Thomas Jefferson had a problem with the word property. When he sat down in Philadelphia to write the Declaration of Independence he drew heavily on the work of British philosopher John Locke. He wanted to feature Locke’s inalienable rights of life, liberty, and property in the opening of the declaration. Other members of the drafting committee thought any reference to property by a man who actually saw human beings as property was ill-advised. So they crossed out property in the original draft of the declaration and added the pursuit of happiness.

Still, throughout the history of American democracy, property, namely a home of one’s own, has been inextricably linked to the pursuit of happiness. And perhaps the greatest threat to American democracy today is the idea that unless you already own a home or have family money you cannot buy a home. Homeownership builds neighborhoods, and a city of neighborhoods like Philadelphia can only thrive with broad homeownership.

69 percent of Pennsylvanians and 52 percent of Philadelphians own their own homes, both figures above the big city average, and Philadelphia is one of the most affordable large cities in America. In fact, house prices in Philadelphia have increased just 1.9 percent in the last year to a median sale price of $270,000. Oddly, to afford a house this year requires that you make sixteen percent more than you did last year. Many in Philadelphia feel priced-out of the market. What gives?

Blamed most often – interest rates and cash buyers.

Interest rates are a no-brainer. Just a couple years ago you could get a 30-year fixed rate mortgage at three percent. A $240,000 mortgage would cost $1,012 a month. Today, with interest rates near seven percent, that same mortgage costs $1,597 a month. Few people have an extra $585 per month laying around to afford to buy a house.

So what can a buyer do? Many have paid cash. In Philadelphia 35 percent of all home sales are cash deals. But who has this kind of money? Recent reporting has stoked fears that big private equity firms are buying as much as 44 percent of all single-family homes for sale, making homes unaffordable, and turning us all into renters. In fact, Wall Street buys a small fraction of single-family homes. The vast majority of cash deals are people with paid off homes selling and rolling some of their money into a new home, and investors who own fewer than ten properties becoming landlords. Most of these owners are active participants in local communities.

Then there is the idea of what passes for a starter home. A foundation of pricing is the average cost per square foot, which in Philadelphia currently stands at $206. Obviously, a house with more square footage costs more than a smaller home. This has greatly impacted the market and housing affordability. New homes are 44 percent larger than they were 40 years ago, and in 1984 starter homes were tricked out in formica, linoleum, and one bathroom. There were six of us at home when I was a kid, and I remember squirming in the hall waiting for my assigned bathroom time each morning. And we were solidly middle class! Today no homebuilder would dare build such a home. Of course, these larger, more well-appointed homes cost more.

As for the claim that young people cannot, and may never be able to, buy a house, it’s just not true. Still, the fallacy is played constantly in public discourse and seems to dispel the whole dream of homeownership for an entire generation. In fact, In 2023 the homeownership rate of 24-year-old Gen Zers was 27.8 percent. At age 24, 24.5 percent of millennials and 23.5 percent of Gen Xers owned their homes. More young people today own their homes than did young people in previous generations.

The class warfare narrative many put forth as the reason for housing unaffordability does not stand up to the facts. Nor does the growing sentiment that the average Philadelphian can no longer afford the average house in Philadelphia. Still, many who want to buy homes in Philadelphia cannot, and they are not making this up. So what drives this gap? The same thing that drives most inequality in the United States: Income disparity.

Indexed for inflation, since 1963 home values have gone up 104 percent while incomes have only risen 45 percent. As the income gap between the richest and the poorest widens, basic economic participation becomes more difficult for more people. As incomes do not keep pace with housing prices the result, for many, is the concept of cost burden. A family suffers a cost burden when more than 30 percent of their income goes toward housing costs. In Philadelphia 40 percent of all households are cost burdened. Income disparity widens that gap considerably. In 2020, only 15 percent of households earning more than $50,000 were cost burdened. 88 percent of those with incomes under $30,000 were. No massive redistribution is necessary. Just a modest increase in income would pull many people out of the desperate state of cost burden. Compared to other large cities, houses in Philadelphia are relatively affordable. But incomes here are low. Until incomes rise, people suffering from cost burden will never be able to participate in home ownership.

How can a city like Philadelphia work to increase income and therefore home ownership? Better education and a friendlier business climate. Housing availability and affordability are not the problems. A poorly trained workforce and the city’s inability to attract businesses are behind our challenges with home ownership.

Jefferson, for all his faults, resisted the call of other Southern landowners to establish an American aristocracy based on the holdings of large plantations. He knew property ownership widely dispersed would invest citizens in the new democracy and ensure the success of the American experiment. This remained pre-eminent throughout westward expansion, the industrial revolution, and the great migration into the country during the early 20th century. Fair, government-backed home loans helped pull us out of the great depression and firmly established American exceptionalism after WWII.

We must remain focused on homeownership as we meet the challenges of the 21st century. In my neighborhood a diverse group of people with diverse political opinions holds together because most of us own our houses, forging a strong, cohesive community. While we disagree on much, when there was drug dealing in the pocket park at the end of the block and a rat issue caused by the way trash was being put out we came together and solved each problem. We are fully invested in the livability of our neighborhood as we keep an eye on good governance, good schools, and property values.

A short walk from where Jefferson struggled with the word property we maintain our properties, working towards a Philadelphia that will always represent the best ideals of the founders. Property ownership fosters democracy, and we must do all we can to make ownership available to all who want to join the community and pursue happiness right here in Philadelphia.

George Hofmann writes the newsletter Practicing Mental Illness. He lives in Philadelphia with his wife, their daughter, too much coffee, and a dog.