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The Social Consequences of Homeownership
Robert D. Dietz
*
Ohio State UniversityDepartment of EconomicsandCenter for Urban and Regional AnalysisJune 18, 2003
 
*
410 Arps Hall, 1945 N High Street, Columbus OH, 43210,dietz.32@osu.edu. Funding for this project was provided by theHomeownership Alliance. I thank Donald Haurin for his advice and useful suggestions, as well as Bruce Weinberg for hisguidance. This paper benefited greatly from research conducted in three earlier and more comprehensive reviews of homeownership, neighborhood effects and homeownership rates. These studies are cited at the end of this survey.
 
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Executive Summary
Homeownership confers social benefits to individuals and communitiesdue to the unique bundle of characteristics that are associated withhomeownership. These characteristics include a financial stake in the dwellingand its neighborhood, as well as increased transaction costs associated withsecuring and vacating an owner-occupied home.This study surveys the social science research catalogue concerning theimpacts of homeownership on individuals, households and neighborhoods. Itincludes studies from the social sciences, medicine, psychology, and otheracademic fields.As there are specific financial benefits for homeowners, there are alsospecific social benefits and consequences of homeownership, which includepositive impacts with respect to household stability, social involvement, localpolitical participation and activism, environmental awareness, child outcomes,health, crime, and community characteristics.Through their investment in the home – and therefore in the localneighborhood – homeowners appear to be overall more involved in theircommunities. These efforts by homeowners generate benefits for theircommunities in addition to the benefits for their families. These spillover benefitssuggest that the neighborhood homeownership rate itself may produce positivesocial consequences for communities. Initial empirical research is consistent withthis assertion.Specifically, there are four major areas of social benefits to homeownerswith respect to their families and their local communities:
 
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Children of homeowners are likely to perform higher on academicachievement tests and are more likely to finish high school.Furthermore, children of homeowners have fewer behavioralproblems in school and are less likely to become pregnant asteenagers. These outcomes survive many controls for parentaleducation, martial status, and other statistical comparisons, as wellas neighborhood characteristics.2.
 
Political activity, like voting, as well as participation in civicorganizations is higher among homeowners than renters aftercontrolling for personal characteristics and socioeconomic status.3.
 
Homeowners, again once controls are in place, are more satisfiedwith their lives and are happier.4.
 
Some of the most recent research suggests that a high level ofhomeownership in neighborhoods enhances property values.This survey reveals that economists, sociologists and other social scientistshave found significant, positive impacts for homeownership on a large set ofsocial outcomes. Given the governmental policy commitment to promotinghomeownership, an understanding of these impacts is critical in assessing theefficiency of these policies. Although the benefits of homeownership cannot yetbe quantified in dollar terms, an overview of the social science research literatureconfirms the existence of these benefits.Given these benefits of homeownership, owning a home may not makesense for everyone.
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For instance, if a family’s tenure in place is short, rentingmay make more financial sense than owning.
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