Two interesting new studies have been released over the last 60 days. On their face they seem unrelated, but there may be a real need to connect the dots, perhaps even connect a dot back to the Demos report on appraisal fraud that we have been discussing over the last week or so.

The Housing Landscape for America's Working Families 2005 released last week was conducted by The Center of Housing Policy, the research affiliate of the National Housing Conference (NHC) and funded by Freddie Mac. The report found a striking increase in the number of this country's working families that are facing "critical housing needs." The study defined this condition as the necessity of paying more than half of a family's income for housing and/or living in physically dilapidated conditions.

According to the report, in 1997 2.4 million working families spent more than half their income on housing but by 2003 that number had increased to 4.2 million. Working families are defined as low-to-moderate-income families working a full-time or equivalent job and earning from the annual minimum wage of $10,700 up to 120 percent of the median income in their area. More than one of every eight working families had critical housing needs. Those that were not paying excessive portions of their incomes were living in physically dilapidated conditions.

In 1997 those families with critical housing needs were roughly split between owners and renters. However, the more recent study found that homeowners represented the majority of those in distress by a margin of 55 to 45 percent. Homeowners were more likely to be paying over 50 percent of their income for housing but less likely by half to be living in dilapidated conditions.

42 percent of all working families with critical housing needs lived in the suburbs in 2003 compared to 39 percent in central urban areas. This puts a small ding in the Conventional Wisdom about urban housing. The owner/renter dichotomy continues to skew the numbers above: more than half of home owners with critical housing needs live in the suburbs while most renters reside in central cities.

The study also found that immigrant working families are 75 percent more likely than native-born Americans to pay more than half of their income for housing. A total of 15 percent of immigrant families are in this category compared to 8 percent of the native-born. These figures do not just apply to the recently arrived; 50 percent of those in the survey have resided in the U.S. since before 1990. In fact, more recent immigrants appear to fare better; 25 percent of those that arrived between 1990 and 1996 and 23 percent of families that arrived after 1996 were classified as having critical housing needs.

This Freddie Mac study, upon reflection, does have a lot in common with a study released in mid-March by the National Multi Housing Council (NMHC) and the National Apartment Association (NAA) in that both seem to indicate the dangers of home ownership for those who are not financially positioned to own a home.

Let us first of all acknowledge that the sponsors of the latter study have an agenda. Nothing wrong with agendas, as long as they are understood and cam be used as a filter. In this case, NMHC defines itself as a "national association representing the interests of the nations larger and most prominent apartment firms. NMHC advocates on behalf of rental housing, conducts apartment related research, encourages the exchange of strategic business information, and promotes the desirability of apartment living." NAA defines its mission in slightly different words, but the above will do.

Their report "Pushing Back on Homeownership: Recent Studies Question the Wisdom of Aggressive Homeownership Incentives" makes the following points:

• There is mounting evidence that homeownership, as a national goal, is being pushed beyond what is good for working families and the communities in which they live;



• There is such a thing as too much homeownership;



• Homeownership is not for everyone and "universal homeownership won't make our nation stronger." The nation needs a more balanced housing policy "that includes incentives for, and values the role of apartments in our housing system."

The NMHC/NAA report goes on to incorporate 11 reports that support its three statements above. These come from widely and wildly divergent sources including the Joint Center for Housing Studies (Harvard), the Children's Defense Fund, the Fannie Mae Foundation and the U.S. Department of Housing and Urban Development. We will, over the next weeks, review and report on some of these reports.

But, to connect the dots.

Maybe the Freddie Mac report and the NMHC/NAA study are both reporting on the same phenomena. If so, have we, as a nation, become fixated on homeownership as a magic bullet solution to many urban, economic, and sociological problems? Have we, as a consequence, neglected other programs that would improve the availability and condition of the rental housing stock? What about programs to empower, prepare, and support homebuyers as they embark on that most important home purchase?

And to connect the Demos appraisal dot, it was surprising to see similar references pop up in two of the three reports we have recently reviewed. One reference was to an incredible foreclosure situation in the Pocono Mountain region in Pennsylvania. The Demos report uses the situation to illustrate the economic devestatation that appraisal fraud can unleash; the NMHC/NAA study talks about it in terms of the vulnerability of (low-income) buyers to fraud and excessive debt.

Of course, this also opens up the entire subject of foreclosures: how they happen, how often they happen, the process, the impact, and what help may be available to those confronting the situation.

It should be an interesting year.