Low-income Homeownership: American Dream or Delusion?

Abstract

This paper is a critical analysis of recent US policy to promote low-income homeownership. It examines the ideology and assumptions buttressing this policy, evidence on the effects of low-income homeownership and the viability of homeownership as a strategy for low-income families. Evidence suggests that the prospect for sustained growth in low-income homeownership may be limited. Research does not provide uniform support for it as a tool for asset accumulation, neighbourhood economic development or other social and political goals. Alleged effects of homeownership may be artefacts of self-selection and the conflation of homeownership with unobserved characteristics coincident with buying homes. What homeownership does and why are not well understood because of difficulties disentangling what homeownership means. The elevation of low-income homeownership to its current status has deflected political attention away from alternative policies for affordable housing.