Why Philly’s Millennials Aren’t Buying Houses
I love Philly, but I’m not going to buy a house here — at least, not anytime soon.
Neither, it seems, are thousands of millennials who call the city home, according to Sunday’s Inquirer. The reasons shouldn’t be surprising: They’re broke and skittish. But we ought to consider why it is they’re broke and skittish, and what it means for the future of the city that the next generation is hesitating to put down stakes here.
My wife and I haven’t bought — and won’t — mostly for the “skittish” part of the equation: We’ve already lived through a housing bust that almost destroyed the entire economy back in 2007. Just a few months before the crisis manifested itself, the pressure was on young couples like us to buy a house as soon as possible because, hey, the prices were always going up, there were always buyers, and you could turn a profit on your investment in fairly short order.
Until, of course, all those assumptions turned out to be untrue, resulting in bank collapses and a devastating wave of foreclosures.
We didn’t decline to buy then for those macroeconomic reasons, though. We were simply keeping our options open. And one thing that became clear as the subprime mortgage crisis manifested itself was this: A home was an anchor — something that rooted you to a community long past that community’s ability to offer you a sustaining job. Rents are relatively easy to walk away from. Mortgages worth hundreds of thousands of dollars? Not so much. If you want flexibility to go where the work is, you don’t buy a house. We didn’t buy in 2007, and the result was that we were able to chase jobs all the way to Philadelphia from Kansas. It’s going to be hard for us to unlearn that lesson.
For millennials just a few years younger than us, the housing bust and resulting Great Recession is pretty much the defining economic event of their adult lives. Any wonder they’d be hesitant to put down roots?
Their hesitancy is further justified by the way work itself is evolving: We’re becoming a “freelance economy.” Basically, employers are shedding full-time employees and replacing them with contractors who don’t get the same benefits or job security. One study says there are 53 million freelancers in the American workforce right now — about a third of all workers — and that number is expect to rise to between 40 and 50 percent of the workforce by 2020.
Now, I won’t diss freelance work. It’s helped sustain my family at times. And I know some freelancers who are also homeowners.
But honestly, the point of freelancing jobs — from the employer’s point of view — is that such jobs are cheap, relatively easy to cut when they’re not needed, and in many cases only available for short time, anyway.
Why should millennials make the huge economic commitment of home ownership if the economy won’t make a commitment to them?
Why all this could be a problem: Studies show that homeowners tend to be better citizens.
That’s not to say that renters are bad citizens, necessarily. But homeowners are more likely to know the names of their congressman and the school board president; they’re more likely to vote in local elections and more likely to work on solving local problems — heck, they’re even more likely to join the local Kiwanis Club. There are exceptions to this rule of course, but on the whole: Middle-class homeowners tend to do an awful lot of the work that goes into building, maintaining and fixing a community.
Owning a home isn’t just an anchor in the negative sense, then. It can root you to a place strongly enough to want to make it better.
Philadelphia’s homeownership rate already lags the national average by about 10 percent. So maybe another generation of city dwellers keeping their options open, always ready to escape, won’t make that big a difference. And certainly, Philadelphia isn’t the only city that will be affected by the rise of the freelance economy.
But it also seems likely that young workers will always have unstable working lives, and that in turn will make the cities they live in feel less stable. Philadelphia is staking its revival on the rise of millennials; maybe we need to figure out how to better commit to them, so they can commit to us.
Follow @JoelMMathis on Twitter.