Cityscape: Volume 15 Number 2 | Article 17

The goal of Cityscape is to bring high-quality original research on housing and community development issues to scholars, government officials, and practitioners. Cityscape is open to all relevant disciplines, including architecture, consumer research, demography, economics, engineering, ethnography, finance, geography, law, planning, political science, public policy, regional science, sociology, statistics, and urban studies.

Cityscape is published three times a year by the Office of Policy Development and Research (PD&R) of the U.S. Department of Housing and Urban Development.

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Mixed Messages on Mixed Incomes

Volume 15 Number 2

Mark D. Shroder

Michelle P. Matuga

Do Kids of Homeowners Do Better Than Kids of Renters?

Richard K. Green
University of Southern California

Point of Contention: Homeownership and Child Well-Being
For this issue’s Point of Contention, we asked four housing economists with substantial knowledge of the topic to argue for or against the following proposition—“The research to date is consistent with a significant causal effect of homeownership on child well-being and the educational attainment of young people.” Please contact alastair.w.mcfarlane@ hud.gov to suggest other thought-provoking areas of controversy.

At first blush, there is no reason to think that choice of housing tenure should affect child outcomes. Economists think of tenure choice as a financial decision, grounded in the relative costs of owning or renting a house. But a problem exists with the economist's view of the tenure choice problem—for most people, in most time periods, after taking into account the transaction costs and maintenance costs of being a homeowner, owning produces an inferior economic outcome to renting. Yet, even in the aftermath of a period when owner-occupied housing has performed intensely badly, Americans seem to want to be homeowners. The question is, why?