Home ownership; THE GRASS MIGHT BE GREENER IF IT'S SHARED

About half of Dan Freeman's friends own houses. About half -- like him -- don't. This is how neatly the line can fall. What seemed until recently to be a matter of timing to Mr. Freeman has become a chasm he can't get his family across.

His town, Orange, Calif., is average: a suburb on an outside edge of the Los Angeles sprawl full of the white frame houses and modest stuccoed casas that people came from the Midwestern to live in half a century ago.

With he and his wife both working full time, his kids in junior high, and luxuries like vacation trips already shaved, Dan Freeman can't quite accept the idea that he can't buy a house here. But it's in the numbers, and the Freeman's frustration rises. They need close to $40,000 in combined annual income and some $20,000 down to qualify for a loan that will buy them a house in Orange.

It's not a private problem. Behind it, for many young families, is the sound of a symbol crashing.

Nor is it a California problem. According to Glen Crellin, an economist with the National Association of Realtors, California is a preview of what's to come, sooner or later, for the rest of the nation.

As American dreams go, owning a house is the most popular Americans have had since World War II, and it may have been the dream most people were able to realize. Until Now.

The lawn was a private paean to open space. The living room -- off limits to the kids -- waited shrinelike for the really nice occasion that almost never came. Now some say the grass may be greener if the lawn is shared.

"Home ownership," President Ronald Reagan declared in christening a special commission for affordable housing last month, "is a symbol of the family unit and neigborhood and is essential if we're to have social and economic stability in our land." The problem is that in California, and to an extent elsewhere, the good life seems to have run short. There are too few houses and too many households. And, of course, the houses cost too much for people who don't already have real estate sweeping them ahead of inflation -- or in- laws boosting their fortunes.

Most young families climb out of the back seat of the real estate broker's sedan disappointed, a sympathetic broker says.

For them, "The vision of the single-family house in the suburbs is simply not viable any more," says Rocky TArantello, assistant professor of business finance and economics at the University of Southern California.

"This is not a bump in the road," George sternlieb at Rutgers University warns. "It's a major turning point in a 50- year housing cycle." Dr. Sternlieb, director of the Center for Urban Policy Research at Rutgers, predicted the present housing problems some 10 years ago in his book, "The Affluent Suburb."

The upshot, the residential landscape that will emerge from the current crunch, is already being built. The popular ideals are likely to change with the landscape.

"You don't have to create the future, it's already here," Dr. STernlieb insists. He points to the number of children per family, which has dropped as more women take up careers to make ends meet. (Housing has risen from 18.3 percent of monthly budgets in 1970 to between 35 and 40 percent.) Lives are changing already, in Dr. Sternlieb's view, and attitudes will follow a step behind.

Most condominium owners, for instance, see themselves in a temporary shelter on their way to a single-family house. If they are frustrated in their progress , their priorities may change. More of their money may go to eleborate vacations every year instead of toward the lawns, heavy mortgages, and big families associated with a single-family house.

The California landscape in 10 or 15 years may look more like the French Riviera, Fred Case, an economist at the University of California at Los Angeles, speculates.

This means, above all, density. Houses are being built smaller. Dr. Case foresees a standard 16 units to an acre, up from a current standard of about 5 per acre, and a Mediterranean-style orientation to the sun to cut the cost of heating. Some American builders are already building expensive new homes so well landscaped and designated, Dr. case says, that at 16 to an acre you hardly know how densely packed the units are.

Behind the shrinking size of new houses is the shrinking size of the family. As the postwar baby-boom generation comes into home-buying age, it is grouping into smaller families than previous generations. More singles, more single parents, fewer children, and often the same big, free-standing houses.

If housing space in the US were divivied up according to the bigger family standards of the 1950s, says William Baer, dean of USC's School of Urban and Regional Planning, there wouldn't be a housing shortage.

And that, roughly speaking, is what many are doing:

Older people in big suburban houses are teaming up as housemates, both for splitting costs and for company. Young families are looking to the rowhouses and mobile homes that their parents often scorned. Inner cities are rejuvenated by professionals moving in from the outskirts, a trend many think will grow. Even well-heeled young couples are sharing houses -- shopping for two master bedrooms and big kitchens.

There are very positive sides to the move toward density. With households shrinking, remarks Catherine Berheide, assistant professor of sociology at Skidmore College, "people are becoming terribly isolated in their homes." She thinks denser living arrangements can help overcome some of that isolation.

"People rebel against that notion," Dr. Berheide says. They tend to hold to the ideal of a single-family dream house out in the woods. "But if you want your children to have friends to play with, get to violin lessons, be near parks and schools," she explains, "It's easier to be around other people."

Single parents especially, she says, prefer condominiums to houses. The upkeep is lighter and there are familiar neighbors around to help with whatever problems might arise.

Some think housing costs could lead to a revival of the three-generation family, as married children and their parents set up house together. The outcome could be more children who understand their grandparents, and fewer grandparents who, somehow, don't like children. It's not always an easy household to manage, but such extended families are generally considered to be a healthy improvement on the nuclear family.

Most economists say that the United States -- and not just California -- is headed toward a more European-style housing market in another way, too. More people rent, or buy only with government help.

"We're going back to the old way of doing things where if 50 percent of the people own, that's good. The rest rent," Case projects.

Those who do buy houses will buy under different conditions. Many buyers will either share their house with another family or split equity with an outside lender. At Stanford University, for example, the school lends mortgage money to incoming faculty for a stake in the investment. This kind of arrangement may spread.

But chiefly, homeowners will carry the risks of shifting inflation and interest rates, not lenders. So while 10 years ago the average family could hardly afford notm to buy a house, high interest and the new, variable mortgage rates are already making real estate more of a high-risk investment. Renting becomes more attractive.

"Rentng," Dr. Tarantello of USC says simply, "isn't so bad."

But the question of renting or owning, as President Reagan's comment indicates, rings up a major national ideal.

The drive to own a house is so deeply enmeshed in the "American fabric," as Kate Smith, chairman of the Housing and Interior Design at the University of Missouri, puts it, that renting may never be the answer, especially in Middle America.

She recently asked a class of 60, all of whom grew up in suburban, free-standing houses, how many would consider living in an apartment. Three people raised their hands. The rest wanted to repeat their background.

"It will be a dream that's hard to kill," Dr. Rogers says.

Ironically, the ideal is almost as new as it is ingrained. It wasn't until the late 1940s that the single-family home of one's own became a national goal. In the 1920s and '30s, the US was largely a nation of renters.

When the GIs came home from World War II, however, they had government-sponsored loans for cheap mortgages, cheap fuel for driving out to the country from work every day, and wives who would tend the household full time.

And most important of all, they had children. Children, Catherine Berheide notes, are closely tied to the dream house in the country. We seem to think the country air is good for children, she says, although it may be more important that children be around other children.

Gasoline is expensive now, and two parents often have to be near work, rather than just one. If they both commute, it leaves little time for the children, much less taking care of a big house. Higher density and shorter commuting distances can make life easier for the modern family.

Yet, as long as there's a generation around that grew up in a suburban environment, comments Seth Reichlin, professor of sociology at the University of Pittsburgh, change will come slowly. Dr. Reichlin's research has centered in Midwestern suburbs. Here, people are more likely to work harder to maintain their standard of living, he notes, rather than to look for alternatives.

And, according to John Quigley of the University of California at Berkeley's Graduate School of Public Policy, for most people who are "just folks" (those not in the top 20 percent of the income scale) home equity is the only form of accumulated wealth they have.

The intricacies of new loan mechanisms, however, don't guarantee much accumulation of wealth.

Housing itself could pack some political punch as an issue in coming years. For the first time in 50 years, according to George Sternlieb, housing has to compete with business and government for loan money. And housing is clearly a lower priority with the Reagan administration than industry.

If industry succeeds in growing at all in the next few years, Sternlieb says, the home buyer will find it very tough to get money.

"'Housing in Washington has meant poor folks and black folks -- folks that aren't so popular. But it could become thee and me.Then there might be some fireworks."

Meanwhile, lower-income people are expected to be further squeezed in the inner city by a continued influx of professionals moving closer to work and to each other. According to M. Bruce Johnson of the University of California at Santa Barbara and director of the Pacific Institute for Public Policy, Office of Management and Budget Director David Stockman's figures on the need for public housing in the coming decade area staggering. "Housing could become literally a public utility."

M. Bruce Johnson blames California's shortage chiefly on zoning restrictions that prevent growth. Neighborhood zoning ordinances started out to control nuisances and developed into a tool for keeping the level of the neigborhood up, keeping out the "riffraff," Dr. Johnson explains. "There is some element of class struggle in all this," he says, "camouflaged by the environmental issue." The solution, to him, is rolling back the regulations and letting the market fulfill the need.

A complication, though, as Fred Case points out, is that California's community governments can no longer afford to provide the services new neighborhoods require. Their response has been to lay more of the responsibility for providing schools, roads, and utilities on the builders. Prices go up.

The California Governor's Task Force on Affordable Housing has recommended, along with some streamlining of regulations, creatting five brand new towns to make up the standing shortage of houses. The towns would include affordable housing (defined here as housing affordable by people who make between 80 and 120 percent of the average local income) and easy proximity to factories and business.

To become reality, these towns will take an enormous capital investment, Dr. Case, again, points out.

But towns of 30,000 to 50,000 people, he says, are the optimum size for schools, services, and industry. And a town like this could generate perhaps 30 percent of its energy through solar power, if planned properly.

Other voices echo Seth Reichlin, though, when he remarks that at some point, "People will redefine what the good life is."