Homeownership and neighborhood stability

Abstract

A major objective of many neighborhood revitalization programs is to increase homeownership. Conventional wisdom holds that this is one of the best ways to stabilize areas in decline. This article questions convention by presenting a conceptual model of how homeownership rates might affect various indicators of neighborhood stability and by determining whether there is support for this model in the literature. The article also presents an original analysis of the relationship between homeownership rates and two measures of neighborhood stability. The literature review finds considerable support for an association between homeownership and both improved property maintenance and longer lengths of tenure. The analysis of census data similarly indicates less residential mobility and greater property value appreciation in areas with greater homeownership. Although initial values and citywide value changes appear to have much stronger effects on changes in property values than the tract homeownership rate, modest changes in homeownership rates are clearly associated with increased property values. © Fannie Mae Foundation 1996. All Rights Reserved.