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By Kim Murphy
Murphy and Murphy Southern California Realty 

Real Estate Round-Up: The fabric of our community


Last updated 11/1/2019 at 1:54am

Last week I reported on five legislative bills that have been signed by the Gov. Gavin Newsom that will potentially have a huge impact on housing in California, specifically, Assembly Bill 68, Assembly Bill 881 and Senate Bill 13 which all provide incentives and reduce restrictions for accessory dwelling units.

On the face of it, considering the shortage of housing, they seem an appropriate next step to get additional units for people who need homes. But, and the big but, is they all provide rental housing.

Don't get me wrong, we need housing. But what we need desperately is single family homes so more residents can obtain the dream of homeownership. California's homeownership rate is 55.2% which is 9.6% lower than the national homeownership rate of 64.8%. California reached a peak homeownership rate in 2006 with 60.7%. Why does this matter?

There are some statistically relevant benefits to homeownership for a community, a state and the nation. The housing sector directly accounts for 15-18% of the U.S. gross domestic product. The total value of the U.S. housing market is $33.3 trillion. After subtracting mortgage liabilities, net real estate household equity totaled $25.9 trillion.

In addition to tangible financial benefits, homeownership brings substantial social benefits for families, communities and the country. Because of these societal benefits, policy makers have promoted homeownership through several channels.

Homeownership has been an essential element of the American Dream for decades and continues to be so even today. Which is why the recent legislation promoting increasing rental units is a concern to me.

According to a National Association of Realtors survey conducted fourth quarter of 2016, 86% of current renters want to own a home in the future and for younger renters, age 34 and younger, this share was 96%. The desire for homeownership remains strong.

The new legislation indirectly hurts minorities the most. Fewer than half of African American and Hispanic households' own homes. If California Legislators had addressed and created legislation to promote the development of single-family homes with the same vigor that they are promoting rental units, all demographic groups would benefit.

Homeownership and stable housing go hand in hand. Homeowners move far less frequently than renters and hence become embedded in the same neighborhood and community for a longer period. Residential stability strengthens social ties with neighbors. These social connections are paths through which resources for social control are made.

Homeownership makes a significant impact on educational achievement. Homeownership requires one of the largest financial commitments most households will undertake. Homeowners tend to pass that commitment along to their children. The awareness of the responsibility for the care of the home also seems to pass on to the children.

The additional stability that comes with children being able to remain in the same school district adds support to the fact that children of homeowners tend to have more positive educational outcomes. The data are so strong that some experts believe that residential stability should be considered part of any strategy to improve education.

Homeownership provides a way for homeowners to reap financial gain due to the appreciation of their home, so they tend to spend more time and money maintaining their home, which contributes to the quality of the surrounding neighborhood and community.

Homeowners tend to be more involved in their communities because they understand the correlation to the health and vibrancy of a community and the value it adds to their home. A study was done that measured participation in elections and found that 77% of homeowners vote in local elections compared with 52% of renters.

Studies also report that homeowners tend to have a greater membership in voluntary organizations and church attendance. It might be derived from the importance of social networks and the value it adds to the social capital of homeowners. Through these social connections, homeowners can more readily access the connections that are helpful in promoting their personal and business interests.

Homeownership has an impact on both physical and psychological health. Since homes of owners are generally in better condition, the additional benefit of wealth building of homeownership and the sense of control a homeowner has on their life, has a positive effect on the physical and mental health of homeowners and their children.

Crime also reports to be lower in neighborhoods with the greatest percentage of homeowners. Homeowners are more aware of the people who live nearby and are therefore more apt to implement voluntary crime prevention programs which deter crime.

Owning a home is different from renting. With a home purchase comes the pride of ownership and a sense of belonging in a community where one has a financial stake in the neighborhood. Perhaps homeowners are "happier" just from having achieved the American Dream.

Also, ownership entails greater financial and ongoing maintenance responsibility, which is long-term and may positively alter the human psyche and behavior.

Given all these benefits, I believe state legislators would have been wise to consider laws that promote the development of single-family homes for homeownership rather than promoting opportunities that increase rental housing.

As I said last week, I believe the passage of these bills, was the easiest path for legislators to take. Rather than do the hard work of finding solutions to the burdensome permitting process or the cost associated with building homes, the legislators opened the floodgates to individuals having free reign to change the very fabric of our communities.

Time will tell if the incentive to build ADUs and junior ADUs for rental housing will ultimately negatively impact our communities. This moment is one time I hope my concerns are wrong.

Kim Murphy can be reached at or (760) 415-9292 or at 130 N. Main Ave., in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.


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