I was reading John Carney’s article The FHA is a Looming Disaster yesterday and had one of those, "Man I wish I’d said that," moments. Carney stated: [Hat tip Freedom's Phoenix.]
The discredited ideology of home ownership is the most toxic ideology since communism.
Amen. We have read ad nauseam about the "benefits of homeownership". Typical is this 2003 paper from the Kogod School of Business [And coincidentally funded by the National Association of Realtors] , filled with all kinds of impressive mathematical models. It came to this conclusion, that looks rather ludicrous from today’s perspective:
These findings empirically support an additional rationale for national and local policy makers to support the growth of single-family housing and mortgage credit markets. Residential home ownership and the housing market smooth the national consumption/business cycle. Homeowners use their mortgage balances to fund consumption when there are downturns in income. The ability to increase the mortgage balance comes when interest rates are low, frequently during recessions. Therefore, the
housing market offers homeowners the opportunity to stabilize and smooth their consumption over the business cycle.
During the recent 2001 recession, housing remained strong, and coupled with the refinancing of existing mortgages, softened the economic downturn. After refinancing their mortgages, homeowners used these proceeds for college tuition, furniture, debt reduction, vacations, cars, and other personal consumption. This consumption smoothing enabled by residential housing ownership and the mortgage markets provides positive outcomes for individuals, households, and society.
Housing has been marketed to Americans like a Billy Mays commercial- It slices, it dices, it juliennes- but wait! That’s not all! It makes you wealthier, provides stability, makes you healthier, has social benefits- and lowers your taxes!
George Carlin may not have had a college education and he didn’t write papers with fancy mathematical models, but he had a better grip on what housing really is. Carlin defined a house as "a place to put your stuff".
The language in this video isn’t quite up to Doom’s usual standards, but I’m posting it here because Carlin, even while being humorous, makes more sense than the clowns in Washington who created this mess.
Housing as an answer to all society’s ills is a "toxic ideology". As a "place to put your stuff", if you can afford it, it makes a lot of sense.
Classic Carlin! I remember buying his FM/AM record back in the 70’s
Housing ownership is certainly being reconsidered from a policy perspective. Much like unemployment was rethought in the 80’s, there is probably a natural rate of housing ownership for any healthy economy.
Much of the past policy justification was based on owner occupied neighborhoods being more stable with respect to employment, crime, education, etc. The premis of much of this academic drivel is being refuted by the simple chicken and egg question. Are neighborhoods more stable because of ownership or because or education which is related to employment which is related to crime…