A permanent switch to telework could allow more than 15% of all San Diego renters — and 21.3% of Black San Diego renters — to purchase a starter home in a less expensive location, according to a report released Monday by Zillow.
The rapid rise in pandemic-driven telework could make first-time homeownership most broadly accessible to Black renters compared to other renters, based on factors including income, the makeup of local industries, geography and more, the analysis from the online real estate database company.
Seattle-based Zillow found of the nearly 2 million U.S. renters able to take advantage of telework options and who could afford monthly payments on homes in less-expensive areas outside of their current metropolitan areas, Black renters benefit far more than other renters.
In San Diego, a full 15.4% of renters could afford to buy a home elsewhere if they are allowed to telework — behind only San Jose, San Francisco and Los Angeles.
For Black renters, the 21.3% who would be able to purchase a home is second highest in the nation, behind just San Jose. Zillow looked at the top 50 metropolitan areas by population in the nation.
Latino, Asian and white households are 12.8%, 14.5% and 16.3% more likely to be able to afford homes elsewhere.
“Although it’s well-known that the pandemic has been disproportionately harmful to Black communities, the rapid shift to remote work could make homeownership more broadly accessible,” said Zillow economist Treh Manhertz.
“It’s a rare opportunity for those in a position to take advantage of remote work. Unfortunately, this shift will not be a major factor in closing the homeownership gap nationally. The larger-scale solution must be to create options for affordable homeownership locally. Moving away may be a newer option for some, but it shouldn’t be the only option available to achieve homeownership.”
In large metropolitan areas where typical starter home values are higher than they are nationally, Black renters are 29% more likely than other renters to be able to buy their first home in a less expensive area because of the opportunity to work from home permanently.
The Black and white homeownership gap remains as wide Monday as it was at the dawn of the 20th century. Nearly 75% of white households own their homes, compared to 44% of Black households.
According to Zillow, while remote work can open up opportunities to buy a home in more affordable locations, it doesn’t address the root of the various affordability issues for people of color.
This means, for some people, achieving homeownership in this way will be a tradeoff against living some place they would prefer. For others, though, it could mean the sudden ability to move to an area they would have preferred in the first place. This analysis shows that Black renters are most likely to face this tradeoff decision.
A starter home in the U.S. is around $132,000, which at recent low rates and a 20% down payment translates to estimated monthly payments of about $725, about 30% of income for a household earning $29,500 per year.
— City News Service