The 2016 presidential campaign sparked a long overdue national conversation about rising levels of income inequality in our country.
At the heart of this conversation is the testing of a proposition first conveyed to most of us as children – that America is a special place where everyone has the chance to move up the economic ladder by virtue of hard work and talent regardless of our initial station in life. What matters most, we were told, is not where you come from but where you are going.
Of course, our country often falls short of this ideal, most notably with its shameful legacy of slavery and racial segregation.
Yet, throughout its history, America persevered despite these flaws. We engaged in a continuing exercise of self-improvement in which people of goodwill come together to correct injustices and build a fairer society. While not perfect, the New Deal of the 1930s and the Great Society programs of the 1960s were aimed at widening the doors of opportunity for all Americans regardless of background.
Today, it seems we have reached another point in our history when some introspection and self-improvement are in order.
Many African-Americans living in our inner cities are deeply alienated from the broader society, a fact made obvious by the riots in Ferguson, Baltimore, and New York City over the past year. After more than a decade of wage and income stagnation, tens of millions of families from all racial and ethnic groups live paycheck-to-paycheck, unable to think beyond the next week, never mind dream about a better future for themselves and their children. Many young college graduates, hoping that a college degree would be a ticket to opportunity, now find themselves buried under a mountain of student loan debt.
While those at the top of the economic pyramid continue to prosper, millions of Americans feel locked out of the opportunity for self-advancement.
A presidential campaign provides an ideal moment to take stock of these developments and ask fundamental questions about the kind of society we want America to be. Does the American Dream represent a realizable goal or is it just a mirage?
This conversation will not be complete, however, without an emphasis on the critical role that safe and affordable housing can play in supporting upward economic mobility. For generations of Americans, a safe and affordable home has been the foundation for economic success. For many, owning a home has been the key to their financial security and that of their children and grandchildren.
Through new research, such as this, by Harvard scholars Raj Chetty, Nathaniel Hendren and Lawrence Katz, we are also learning that where you live is critical to your future prospects. Assessing HUD’s Moving to Opportunity experiment, they found that children in public housing projects who relocated at an early age to neighborhoods with lower concentrations of poverty had significantly improved college attendance rates and earnings and were less likely to become single parents. These findings have profound implications for housing and social policy.
Today, unfortunately, rather than serving as a bedrock of stability, housing has become a source of instability for far too many families.
With rents rising across the country, a record number of households, 20.8 million in all, pay more than 30% of their monthly income on rent; more than 11 million pay in excess of 50%. A major factor contributing to these housing-cost burdens is the acute shortage of affordable rental homes.
At the same time, the national homeownership rate remains at a 48-year low. The homeownership rates for younger households, a traditional source of first-time homebuyers, also plummeted to levels not seen since the 1960s. Rising rents make it even more difficult to save for a mortgage down payment. Tighter underwriting and regulatory requirements act as barriers for thousands of families capable of sustaining homeownership.
Over the next decade, powerful demographic trends – the formation of new households by cash-strapped Millennials and a significant growth in the number of lower-income minority families – are likely to exacerbate the problems of rental affordability and homeownership access. Fashioning solutions to these problems must become a national priority.
By speaking directly to the real-life concerns of countless Americans, a focus on housing can also pay political dividends. According to a recent survey commissioned by the MacArthur Foundation, 61% of those polled believe we are either "still in the middle of the housing crisis" or the "worst is yet to come." 80% indicated that housing affordability is a problem, while 79% said it is more likely for "middle-class people to fall into the lower economic class" than for "people in lower economic classes to rise into the middle class." Housing instability is a key contributor to this sense of pessimism about the future.
America would be well served by a presidential campaign that brought these issues of economic opportunity and mobility to the forefront. This conversation should begin with housing, a topic that strikes home for many voters.
