Americans like single-family homes and especially owning a home that appreciates in value. What if this is the wrong way to go about providing housing?
At the core of American housing policy is a secret hiding in plain sight: Homeownership works for some because it cannot work for all. If we want to make housing affordable for everyone, then it needs to be cheap and widely available. And if we want that housing to act as a wealth-building vehicle, home values have to increase significantly over time. How do we ensure that housing is both appreciating in value for homeowners but cheap enough for all would-be homeowners to buy in? We can’t…
Fundamentally, the U.S. needs to shift away from understanding housing as an investment and toward treating it as consumption. No one expects their TV or their car to be a store of value, let alone to appreciate. Instead, Americans recognize that expensive purchases should reflect their particular desires and that the cost should be worth the use they get out of them…
I should be explicit here: Policy makers should completely abandon trying to preserve or improve property values and instead make their focus a housing market abundant with cheap and diverse housing types able to satisfy the needs of people at every income level and stage of life. As such, people would move between homes as their circumstances necessitate. Housing would stop being scarce and thus its attractiveness as an investment would diminish greatly, for both homeowners and larger entities. The government should encourage and aid low-wealth households to save through diversified index funds as it eliminates the tax benefits that pull people into homeownership regardless of the consequences…
If we are interested in helping low- and middle-income people live well, we need to fix renting. Some potential policies include increasing oversight of the rental market, providing tenants with a right to counsel in eviction court to reduce predatory filings, advancing rent-stabilization policies, public investment in rental-housing quality, and, most important, building tons of new housing so that power shifts in the rental market from landlords to tenants. Even if nothing changes and America’s love affair with homeownership continues, tens of millions of people will continue renting for the duration of their lives, and almost everyone will rent for at least part of their life. Financial security, reliable and reasonable housing payments, and freedom from exploitation should not be the domain of homeowners.
There is a lot to think about here. A few thoughts:
- Is the entire goal of the American system to generate money through property and ownership? Owning land and property has been very important from the beginning not only for what land could be used for and the money that could be generated but also because of status and rights attached to owning land and homes.
- Who is homeownership for? Consistently in American life, it is more available and profitable for wealthier white residents. Policies and ideals have promoted and perpetuated this.
- Given #1 and #2, renting is not just a difference in how one pays for their dwelling. It is a difference in how a person is regarded and what is viewed as ideal. The current system may have vast disparities in homeownership and the wealth generated by it but renting or renters is disagreeable to a good portion of Americans.
- Even if the goal remains to help adults in the United States attain homeownership, more could be done to address renting or obtaining a first property or addressing racial disparities in housing values. Ignoring renting means that it could limit people in the future from owning a home. Or, not having entry-level housing means people cannot easily move up. Or, help limit the disparities in housing values based on existing patterns. Promoting only homeownership is short-sighted.
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