August 23, 2010

IS IT A FETISH IF IT'S UNIVERSAL?:

How a homeownership fetish hurt the American dream (Robert J. Samuelson, August 23, 2010, Washington Post)

Historically, the pursuit of homeownership dates to the Great Depression of the 1930s, notes historian A. Scott Henderson of Furman University. In some ways, it's a great success story. In 1940, 44 percent of households owned a home; by 1985, the rate was 64 percent. The size and quality of homes have increased dramatically. Owning a home contributes to neighborhood stability and encourages property improvement.

Unfortunately, we let a sensible goal become a foolish fetish. Not everyone can become a homeowner. Some are too young and footloose; some are too old and dependent; some are too poor or irresponsible. Some don't want a home. Even with these gaps, homeownership is virtually universal among the middle-aged middle class: almost three-quarters of Americans ages 45 to 54 and four-fifths ages 55 to 64.


Mr. Samuelson is an economist, and so views homeownership through the lens of economics. As he points out, even changes in our economic policies would only be expected to reduce our high ownership rates slightly. This might make some economic sense, though the caese does not seem clear cut.

The problem is that homeownership is not primarily an economic matter, but a political one, even the political one, as James Madison said in Federalist #10:

[T]he most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government.

The question is then, not whether there are some marginal economic benefits to be found in a lower rate of homeownership, but what are the political consequences of expanding the number of voters who lack property.

The obvious solution, of course, is to tie to the franchise to property ownership, but we're long past the point where the sensible is feasible. Instead, it is a proper role of government to ease the path to homeownership.

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Posted by Orrin Judd at August 23, 2010 4:40 PM
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