer to 62 percent.

That home ownership gap widens dramatically in metro areas like Tampa Bay. Officially, Tampa Bay's home ownership peaked several years ago at 74.1 percent. It now stands, officially, at 67.6 percent — still high.

But let's back out all those folks living in homes with negative equity. In Tampa Bay, that's a lot of folks, and their subtraction brings Tampa Bay's home ownership to just 51.2 percent. That's a home ownership gap here of just over 16 percentage points, a huge difference.

Nor is Tampa Bay the worst. Miami's home ownership gap is 22.5 percentage points. Out west, Phoenix's is 28.2 percentage points. And the king is Las Vegas, whose current "official" home ownership rate is a respectable 58.6 percent until you back out everyone with negative equity.

Then Las Vegas has an effective home ownership rate of just 14.7 percent and a home ownership gap of an astonishing 43.9 percentage points. The Case-Shiller home-price index was used to predict the number of underwater borrowers.

Are these New York Fed researchers just having fun with numbers, or might there be an important message in their analysis? The old argument, theses researchers say, is that because home owners have a financial interest in their property, they have incentives to take measures that will maintain or increase the value of that property, ranging from fixing a leaky roof and improving a neighborhood to staying more informed about government actions.

But what motivates home owners will not motivate people who owe more than their homes are worth. The Fed folks say they should be treated like renters and not be counted in home ownership rates. They are, the authors conclude, "renters in waiting."

Is this a bad thing? The implication is metro areas like Tampa Bay that face bigger home ownership gaps will suffer more from a decline in metro stability and commitment. But we've never experienced a housing decline of such magnitude, so this is new territory for even the housing gurus.

At the least, when it comes to home values and the virtues of ownership, we have become a nation of skeptics.

Robert Trigaux can be reached at [email protected]

Home ownership: Not as big as we think

Metro area Official home ownership % Effective home ownership %

Atlanta 66.4 57.4

Charlotte 68 63.2

Miami 67.1 44.6

New York 51.2 47.5

Phoenix 68.8 40.6

Tampa 67.6 51.2

Washington, DC 66.5 52.3

Source: The Home Ownership Gap, Federal Reserve Bank of New York



Home ownership: Not as big as we think

Metro areaOfficial Home Ownership %Effective Home Ownership %
Atlanta66.457.4
Charlotte6863.2
Miami67.144.6
New York51.247.5
Phoenix68.840.6
Tampa67.651.2
Washington, DC66.552.3
Metro areaOfficial Home Ownership %Effective Home Ownership %
Atlanta66.457.4
Charlotte6863.2
Miami67.144.6
New York51.247.5
Phoenix68.840.6
Tampa67.651.2
Washington, DC66.552.3

Source: The Home Ownership Gap, Federal Reserve Bank of New York

Tampa's home ownership rate falls 06/11/10 [Last modified: Friday, June 11, 2010 9:32pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. New York town approves Legoland proposal

    News

    GOSHEN, N.Y. — New York is one step closer to a Lego dreamland. Goshen, a small town about fifty miles northwest of the Big Apple, has approved the site plan for a $500 million Legoland amusement park.

    A small New York town, Goshen approved the site plan for a $500 million Legoland amusement park. Legoland Florida is in Winter Haven. [Times file  photo]
  2. Jordan Park to get $20 million makeover and new senior housing

    Real Estate

    By WAVENEY ANN MOORE

    Times Staff Writer

    ST. PETERSBURG —The St. Petersburg Housing Authority, which bought back the troubled Jordan Park public housing complex this year, plans to spend about $20 million to improve the 237-unit property and construct a new three-story building for …

    Jordan Park, the historic public housing complex, is back in the hands of the St. Petersburg Housing Authority. The agency is working to improve the 237-unit complex. But the latest plan to build a new three-story building for seniors will mean 31 families have to find new homes. [LARA CERRI   |   Tampa Bay Times]
  3. Coming soon at two Tampa Bay area hospitals: a cancer treatment that could replace chemo

    Health

    A new cancer treatment that could eventually replace chemotherapy and bone marrow transplants — along with their debilitating side effects — soon will be offered at two of Tampa Bay's top-tier hospitals.

    Dr. Frederick Locke at Moffitt Cancer Center in Tampa is a principal investigator for an experimental therapy that retrains white blood cells in the body's immune system to fight cancer cells. The U.S. Food and Drug Administration approved these so-called "CAR-T" treatments for adults this month. In trials, 82 percent of cases responded well to the treatment, and 44 percent are still in remission at least eight months later, Locke said. [CHRIS URSO   |   Times]
  4. Regulator blasts Wells Fargo for deceptive auto insurance program

    Banking

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.
[Photo by Spencer Platt/Getty Images, 2017]
  5. McDonald's soft serve in Florida is made with handshakes and happy cows

    Consumer

    Floridians licked nine million McDonald's vanilla cones last year.

    Calves play with a rubber toy at the Milking R Dairy in Okeechobee, FL. Owners Sutton Rucks, Jr., and his wife Kris Rucks sell their milk to SouthEast Dairies cooperative, Edward Coryn of Dairy Mix in St. Petersburg buys it, transforms it into soft-serve ice cream base, and sells it to all the McDonald's. SCOTT KEELER   |   Times