Khamis: Homeownership is equity

By Johnny Khamis

My family immigrated to the United States in 1976 seeking the American Dream. Like many families before and after us, a major component of that dream was to become a homeowner. My parents worked hard and slowly built up their savings—my Mom worked as the Avon Lady and as a hairstylist at Regis and my Dad worked as the Culligan man. Finally in 1982 they put a down payment on a fixer-upper in Blossom Valley. This was their American Dream realized. 

Homeownership is still widely considered the dream for many people today. It builds equity both literally and figuratively. According to the Federal Reserve, homeowners have an average net worth that is 40 times greater than renters. They build equity in their homes and can take advantage of tax incentives such as deducting mortgage interest and property taxes, all of which help build financial security. 

Owners are also usually able to secure a fixed monthly mortgage payment. They don’t have to worry about the uncertainty of rising rents outpacing their earnings. For many families, paying their mortgage is like forced savings. Each payment and every home improvement goes towards increasing equity in their home. Additionally, home owners tend to put down roots in the community and take pride in it. Their children thrive in a more stable housing situation.

It has always been difficult to afford a house in the Bay Area and the dream of owning is getting harder and harder to achieve. This is especially true for our hard-working teachers, nurses, and service industry workers. The current median price in Santa Clara County for a Single Family Residence is $1.49 million and a Condo/Townhouse is $850,000. 

There are many reasons for the sharp rise in the cost of housing, including the cost of labor, materials, and the often-abused state consumer protection and environmental laws. The most important factor, however, is that we are simply not producing enough housing supply. Further exacerbating the problem is the fact that what is being produced is often rental units. 

To that end, we must look for ways to make homeownership more attainable. Thankfully there is legislation being proposed at the state level that could help increase the supply of for-sale housing units. In addition to supporting this proposed legislation, we must also change current laws that make it more expensive to build for-sale units. Onerous consumer protection laws have inadvertently caused insurance rates for builders to go up astronomically. These same laws, while well intended, have made the financing of for-sale units production increasingly more difficult. 

We also need more naturally affordable ownership opportunities in suburban neighborhoods for families that don’t want to live in a downtown core. While mid-rise and high-rise for-sale developments are definitely needed, they are not the only type of naturally affordable ownership housing that can be built. Townhome communities can look and feel similar to a single-family home community and they are much cheaper. Low-rise to mid-rise condos also create opportunities for families to own properties in more suburban neighborhoods. Finally, lot splits can create a pathway for smaller, more affordable single-family homes. These additional ownership opportunities also take far less time than a high-rise development.

Taking these steps will help increase the housing supply and make the dream of homeowners more attainable for many. The Santa Clara County Association of Realtors (SCCAOR) is always looking for avenues to help bring the American Dream of ownership to Bay Area residents. These are just a few of the ideas that SCCAOR will champion in the coming year. If you are interested in learning more or would like to stay up-to-date on upcoming housing legislation, please visit