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The Housing Scene

Pride of Ownership Has Hefty Price


WASHINGTON — America may be the best-housed country in the world, but that title doesn't come without a price.

Housing costs are our largest personal expenditure and have been for four decades, according to a new book from the Urban Land Institute.

"America's Real Estate" reports that Americans spend 26 cents of every dollar they earn on housing. That's more than we spend on medical care, food, transportation or clothing.

Put another way, 15% of our personal spending covers such direct housing costs as mortgage payments and property taxes, and 11% goes to utilities, furniture, repairs and other costs of household operation.

According to the most recent Census Bureau statistics, nearly two-thirds of all Americans own their homes. In other words, 67.6 million families are homeowners. That's certainly a laudable statistic, but it masks the fact that many families still live in substandard dwellings.

According to the Census Bureau, 1.4 million homes in the United States had no heating equipment in 1995. In addition, 3.2 million lacked kitchen facilities and 2.1 million did not have complete plumbing facilities or were without their exclusive use.

Also, homeownership is up, the American dream isn't what it used to be, at least not for some people.

The percentage of owner-occupied single-family detached housing has declined in recent years, the institute points out. The percentage of attached units--townhouses and condos--has increased, as has the number of manufactured houses.

On the flip side, more renters live in detached houses than in any other type of tenant-occupied dwelling.


In a recent speech, James Johnson of Fannie Mae called for "full-capacity" homeownership, saying the nation won't become saturated with owners until three of every four households hold titles to the roofs over their heads.

Can we reach a 75% ownership rate? Only time will tell. But we have a long way to go. About 16 million more families will have to become owners to achieve that goal.

To put that number into perspective, 5.8 million more families own homes today than when President Clinton announced his plan three years ago to raise the nation's ownership rate to 67.5%.

To move the rate from 66%, where it stands now, to 67.5%, 2.2 million more households will have to make the move to ownership status.


Just about anyone who has ever bought a home would like to shorten and simplify the process. How does 14 days sound?

That's the vision of Alex Perriello, the president and chief executive officer of the Coldwell Banker Real Estate Corp., a chain with more than 2,700 offices and about 60,000 agents.

Perriello's idea is to combine a pre-approved buyer with a pre-approved property so that the entire process, from beginning to end, will be completed without most (if not all) of the customary contingencies that slow everything down.

"The buyer will have a solid commitment for financing prior to making an offer," Perriello said.

"And the house would already have been appraised, inspected, repaired where needed, warranted, surveyed and with a preliminary title report, all prior to going on the market."

Of course, re-engineering a procedure that typically takes 45 to 60 days will be no small feat. Even Perriello says that "the mind-set of everyone involved in the transaction, including buyers and sellers," will have to be changed.

But Coldwell Banker aims to try. It has created a task force of major industry players--lenders, warranty firms, title companies, home inspectors and real estate agents and brokers--with a mandate to streamline the process.

This isn't just a publicity stunt, the Coldwell Banker official says. The session will be guided by a professional facilitator in the "workout" format that was pioneered by General Electric and is now used by many major companies to address improvement issues.

The task force plans to pick a test market where its recommendations can be put into practice by local Coldwell Banker affiliates early in 1998.

Distributed by United Features.

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