Home ownership used to define the American dream. Now that dream has turned into a national nightmare as a nation of homeowners become a displaced populace who must rent.
And renting is an option only for those who have the money for even that.
This was not what millions of Americans had in mind when they moved into their new home. With that dream shattered, many wonder what’s next.
A good question with few answers.
Kim and Robert Discianno had the American dream. Now, they rent a few streets away.
The Disciannos moved from Aurora, Ill., to their home here in Plano three years ago, lured to the outermost fringes of suburbs, known as the exurbs, by the promise of owning their first home. Today, their credit is shot and they no longer own, but Ms. Discianno still has a four-hour commute.
The Disciannos are among many exurban families losing their homes and their grip on the dream of home ownership. The exurbs were among the fastest growing counties during the boom — entire civilizations built around the idea of owning real estate. With home prices falling and unemployment rising, more people are renting — just as they had before the boom — and turning the community into a rental economy.
Many Plano residents in the newer homes are facing foreclosure as a result of rising property taxes based on the need for new governmental and community services.
Renting is one of the few ways for people to stay in the area and keep landlords afloat. It can be good for the overall economy because it promotes mobility. When the economy turns downward, renters are more willing than owners to move to a region where jobs are more plentiful.
But that same mobility can make for less stable communities and lower property values. Some observers believe the growth of rental property is the first in a series of steps that will transform today’s exurbs into tomorrow’s low-income housing. These communities have a low tax base made up mostly of property and sales taxes, both of which are in decline. Lawrence Summers, economic adviser to President Barack Obama, has often explained it this way: "No one in the history of the world ever washed a rented car."
What is happening on the urban fringe is similar to the urban decay that plagued cities after World War II, says Christopher B. Leinberger, a real-estate developer and visiting fellow at the Brookings Institution. "Single-family homes and townhouses in cities were broken into rental units. Now, we’re seeing that phenomenon move out to the fringe."