Association for Public Policy Analysis & Management

Rural areas, particularly related to housing issues, tend to be less understood and under-researched, making it more difficult to provide context or insight based on previous research and findings. The Great Recession and related foreclosure crisis led to changes in homeownership not previously seen before, although this experience could likely be described as part of the cyclical nature of housing markets. Research has sought to quantify and better understand the extent and causes of these changes, but are most often focused on urban areas or in a smaller geographic area. Policy responses across multiple government levels has been slow or inadequate in responding to these changes in housing.

From 2000 to 2010, homeownership in Pennsylvania remained higher than national statistics, but declined from 71.3 percent to 69.8 percent, an overall decline of just over 2 percentage points. This decline was not felt equally across the Commonwealth. Pennsylvania’s small cities and boroughs experienced a 4.5% decline in homeownership from 2000-2010. This paper focuses on these changes in homeownership in Pennsylvania’s rural small cities and boroughs. Four main questions were addressed:

1. What is the relationship between demographic and market characteristics, and homeownership rates?
2. What will homeownership rates look like in 2020?
3. What are the different types of rural cities and boroughs with respect to demographic and market characteristics, and homeownership rates?
4. How are homeownership rates and changes spatially distributed?

These questions were answered using t-tests, ANOVAs, multivariate regression models, projection models, and ArcGIS.

It is essential that researchers and government agencies continue to investigate and better understand these recent changes in homeownership, especially in the context of rural areas. Political efforts to stabilize or improve homeownership rates could focus on existing homeowners or on attracting first-time homeowners. Efforts could focus on assisting or preserving existing homeowners most likely to be negatively affected by changes in economic or housing conditions, such as the senior citizens and low-and-moderate income homeowners. Mortgage refinancing options may assist in maintaining housing affordability and reducing possible foreclosure risks. First time homeowners can be supported and encouraged through programs such as down payment assistance, Individual Development Accounts (IDAs), direct subsidies and low-cost loan options. Increased rental housing options may be useful in providing stability in housing markets and encourage households to transition to homeowners when financially able. At a local level, Community Land Trusts (CLTs) may be a helpful planning-related tool to finance homeownership and reduce the influence – and likely cyclical nature – of traditional sources of mortgages through prime and subprime lenders.