Kim Manturuk

FRIENDS AND NEIGHBORS: HOMEOWNERSHIP AND SOCIAL CAPITAL AMONG LOW‐ TO MODERATE‐INCOME FAMILIES

ABSTRACT: This research explores whether homeownership leads to increased individual social capital among low- to moderate-income families. Social capital refers to social resources a person can access through contacts with others in his or her social networks. We theorize that homeownership can motivate interactions with others in one’s neighborhood and therefore build social capital. Using a sample of low- and moderate-income homeowners and a matched sample of renters, we collect data on overall social resources and neighborhood-specific social resources. We find that homeowners have more total social capital resources and more neighborhood social capital resources than renters. Neighborhood group involvement has an indirect effect on social capital, but explains only a small amount of the influence of homeownership. These findings hold when controlling for household-level and neighborhood-level sociodemographic variables, as well as when using statistical models that account for endogeneity. Based on this evidence, we conclude that homeownership gives people access to social capital via increased social ties to others. We discuss the implications of this finding for housing policy and suggest new directions for research on social capital.

Sense of Community and Informal Social Control Among Lower Income Households: The Role of Homeownership and Collective Efficacy in Reducing Subjective Neighborhood Crime and Disorder

We examine the link between homeownership, collective efficacy, and subjective neighborhood crime and disorder. Although prior research suggests that homeownership provides social benefits, the housing downturn and foreclosure crisis, coupled with mounting evidence that people self-select into housing, raise questions about the role of homeownership. We adjust for respondents’ decision to own or rent using a nationwide sample of lower-income households. We account for demographic and neighborhood characteristics as well as ratings of individual efficacy. We present a structural equation model that identifies how sense of community and informal social control jointly contribute to collective efficacy. The latent collective efficacy construct mediates the impact of homeownership on resident’s perceptions of neighborhood disorder. Such perceptions matter because they have been linked to resident’s physical and mental health. Our findings demonstrate that when coupled with sustainable mortgages, homeownership exerts a robust yet indirect effect in reducing subjective neighborhood crime and disorder. Our model also links collective efficacy to neighborhood racial homogeneity, a finding which presents challenges for the study of diversity and community. We discuss sense of community research as well as sustainable mortgages and implications of the foreclosure crisis for the future of homeownership opportunities among lower income households and neighborhoods.

Homeownership and Local Voting in Disadvantaged Urban Neighborhoods

Homeownership has long been considered the cornerstone of the American dream, and considerable research has pointed to the social benefits of homeownership for both families and communities. Yet research concerning this link between homeownership and social participation has recently undergone critique for failing to consider neighborhood context. Do homeowners in disadvantaged urban neighborhoods become active participants in neighborhood improvement, or do they feel stuck in undesirable neighborhoods where they perceive little potential for change? The research addresses endogeneity concerns and shows that, when compared to renters, homeowners are more likely to have voted in recent local elections. Neighborhood context does moderate these relationships, with homeowners in disadvantaged neighborhoods being more likely to vote than owners in other areas. These findings suggest that, despite potential household-level costs associated with owning a home in a disadvantaged urban area, responsible homeownership in such areas promotes local political involvement among lower-income residents.

Homeownership and Civic Engagement in Low-Income Urban Neighborhoods: A Longitudinal Analysis

This paper tests whether there is a causal relationship between homeownership and two forms of civic engagement. We explore three theoretical linkages between homeownership and civic engagement: financial self-interest, the dwelling as a bundle of interests, and residential mobility. Using a sample of lower-income homeowners and a matched sample of renters, we analyze data on neighborhood group membership, social activity, homeownership status, and mobility over a 4-year period. Findings indicate that renters who became homeowners during the study period were no more involved in neighborhood organizations prior to homeownership than renters who did not become homeowners. However, involvement increased significantly after these renters became homeowners. We discuss the implications of this finding for policies aimed at promoting homeownership in lower-wealth urban neighborhoods.

The Effect of Marital Status on Home Ownership among Low-Income Households

This research examines whether married low-income renters are more likely to become home owners than comparable single, low-income renters. To do so, it employs data from the Community Advantage Panel Study and discrete-time survival analysis with propensity-score matching. Results suggest that married couples buy homes at higher rates, and buy them more quickly, than do their unmarried counterparts. Estimates in models that use propensity-score matching are robust to the control of selection bias between the married and the unmarried groups. The findings suggest that efforts to encourage marriage among low-income couples may be associated with subsequent economic mobility through home ownership.

Urban homeownership and mental health: mediating effect of perceived sense of control

What are the mechanisms responsible for homeowners’ better mental health? Social disorganization theory suggests that the relationship between homeownership and mental health is mediated by perceived sense of control, trust in neighbors, and residential stability. This hypothesis is tested using data collected from respondents in 30 low–wealth urban areas. Using propensity score matching and regression models, I find that low–income homeowners report a greater sense of control and trust in their neighbors than comparable renters. Homeownership likewise has an impact on mental health, but the effect is entirely mediated by perceived sense of control. Part of that mediating effect is related to avoiding serious delinquency in mortgage payments. However, subjective trust and residential mobility did not mediate the relationship between homeownership and mental health. The study findings are discussed in light of the need for a cohesive theory of homeownership, particularly given changing economic realities.

Coping with Adversity: Personal Bankruptcy Decisions of Lower-Income Homeowners Before and After Bankruptcy Reform

We examine the personal bankruptcy decisions of lower-income homeowners before and after the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Econometric studies suggest that personal bankruptcy is explained by financial gain rather than adverse events, but data constraints have hindered tests of the adverse events hypothesis. Using household level panel data and controlling for the financial benefit of filing, we find that stressors related to cash flow, unexpected expenses, unemployment, health insurance coverage, medical bills, and mortgage delinquencies predict bankruptcy filings a year later. At the federal level, the 2005 Bankruptcy Reform explains a decrease in filings over time in counties that experienced lower filing rates.

Building Emergency Savings through “Impulse Saving”

Into all good saving plans a little impulse spending often falls. A meal out and some new shoes, and the intended savings are gone. But what if impulsivity could be leveraged to help people save money, rather than spend it? This is the idea behind MAGIC Mojo, a recently piloted product that allows people to transfer money to savings instantly via text message. The MAGIC Mojo approach aims to help underbanked consumers build emergency savings and reach their financial goals. The approach is highly scalable, has the potential to reach a broad base of consumers, and incorporates ideas from behavioral economics to increase the likelihood that people save successfully.