You may be surprised to learn that enlarged housing opportunities do not necessarily follow from the creation of more houses. Good jobs are important too. Indeed, good jobs and increasing household incomes underpin home ownership.
Massachusetts did pretty well increasing the rate of home ownership over the last three decades of the last century. That was when those much maligned easy-to-get mortgages and securitized mortgage instruments were in vogue. Nevertheless, the rate of home ownership in Massachusetts remains poor, compared with the rate in other states.
On the Vineyard – good news – the rate of home ownership, about 70 percent, is a little better than the national average but a whole lot better than the state’s. But, despite our best efforts, the Vineyard rate of home ownership, despite our affordable housing efforts, is on the decline.
What restrains the rate of growth of home ownership in Massachusetts, and most importantly, on Martha’s Vineyard? It hardly requires a beautiful mind to name the obvious villain. High prices, of course. Massachusetts ranks third in the nation, behind Hawaii and California, in terms of median house value, and Vineyard prices reach higher still, more than $200,000 above the statewide median. Despite this vicious recession, now in its third year, Vineyard property prices remain high, even as the volume of business slows.
Still, it’s worth considering the chief underlying factor, apart from fanciful prices, that controls the growth of affordable housing. That’s income.
When household incomes grow, so does home ownership, across the economic demographic. Even though median household income in Massachusetts is high compared with incomes in other states, it’s lower on the Vineyard, and household incomes in the state and here have been stagnant or declining since the late 1980s. Plus, the income gap between those with growing household revenue and those with the opposite experience has been exacerbated in Massachusetts. Because the price of houses rose so sharply in the 1980s and 1990s while household incomes failed to keep pace, housing has become more and more expensive and more and more difficult for modest income households to afford. And naturally, on the Vineyard the picture is bleaker.
The inescapable conclusion is that an increased supply of mid-range housing, along with good jobs with rising incomes, in an economy that is broadly encouraged to prosper will together do much to ease the housing crunch. Home ownership, especially for modest income families, is intimately and inescapably tied to the success of broad regional economic development strategies.
Here, we concentrate a great deal of earnest energy on the shortage of affordable shelter for neighbors, and our strategies for solving the problem are varied and inventive.
But, as the Island Affordable Housing Fund’s Island-wide Housing Needs Assessment pointed out, “the average job on Martha’s Vineyard pays only 73 percent of the state average.” Given the expense of housing here, whether to rent or to own, the housing solution has as much to do with economic growth on Martha’s Vineyard as it does with new rental apartments, new townhouses, new youth lots, and housing subsidies. And economic development is not something we fancy talking about.
“High home prices (85 percent above the statewide median), high rents (at least 30 percent over the statewide median) and low wages (27 percent below the statewide average) describe the Vineyard affordable housing problem,” writes John J. Ryan, author of the IAHF study.
The understandable focus on providing a variety of housing opportunities for Island families appears likely to yield only limited rewards, as we have discovered. The destructive effects of economic downturns on our housing efforts are predictable and devastating. Our worthwhile goal is a diverse and refreshed Island community of committed neighbors. But, putting good people who will become good, long-term neighbors into decent housing requires a companion focus – indeed a laser-like allied focus – on economic expansion, so that our new neighbors and old friends can make their own way toward independent home ownership and fully vested Vineyard citizenship.