Thursday, May 05, 2011

Metro Detroit Home Ownership Plunges by 40,000

May 5, 2011

Metro Detroit home ownership plunges by 40,000

Empty residences in Michigan grew by 210,000 since 2000

The Detroit News

The recession, high unemployment and the foreclosure crisis turned tens of thousands of Metro Detroit homeowners into renters, with far-reaching implications for schools, the economy and neighborhood stability.

New 2010 census data released today reveal a steep decline in home ownership, with 40,000 fewer owner-occupied homes in Wayne, Oakland, Macomb and Livingston counties than 10 years earlier.

Almost all communities suffered a decrease in home ownership, with the biggest losses in inner-ring suburbs, such as Oak Park (14.2 percentage points), Harper Woods (11 percentage points), Hazel Park (9.1 percentage points) and Dearborn Heights (7.4 percentage points).

The data reflect the hard reality Metro Detroiters have faced in recent years, as the state struggled through an almost decade-long recession.

Thousands lost their homes to foreclosure and, unable to get loans, turned to rentals. Thousands more were saddled with homes they couldn't sell when the housing bubble burst and turned their houses into rentals.

"It was the American Dream to own a home," said James Malott, 55, of Whitmore Lake. "Then everything fell apart, and it turned into a nightmare."

Statewide, nearly 660,000 housing units were reported vacant in 2010, up more than 210,000 from a decade earlier as the overall state vacancy rate rose to 14.6 percent from 10.6 percent.

The vacancy rates nearly doubled in Wayne, Oakland and Macomb counties. In Wayne County, nearly 61,000 more properties were left empty, most of them in Detroit.

From 1950 to 1970, Michigan led the nation in home ownership. The state was still No. 3 a decade ago. Because census data from the states are being released over a period of weeks, it's too early to determine where Michigan ranks now.

Home ownership in Michigan dropped 1.7 percent in the past decade, though with 71.2 percent of homes owner-occupied, the state is likely still above the national average that will be released later this year. Census data from 2009 pegged the national rate at 65.9 percent.

The census also released data on age, household size and family composition. The state's median age jumped more than three years, now at 38.9. It was 35.5 in 2000. Ten counties now have a median age over 50, most in the northern part of the state.

Hamtramck is the youngest community in the region, with a median age of just under 29 years, and had the largest average household size at 3.1 persons. The city has seen a large influx of Asian immigrants with young families, which has helped put its young population, those under age 5, at nearly 10 percent, the highest in the region. Bingham Farms is the oldest community, with a median age of 59.7.

Washtenaw County gains

Around the state, home ownership rose in only a handful of counties, most of them sparsely populated and in northern Michigan, though Washtenaw had the largest gain, inching up 1.1 percentage points. In Kent County in western Michigan, home ownership fell less than 1 percentage point; while in Ingham County, home to the state capital and Michigan State University, home ownership fell 1.5 percentage points.

Keweenaw County in the Upper Peninsula had the highest home ownership rate, at nearly 90 percent.

Across Metro Detroit, home ownership dropped about 2 percentage points. Livingston County, though having the highest homeownership rate at 85.3 percent, fell the most. Detroit dropped from almost 55 percent home ownership to 51 percent.

The drop is partly attributable to Michigan's high level of out-migration, said Sirisha Uppalapati, planning analyst with the Southeast Michigan Council of Governments, a regional planning group.

Michigan was the only state to lose population in the past decade, a result of residents believed to be leaving in search of jobs. The typical person who moves for a job — young and highly educated — also is the type of person most likely to own or eventually own a home, Uppalapati said.

Mortgage policies also played a role, said Mark Skidmore, economics professor at Michigan State University. Federal policies encouraging home ownership allowed buyers who in the past wouldn't have qualified for a loan to get their own piece of the American Dream. Thousands of those questionable loans ended in foreclosure as the economy took a nose dive.

"We're seeing a decline in home ownership in part because of the crash of the housing market and the tough economy and loss of jobs," Skidmore said.

'A bitter taste'

In Whitmore Lake, Malott owned a three-bedroom, 31/2-bath ranch for 10 years. He lost the home to foreclosure in 2009 after battling cancer. He now rents the same house for the cost of the property tax while the finance company that owns the home attempts to sell it.

Malott has no intention of buying another home. "The situation has left a bitter taste in my mouth," he said.

A decrease in home ownership can hurt a community, Uppalapati said. "Typically, when a community has lower owner-occupied (housing), it reduces (property) taxes collected and affects the stability of neighborhoods. People in rental units tend to be more mobile."

As the number of rental properties has increased, landlords are having more trouble keeping tenants, said Craig Tucker, landlord of a home in Hazel Park. "People are more fluid," he said.

Renters move more often, which results in children changing schools more often. "When kids are moving because their parents don't have jobs, that affects (school) performance," Skidmore said.

MSU economics professor Charles Ballard said he feels home ownership levels may be returning to a more sustainable level."While home ownership is a good thing, it's possible to have too much of a good thing," Ballard said. "It might have been better to have never pushed (home ownership) so hard. But once we did, this was almost inevitable." (313) 222-2175

Candice Williams contributed

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