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Buying a house is incredibly difficult for me. Here's why.

As a young person in DC paying what feels like a ridiculous amount in rent, I wonder about buying my own place. With these crazy prices, wouldn't it be worth just making the jump to ownership?

Well... no. When it comes down to it, buying a home of any size in DC is just not possible for me. And I'm not alone.

Photo by Chris Devers on Flickr.

I shared my struggle with our contributors, and many submitted their own opinions on and experiences with the matter. There are so many barriers to home ownership in this area. Fundamentally, the finances of buying have changed, as have the financial realities for many would-be home buyers like myself.

Down payments are a pay wall

One reason I've been scared to even consider owning is because of the down payment required on homes as expensive as the ones in this region; it's magnitudes greater than the security deposit I typically have to put down as a renter. My fear isn't unique.

Arlen, a commenter on our site, said:

I'm a renter with a solid income who would love to own a home. The down payment is what stops me. It's going to take a long, long time to save up 20% of the price of a $500,000+ home. It's especially hard to do when paying rent on a place large enough for a family with kids and then paying for child care for those kids.
Of course, I could take out a loan for that up front cash, and interests rates are low right now. But in our region in particular, taking out this loan is more complicated and more risky. Gray Kimbrough said:
A lot of DC-area housing necessitates a jumbo loan (for mortgage value over $417,000), raising the down payment requirement from 10 percent to 20 percent. Down payments have to be much larger because the cost of housing is up so much. In my downtown Silver Spring neighborhood, houses were going for $200,000-$300,000 not long ago, so buyers needed down payments of $20,000-$30,000. Now those same houses are $500,000 or $600,000, needing a down payment over $100,000 for a conventional mortgage.

Image by 401(K) 2012 on Flickr.

These jumbo loans also have more stringent requirements for approval, and restrictions on how much interest I can deduct from my taxes. There are loans backed by the federal government that can help in particular with the down payment problem (Federal Housing Authority, or FHA, loans).

But as Gray pointed out, "FHA fees have been increased dramatically, making this a much less attractive option."

More debt? You've got to be kidding me

For me, taking out a loan to pay such a big down payment makes for a frightening amount of debt. Sure I could try to save up, but savings don't build quickly when I'm paying these high rents.

What is more, myself and many others are already suffocating from student loan debt. In fact, we are suffering from some of the highest amounts of student debt in history.

I personally am not interested in adding to that mountain of bills. Neither is Aimee Custis:

I've been watching many of my friends buy condos or houses, but others among us (myself included, even with a decently-salaried nonprofit job and a successful side gig) simply can't even fathom that jump. The number one thing that sets me back is my student loans.
Dan Reed added his take:
You can definitely see the ripple effects of the student loan burden in the housing market today. Condos that might otherwise attract first-time buyers are already harder to finance today after the Great Recession. But lenders and builders know they'll still have a smaller pool of buyers anyway, hence the glut of new rental apartments that are being built.
Beyond all that, it's been harder to buy a house since 2008's financial crisis

Before 2008, it was arguably much too easy to buy a home, and many people were exploited and took on bad loans.

Things have changed. It's probably good that people looking to buy homes face more scrutiny, but that also limits some groups of prospective buyers.

"Credit requirements have definitely gone way up since the early-2000s boom," said Gray. "This is particularly bad for people with limited credit history or who are self-employed."

"I've been self employed almost my entire career," said Julie Lawson, "and getting a mortgage is incredibly difficult due to variable income and verification requirements."

Charlie, a commenter, agreed: "We've tightened lending requirements. Good luck trying to get a mortgage if you are self-employed... Easy to get a car loan or credit card though."

In many ways, our financial system has simply shifted. It still favors home ownership in many ways (some less equitable than others), but does not encourage it like in the past.

As kob, another commenter, points out:

Banks no longer want home ownership. There's more money to be made in rental investing. Apartment complexes, and single family homes, are being bought up by investment groups for rental. By raising lending and credit requirements to unreasonable levels, people seeking to buy are punished.
So where does this leave me?

For now, I'll remain a renter. And honestly, I don't feel like I have too much of a choice.

What has impacted your decisions about renting or buying?


As Silver Spring urbanizes, neighbors disagree on who "belongs" there

Some members of a Silver Spring civic association recently tried to keep their new neighbors from joining. While residents rejected the measure, the fact that the issue got consideration at all illustrates how people disagree on who "belongs" in urbanizing communities.

The new townhouses rise behind single-family homes in Seven Oaks-Evanswood. All photos by the author.

The Seven Oaks-Evanswood Civic Association (SOECA) sits in the shadow of downtown Silver Spring, just a few blocks from the Metro station. Nearly all of its 220 households live in single-family homes, though the association recently lost a years-long battle to stop Chelsea Heights, a development of 63 townhomes on the site of a former private school on Ellsworth Drive.

Last week, the SOECA board proposed an amendment to the civic association's bylaws that would limit membership to "residents of the R-60 zoned areas," or people living in single-family homes. The amendment would effectively bar the new townhouse residents from joining. The association already keeps out people living in a handful of small apartment buildings within the neighborhood's borders, which are drawn to exclude nearby high-rise apartment buildings.

The proposal unleashed a fiery conversation in the normally sleepy neighborhood, both online and at a community meeting last night that 50 people attended. But after a vote, neighbors voted 32-17 against the change.

Neighbors worried townhouse residents would "out-vote" them

Why propose barring the future residents of Chelsea Heights from the neighborhood association? On the community listserv, some residents worried that the Chelsea Heights residents could join the civic association and "out-vote" existing residents on neighborhood issues, such as whether to restrict cut-through traffic.

"Will their interests as members of a higher-density tract development coincide with, complement or be in conflict with those of a neighborhood association composed of residents in single-family homes?" asked one resident.

A new street in the Chelsea Heights development.

SOECA president Jean Cavanaugh noted that Chelsea Heights will have its own homeowners' association, and says that her organization would be willing to cooperate with it. "There are other civic associations that work side-by-side with large townhouse developments that have their own association," she told me.

She added that this had nothing to do with the fight to stop the development. "We have no issue with the people buying property in Chelsea Heights. Our issue's with the Planning Board, the county, and [Chelsea Heights developer] EYA," she told me. "We can distinguish between who we had our battle with and the innocents who are gonna move in to Chelsea Heights."

Other area neighborhoods welcome all comers

It's not unusual for neighborhood groups anywhere to fight development. But in Silver Spring, a community that's generally progressive and tolerant and where many neighborhoods have a mix of housing types, it's unusual for associations to deliberately exclude people based on what kind of home they live in.

Homes in SOECA are literally next to the high-rises and businesses of downtown Silver Spring.

Next door to SOECA, the Woodside Park Civic Association has a long history of opposing townhouses from being built there, but remains totally open to anyone who wants to join. And the East Silver Spring Civic Association is open not only to townhouse dwellers, but apartment and condominium residents as well.

"The fact that I live in an apartment does not mean I am any less impacted by a nearby development or the loss of a local park, than say a homeowner would be," says ESSCA president Megan Moriarty. "Furthermore, I think we can come up with better solutions if all voices are considered in the debate."

Liz Brent, a real estate agent and Seven Oaks-Evanswood resident for 20 years, says that the disagreement reflects a disconnect between how long-time residents and newer residents see the neighborhood.

"There are people who come [to Silver Spring] for the transportation, come here for the walkability, come here for the diversity," she says. "I'm not saying the people who came here 20 years ago, 30 years ago, 50 years ago don't want the diversity. But people who are coming here now...that's critical. It's a sea change for people who have been here for 30 and 40 and 50 years."

Keeping people out weakens community

Civic associations have a lot of sway in Montgomery County politics, largely because they're so organized. They provide a voice to thousands of residents, and they have done a lot of good in the county, from organizing community events to fighting highway extensions that would have cut across Silver Spring and Takoma Park.

But civic groups also disenfranchise many people, whether by restricting membership to certain residents or by becoming adversarial towards people who disagree. That's one reason why participation in civic associations across Montgomery County is in decline.

Just 20% of eligible households in Seven Oaks-Evanswood are members of SOECA. I've spoken to SOECA residents who supported Chelsea Heights and say they stopped participating because of the group's eagerness to vilify anyone who supported the development. "I couldn't think of a decision that had been made that I agree with," Brent said as to why she left.

While neighbors who fight new development say they're doing it to "preserve" or "strengthen" their neighborhood, they ultimately weaken community organizations when they push out people who might otherwise want to get involved too. Change is a fact of life, but so is difference and disagreement. Community organizations do themselves a disservice by trying to squelch both.

Besides, I bet that people buying houses in Chelsea Heights, or the renters who are already excluded from participating in SOECA, probably moved there because they like and enjoy the neighborhood. I bet they have a lot more in common with their single-family dwelling neighbors than some would like to admit. And now, we'll get to find out.

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