Public Attitudes to Housing

Attitudes to Housing: A Comprehensive Review of Public Sentiments and Influencing Factors

This paper reviews the existing evidence on Public Attitudes to Housing. It is necessarily selective due to the scope of the project, but it aims to facilitate discussion by highlighting public attitudes to a range of key housing issues that are currently being debated. A range of factors influences how housing is perceived and consumed. Homeownership is the dominant tenure. But underpinning current debates are concerns about the appropriate reach of this tenure (especially within the context of a prudent mortgage market and with the risks to borrowers now more apparent), and the purpose of the other tenures in serving those households who cannot afford market housing.

Homeownership is the most common form of housing tenure in most countries. However, the housing crisis in America has reached critical levels, with home prices doubling in the last decade, nearly half of all renters being cost-burdened, homelessness hitting record highs, the median house being 45 years old with significant maintenance needs, and housing construction being down 60% while the population has grown 65%. These issues highlight the challenges faced by homeowners and the need for a prudent mortgage market to mitigate risks to borrowers.

Other tenures, such as renting (private and subsidised), play a crucial role in serving households who cannot afford market housing. The Housing Choice Voucher program, also known as the Section 8 voucher program, provides about $30 billion annually to low-income individuals and families to support their housing expenses. This program ensures that low-income households pay no more than 30% of their income in rent, with vouchers subsidizing the remaining rental payment. Project-based vouchers further support affordable housing developments by providing secure funding, increasing the financial viability of these projects.

Several factors influence public attitudes to housing, including economic conditions, societal preferences, and policy measures. Economic factors such as job growth and household equity contribute to the capacity for homeownership. The relationship between job growth and homeownership opportunities is significant, as more jobs generally create more opportunities for individuals to buy homes. Additionally, the end of the housing inventory shortage is expected to lead to more competitive pricing in the housing market.

The persistent wealth gap between homeowners and renters is a compelling argument for homeownership. Homeowners build equity over time through mortgage payments and property value appreciation, while renters often remain stagnant in wealth accumulation. This suggests that individuals looking for long-term financial stability would greatly benefit from investing in homeownership, particularly given the projections for rising home values and inventory stabilization.

Regional variations play a significant role in the dynamics of home buying. Different parts of the country may see varying rates of growth, especially in destinations where job growth is particularly robust. Metropolitan areas experiencing rapid job creation or high levels of investment may witness higher-than-average increases in home sales and property values. Conversely, regions that have lagged in employment opportunities could struggle to keep pace with the national increases in home sales. These regional trends influence public attitudes to housing, as individuals may be more inclined to invest in areas with better economic prospects.

Consumer behaviour significantly impacts housing market trends. Shifts in consumer preferences, such as the desire for larger homes with dedicated workspaces, sustainable living, and a preference for suburban areas, directly influence the housing market. Increased spending on homes leads to higher demand, competitive markets, and potential housing bubble risks. Additionally, the demand for elevated customer experiences, including personal touches, easy living, good service, community feel, and eco-friendly features, further shapes housing market trends.

Policy recommendations aimed at addressing the housing crisis can influence public attitudes to housing. The National Housing Crisis Task Force has outlined 40 specific policy recommendations organized around five key themes, including leading and focusing the nation, reducing barriers to production, mobilizing federal capital for production and preservation, and innovating with an industrial policy lens. These recommendations aim to create a more supportive environment for both buyers and sellers, fostering a more positive public attitude towards housing.

In conclusion, public attitudes to housing are influenced by a range of factors, including the dominance of homeownership, the role of other tenures, economic conditions, societal preferences, and policy measures. Addressing the housing crisis requires a comprehensive approach that considers these various factors to foster a more supportive and positive environment for all households.