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Home
ownership, says a study, increases the chances of low-income kids attaining
higher levels of education, reduces idleness, cuts the incidence of teen
pregnancy, improves earnings, and reduces the need for welfare.
"The strongest
and most consistent effect of home ownership is on educational attainment,"
according to "Home Ownership Improves Lifestyles for the Poor in Distressed
Neighborhoods: Does This Make Sense?" a study conducted by the Institute for
Policy Studies at Baltimore-based John Hopkins University.
"A child who
always lived in an owned home is estimated to achieve nearly half a year of
school more than a child whose parents were always renters. The likelihoods of
graduating from high school and of attending college are both about 10
percentage points higher for children who always lived in an owned home," said
the study supported by the Fannie Mae Foundation.
Joseph
Harkness and Sandra J. Newman, institute professors who authored the study, say
the reports findings have important implications for a boot strap housing
policy.
"If home
ownership in itself has a positive effect -- even in otherwise distressed
neighborhoods -- then policies that enable poor people to own their own homes
should be encouraged," the study says.
The positive
effects of home ownership come somewhat from the extra equity income it
generates, but more so from the stability it provides by reducing the number of
times families move. When it comes to more education, fewer teen pregnancies and
less welfare, household stability is key.
"We find that
a large part of the positive impact of home ownership on children's adult
outcomes is attributable to the greater residential stability that it causes,"
the report said.
"We also find
that neighborhood effects, while small, are not negligible, and that children of
home owners are more likely to benefit from good neighborhood conditions, and to
be hurt by poor ones.
The study
found:
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Compared to a child who
never moves, a child who moves every year achieves approximately one year
less of education, has a 25 percent lower probability of graduating from
high school and approximately a 20 percent lower chance of obtaining
post-secondary education.
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Continuous home
ownership reduces the likelihood of idleness (not working, attending school
or caring for children) by 5 percent.
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Continuous home
ownership may reduce welfare dependence by about 5 percent.
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A 10 percent increase in
the neighborhood home ownership rate is estimated to increase early adult
annual earnings by $679.
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A 10 percent increase in
neighborhood home ownership rate reduces a home owner's daughter's chance of
a teen out-of-wedlock birth by 2.5 percent.
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A 10 percent increase in
neighborhood residential stability reduces a home owner's daughter's chance
of a teen out-of-wedlock birth by nearly 4 percentage points.
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The likelihood of a teen
out-of-wedlock birth for children who move every year is about 10 percent
higher than for children who never move.
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The likelihood of a
family going on welfare for those who move every year is 15 percent higher
than those who never move.
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qualified real estate planning professional prior to implementing any real estate planning
strategies. If you
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