Lots has been written about the declining rate of home ownership in America.
Henry Grabar at Salon sees this as a good thing, as he explains in America is so over homeownership: Why the shift to a renting economy might actually be a good thing:
This is bad news, insofar as it demonstrates that Americans are struggling to buy homes. It’s bad news for the housing industry, whose greenfield development machine has less fuel. But as a long-term development, it signifies an emerging model of American life released from the cult of homeownership. It would make Americans more mobile (as we once were), and more able to adapt to economic changes. Jordan Rappaport, a senior economist at the Kansas City Fed, elucidates some benefits of the shift from single-family to multi-family housing (which is closely related to the owner-renter shift):
“It will shift consumer demand away from goods and services that complement large indoor space and a backyard toward goods and services more oriented toward living in an apartment. Similarly, the possible shift toward city living may dampen demand for automobiles, highways and gasoline but increase demand for restaurants, city parks and high-quality public transit.”
I generally find the posts at Salon thoughtful, but this one is way off the mark. Being “released from the cult of home ownership” is made to sound appealing, but here’s what’s really happening:
The concentration of wealth in America is approaching levels not seen since the days of William McKinley and the robber barons, when an elite few controlled vast sums, but the majority of Americans were destitute.
The lone remaining difference between how things were then and how they are now is home ownership.
Consider two statistics: In 2010, the share of the bottom 80% of the population in total U.S. wealth was a meager 11.1%. That’s pathetic, but if you remove home ownership from the equation it gets far worse. Not counting homes, the share of the bottom 80% in financial wealth was 4.7%. In all likelihood, it’s declined a bit since then, and headed lower. To put that in perspective, it’s in the same range of the share held by the Forbes 400. There are a quarter BILLION Americans in that bottom 80%, by the way.
So, when you read that a hedge fund controlled by the Blackstone Group has bought up 45,000 single family homes, or that half the residents of Philadelphia no longer own their homes, you’re not seeing Americans “released from the cult of home ownership.”
Rather, you’re seeing Americans “released” from their already miniscule share of national wealth.
@brucedesertrat,
That is what the likes of Koch brothers and their ilk want our nation to turn into: A bunch of Joads, going from job to job. Undercutting their way to any job available.
Good grief, Bob, I have to be careful reading your commentaries. Otherwise you might just change my mind about higher taxation of the wealthy. I was unaware of the extreme difference of the 80% on the bottom. And the guy who thinks declining home ownership is a good thing is an idiot.
I don’t know if I’ll ever change your views on taxation of the wealthy, Steve, but let me give you one question to consider: Why is it that we apply the same marginal tax rates to those making half a million a year as we do to those making a billion a year? In othe words, why does the progressivity of the income tax stop at half a million (actually, $450,000)? It never used to. Conservatives will defend it in the name of simplification, but isn’t that pure hogwash? The complexity of the tax code isn’t embodied in the rate structure, it’s embodied in the myriad deductions, credits and other tax preferences, and the anti-abuse rules necessitated by those preferences.
Okay, I agree with you that the $450,000 cut-off doesn’t make any sense. Billionaires should be taxed at a higher rate than millionaires. And there should be some gradation in the millionaire scale, as well.
I am choking as I admit this, dammit!
Thanks, Steve. And it could be worse. At least you’re not having to concede a point to the BlueMeanie.
Oh, so you’ve noticed a certain low level animosity there, hmm? Well, the truth is that if AZ Blue Meanie would tone down the hyperbole and focus on the facts, I might find myself forced to agree with him from time to time. I’m not holding my breath, though.
“It would make Americans more mobile (as we once were), and more able to adapt to economic changes.”
Am I the only one to flash upon images such as this one?
The Joads are a model to aspire to?