> The foreclosure crisis creates
> a real opportunity here.

The most terrifying sentence I've read all week, and it's be a time of wicked fear.

I mean, really ---

> controlling for income and
> demographics, homeowners are no
> happier than renters, nor do they
> report lower levels of stress or
> higher levels of self-esteem.

Amy, didn't that make you giggle?

Self-esteem! Stress!

I don't agree with a lot here, especially banks being "required" to offer to rent each home to the speculators. But, I like the idea of stopping the paranoia to own a home -- at all cost. That's what attracted me to this passage.

I agree that homeownership has become a sacred cow. I think this will probably change as the employment dynamic changes. Back in the day, people worked for the same company their whole lives and then retired with a gold watch and a pension. Obviously this is no longer the case. As the author points out, it's important for people to be able to relocate easily.

However, let's not lump "artificial demand for bigger houses" together with ALL homeownership. The sanity test of average income to average home price still applies - houses in the lower price ranges are still selling and haven't lost much value, at least where I live. Granted, I put 20% down on my condo, but my monthly payment is less than I'd be paying for rent in this area. And in another four years those payments are done. My biggest monthly expense will disappear.

That's the part I wonder about - how the younger generations are going to get by in their older years if they're still forking over rent payments. We don't have pensions, we aren't going to have Social Security, and it will be a miracle if the market recovers in time for our 401Ks to do us much good. That means we are going to have to keep working. It might mean working part-time, or working six months then taking six months off, and isn't necessarily the end of the world. It can be done easily if your expenses are low, and living in a paid-for house is one way to do that.

Living in a neighborhood with more and more renters, I can say some drawbacks: they don't have pride of ownership and don't care for the house, yard, or neighborhood, since they're out of there when the 12 month lease is up, most likely. Also, my mortgage, which is only 4 years old, is already less than rental payments in this neighborhood, and won't go up. And in about 18 more years, those payments go to zero, just in time for my kids college.

I agree not everyone should own, by a long shot. But encouraging most to rent is a financial detriment to them while enriching a few landlords. Fine and dandy, but not something we try to get the whole country to go to lock stock n barrel.

Amy,
I bridled at first at this post - because it's so evidently a self-serving vindication of your personal situation! (And I'm a conventional home owner - it's a delightfully kooky but solid Victorian dwelling, thanks for asking!).

However - although I also agree with Pirate Jo here - it's interesting that home ownership is NOT a sacred cow in, for example, Germany. (This is based on chatting to senior German scientists).

I have not investigated further. I can't answer why the mature German middle class, with families, in cities, accept rental status as the norm and don't see ownership as part of their eventual (crucial) financial legacy -after tax -to their kids - as they certainly do in the UK.

I know it's due to some extent because it's far more difficult to buy outright in Germany.

But it makes me suspect the desire for home ownership IS more a product of a country's policy than, say, an occult quality of universal human nature.

(In short, you have a point!)

"But encouraging most to rent is a financial detriment to them while enriching a few landlords."

On the other hand, if a local economy goes south, only those few landlords are going to suffer, instead of everyone. What if all the residential property in Detroit was rental, and owned by a small handful of people? Hasta la vista, baby.

Another homeowner here who would not be able to afford today's rent on our (very modest) house. Pirate Jo makes and excellent point about retirement and renting: retirement incomes are frequently fixed whereas rents are not. Our mortgage will be paid off in another 15 years, just about the time we're ready to retire (provided we still have gainful employment for the next 15 years). We can cover mortgage on one income if we have to and our interest rate is fixed, so is our payment and no rent increases to have to factor into the mix.

Another advantage to ownership is that (usually) there are no restrictions on pets. My experience renting was that it's extremely difficult to find landlords who will allow pets.

"Houses in a not-so-great neighborhood in Detroit that were appraising for $120K-ish are now appraising for $20K. And these are houses that probably sold for more than that in the 50s."

Doesn't surprise me at all. And this affects thousands of people who have lost their jobs and now wish they could sell their homes and leave Detroit, instead of a small handful of landlords. Of course if you still had a job and didn't want to leave, it wouldn't matter to you what your house appraised for - you still have a place to live, which is the main thing. It was a mistake for people to start looking at their homes as "investments" in the first place.

"the push to get everyone to own a home isn't such a good thing"

And think about who was doing the pushing. It wasn't the laws of supply and demand. Had the market been left alone, it would have found a desirable balance between renters and owners by itself.

"The solution begins with the removal of homeownership from its long-privileged place at the center of the U.S. economy."

This is the most Orwellian nonsense I've seen you allow on here. How you can advocate personal responsibility in most instances, yet push the idea that property is for other people, is also another fine example of schizoid thought.

I'll explain.

If you look at commercial property, for instance in Florida, you'll find that a few firms like DeBartolo speculated and bought thousands of huge tracts. Just what will be the antidote to "big property", or "big rent"? Right: more government. That's good how?

The problem now is with people overextending themselves - in a historically brief period of time - and the solution is to take the purchase of real estate away? Damn - there are already huge limitations of what one can do with land and housing, and it is already "rented" from the State, who will grimly escort you from your premises if you don't pay taxes, even for services you won't use, some of which are for people who don't care about your position and said so at the ballot box.

A nation of propertyless people. Does that sound like Utopia? Really?

The city of New Haven, CT, uprooted people by condemning their land so that an office complex could be built, raising tax income for New Haven.

I expect you to applaud that now. That's what happens when individual rights are subverted. That the bailout - the "second wrong" - is out there does not change the identity or role of individual rights.

People work best in their own interest. Go look at the projects and see what ensues when "somebody else" owns the living quarters. Do be sure to plot the crime rate and note the prohibition of self-defense weapons.

I agree with Pirate Jo down the line.

Of course, I'm a renter, not by choice, because of some hard luck and some stupid decisions in my uneducated youth. Meaning I learned some shit the hard way. But I'm a GD renter.

Oh, yeah, and because I was never "stupid" enough to go for these ridiculous mortgages that are now causing the problem. Wish I had been but I couldn't forsee then that if I was stupid with my money the government would turn around and help me mug my fellow citizens. I only wish I had been because I can't afford to be mugged as I am being for those who weren't so conscientious. That's my reward for being responsible.

Amy, your experience renting has been good. You're part of a very lucky minority. Your landlord is a minority of a landlord.

I'm fed up with this notion that renters don't want to live in a nice home. The hell we don't. But most landlords, psst, aren't in it for pride of ownership. They are in it to make a buck. I've been renting since I was 18 and I turn 51 this week. I've only had a few landlords (and those in complexes that were run in a business-like manner; individual owners are shit, they're just like the house flippers out to make a quick buck). Let me clue you into something, momof3, it's not the tenants that are causing the problem.

It's the landlords that won't upkeep the property they own and you've no guarantee of reaping the benefit if you spend your time and money and energy fixing up; more likely, they'll not renew your lease and use your fixups to rent it to someone else at a higher rate. But, yes, we must blame the renters for not maintaining the property that doesn't belong to them. Question, why would we take "pride of ownership" in something we don't own and don't know how long we'll even be able to enjoy.

End of being on the short end of the landlord-tenant stick rant.

I wouldn't mind seeing this happen except that I think it would already exacerbate a growing problem -- at least where I live. Supply and demand is one-sided. Finding a place to live when you rent that's decent, means not only high rents but new things in recent years cropping up. Getting a lease is getting akin to getting a mortgage. Unless you rent from the worst of the worst.

If renters were in the majority (actually I guess that's what I'm living), the very competition from fellow would-be tenants would drive rents up and up and up (and, likewise, quality down, down, down). Landlords are even less encouraged to upkeep -- I mean upkeep, not slap on cosmetic stuff to show the place -- because they have people lined up around the block. We're seeing more and more apartments charging application fees here. You have to not only pass credit checks but have impeccable references, make certain income levels, and, often, know somebody they know. (I did have people I knew in common with my current landlord.)

In short, obtaining an apartment is edging closer and closer to becoming as difficult as obtaining a mortgage. Since I can't get a mortgage and am four years away from retirement, this has me majorially worried. And Jo's right. Mortage gets paid off and stays the same until it is (unless you were stupid enough to go adjustable rate). When I can't rent some place decent because I have to jump as many hurdles as I do to get a mortgage, guess what my choice will be even at my age?

And, ps, my last day of working for a living will be the day before my 55th birthday, whether I rent or own. This is not up for debate no matter what happens to the economy. I'm done. I'll be struggling to work that long as I'm in extremely poor health but I'll make it that far and collect my pension and my other savings and retire, whether here -- or if upstate NY keeps tanking and forces me to desert a sinking ship -- or elsewhere.

Radwaste, you've lost me.

"the idea that property is for other people" - How about, you decide for yourself, and other people decide for themselves, and whether property is for you or not is decided upon an entirely individual basis. Some people want to change cities every two years. Some want to stay where they are. Some people are working, others are retired. All the property in a single city doesn't HAVE to belong to a small handful of people - but it could, depending upon a whole bunch of factors. So I'm running into you here:

"Just what will be the antidote to "big property", or "big rent"? Right: more government. That's good how?"

Well, big property/big rent would have to make people happy, or owners could be left with their money sunk into huge tracts of residential property in a city where no one wanted to live and rent from them. Tough shit, guess you should have been a better landlord. In other places people would want to buy their own stake in a place and stick around for a while. They would make this decision based on individual circumstances. Why do you assume "more government" (which I hate just as much as you do) would be the result?

And where do you get "take the purchase of real estate away?" Who is taking it away? It was the government that gave homeownership its "long-privileged place" from the start. If it removed these artificial incentives, fewer (or, for all we know, more, given falling prices) people may decide to own homes. Why do you assume the government would own the rest? "Rented from the state?" The original argument is for the *removal* of government from this equation, not the addition of it.

"Question, why would we take "pride of ownership" in something we don't own and don't know how long we'll even be able to enjoy."

And that was exactly my point. I rather doubt most leases require the owner to come and mow and edge and weed and water things and haul your trash out weekly and fix up the oil stains from your car in the drive. And renters rarely bother to do these things because why should they? And that screws up the whole neighborhood, especially for those of us who do own.

Anyone who's ever owned a condo can speak to the problems of renters. I was on the board for my condo and I'd say that 85% of problems relating to things like noise, unruly pets, trash in parking spaces/garage, violations of Pool rules, etc were tennants, not owners.
That's just the way it is. When I rented one of the things I hated the most was the right of the landlord to walk into my apt anytime he wanted (with notice, of course). I know I'm a lot happier owning instead of renting. It's also due to retirement planning. Finances during retirement is all about cash flow. Having a paid off mortgage makes that a lot easier.
One thing about that article:
"That means less spending on medical technology, or software, or alternative energy--the sectors and products that could drive U.S. growth and exports in the coming years."
Huh? He thinks that's the future of the US Export economy? Software I'm on board with but "Alternative energy"? Does he think the US is going to be exporting windmills and solar panels? Those will be manufactured elsewhere, like everything else. And Medical Technology?? Like what? MRI machines? Hip Sockets, replacement knees?? Again, likely to be manufactured elsewhere. I think the US economy is in even more dire straights than this article suggests, in the longer term.

Jo, I think you've lost more than just me...

"How about, you decide for yourself, and other people decide for themselves, and whether property is for you or not is decided upon an entirely individual basis."

That's exactly what I'm backing. It's the removal of home ownership from its key position that I object to, and I think it should be obvious why.

"All the property in a single city doesn't HAVE to belong to a small handful of people - but it could, depending upon a whole bunch of factors."

No, it WILL, because the number of savvy investors and business managers is far smaller than the number of consumers. How many WalMart, Incs are there? This has already happened, which is why I brought up Debartolo.

"Well, big property/big rent would have to make people happy, or owners could be left with their money sunk into huge tracts of residential property in a city where no one wanted to live and rent from them."

No, the State or city imposes rent controls.

"In other places people would want to buy their own stake in a place and stick around for a while. They would make this decision based on individual circumstances."

I have no idea why you would use the term "buy their own stake"; immediately, renters "buy" nothing. Condo "owners" buy a stake in a community just a stockholders do, but their influence is diluted with numbers.

"Why do you assume "more government" (which I hate just as much as you do) would be the result?"

I - we - don't have to assume it. You can see it in big cities and in small, "elite" coastal communities already. You can see it in housing-development covenants to a lesser degree.

"And where do you get "take the purchase of real estate away?" Who is taking it away?"

The author of the referenced piece. If you have a way to buy a home without buying real estate, please let me know. Think through what the article's consequences would be first.

"It was the government that gave homeownership its "long-privileged place" from the start."

Oh, hell no! You've substituted recent events for actual American history. Property owners were originally considered the only rightful custodians of land on this continent, and the government was set up based on this - the principle that with ownership comes responsibility. But there's a big, huge mistake people make today, a thing I want everyone to see: possession in debt is not ownership.

I agree with anyone who says that recent incentives encouraged people to act rashly, because that's clearly the case, but it's not Grandpa's paid mortgage on his house that made them go nuts.

"Why do you assume the government would own the rest?"

I don't have to assume anything but this: that the agency paying gets to say what is done with the money.

"The original argument is for the *removal* of government from this equation, not the addition of it."

Catch the reference to Orwell? Now, regardless of what you say about what happens, what really happens when you cause the "...removal of homeownership from its long-privileged place at the center of the U.S. economy"?

Read that out loud. Please.
-----

Go look at state bankruptcy laws, which vary, of course. What law is better for the individual - the one that renders her homeless when bankruptcy is declared, or one that doesn't? Which way is really better for the State?

Go look at your 401K right now, if you still have one. Just what investment do you propose to make that is less volatile than a house and the land it sits on?

When you talk about value, you should be thinking of real utility. Homes have that. This is not changed by pretending they're a commodity you can afford to lose.