Dean Baker: The Homeownership Ideologues

[marmar]

The Homeownership Ideologues
By Dean Baker
t r u t h o u t | Perspective

Monday 21 April 2008

The economy is sinking into a recession and faces the worst financial crisis since the depression. The unemployment rate is rising, the foreclosure rate is soaring and home prices are plummeting. It's time to settle some scores with the people who brought us to this sorry state of affairs.

The identity of some of the villains is already widely known. At the top of the list is Alan Greenspan for his malfeasance in allowing the housing bubble to expand to ever more dangerous levels and ignoring the explosion of predatory mortgages. Then, we have the mortgage brokers who made the predatory loans and the Wall Street wunderkind who repackaged them in complex financial instruments and sold them all around the world. We can also include the builders and the realtors who profited from and promoted the irrational exuberance that fed the housing bubble.

But there is one group that still needs to be singled out for their role in bringing about this disaster: The ideologues of homeownership. These are the folks who push the ideology of homeownership as an end itself. They insist on lavish government subsidies, even in situations where homeownership is not a good solution for the people affected.

To be clear, homeownership is often desirable. It can be a mechanism for providing good secure housing and, also, for accumulating wealth. It is, therefore, reasonable to have policies like a limited mortgage interest deduction or credit that make it easier for low- and middle-income people to become homeowners.

However, homeownership should not be viewed as an end in itself. One of the reasons millions of families face foreclosure and/or the loss of their life's savings is the ideologues of homeownership continued to promote homeownership even when it was clear buying a home would be financially detrimental. ......(more)

The complete piece is at: http://www.truthout.org/docs_2006/042108A.shtml

[yardwork]

1. It's the ideology of DEBT, and it's pushed because it buoys the stock market.

Every twenty years or so the right-wingers think of a new way to convince people to spend more than they earn. In the 1980s, it was "greed is good" and we were all taught to "leverage debt" as a way to make money. In the 2000s they came back around again and encouraged everyone to buy houses way beyond people's means and put zero cash down. Why do people fall for this? We've been taught that money is the highest possible achievement.

[Kindigger]

2. Its asshole's fault

I remember when he said in his SOTU speech how he wanted everyone to be able to say, "welcome to my home". I thought, "who are you to tell me I even WANT one?"

... I believe owning something is a part of the American Dream, as well. I believe when somebody owns their own home, they're realizing the American Dream. They can say it's my home, it's nobody else's home. (Applause.) And we saw that yesterday in Atlanta, when we went to the new homes of the new homeowners. And I saw with pride firsthand, the man say, welcome to my home... He was a proud man. He was proud that he owns the property. And I was proud for him. And I want that pride to extend all throughout our country.

...The third problem is the fact that the rules are too complex. People get discouraged by the fine print on the contracts. They take a look and say, well, I'm not so sure I want to sign this. There's too many words. (Laughter.) There's too many pitfalls. So one of the things that the Secretary is going to do is he's going to simplify the closing documents and all the documents that have to deal with homeownership.

http://www.hud.gov/news/speeches/presremarks.cfm

[aquart]

3. OR, we could build deliberately affordable homes.

Now there's a concept.

[Skittles]

4. he's not bragging about home ownership now, is he?

he is indeed a f***ing asshole

[yurbud]

5. I always wondered why being massively in debt was a good thing...

[Lydia Leftcoast]

6. There's tremendous pressure to buy a house

Just as people who choose not to have children come under pressure from all sides, people who choose not to buy a house get treated as if they're stupid, missing out on something wonderful, not providing for their own old age, missing out on tax breaks, not taking adult responsibilty, etc. Yup, it's the same arguments that more conventional types use against those who choose not to have children.

Yet just as parenthood doesn't make sense for everyone, neither does homeownership.

Financial pundits push homeownership, lending agencies push it, real estate agents push it, friends look at you funny if you rent rather than own, relatives worry about you. Everyone tells you that your rent checks are "wasted."

Well, hey, I get to live in a better apartment than I could buy in a neighborhood that I could never afford to buy in, and if it becomes to expensive for me, I can leave in thirty days.

I don't have to pay for repairs or renovations. I don't pay city assessments or property taxes, except in the manageable form of slightly increased rent, the total cost for the building being split among the tenants.

My rent payments are no more "wasted" than my grocery money is.