Thursday, April 7, 2011
Luxury or Need?
Here's an interesting article to think about as our discussion moves forward. The author of Foreclosure Nation treats home ownership as something that should be encouraged for all Americans. Paul Krugman examines that assumption here and talks about the Federal Government's attitudes towards home ownership. I'd like to know what everyone else thinks about the idea of home ownership as a part of the American Dream because in many cases, it isn't necessarily the best option for all citizens.
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I really agree with Krugman on this one. I particularly like his point that home ownership significantly reduces worker mobility even in a boom market. This adds a pretty significant inefficiency to labor markets and has real impact on the the individuals who are constrained. The argument for home ownership has always seemed mostly based on the financial benefits of equity building. But home ownership only makes sense for that reason if the returns can at least match the return of those same funds in other markets and with comparable risk profiles.
ReplyDeleteA home-ownership policy also has significant impacts on urban planning, which in turn has important impacts on social justice and sustainability, as well as impacting economic efficiency and the cost of providing service at all levels of government.
Yes, I'm curious to see how ideas on home ownership change this century. Our economy is, in many ways, becoming more fluid as companies rearrange or people switch jobs. Because of this, the idea of home ownership has become much less static over the last couple decades. At the same time though, more and more people are working from home. As technology increases, it becomes easier to hold meetings and collaborate on projects, even when people are not face to face. This could allow some degree of permanency as people can collaborate across thousands of miles. This will certainly not apply to all jobs, but I'm curious to see how it affects our ideas on home ownership in the coming decades.
ReplyDeleteThat's pretty interesting. Well, I only have one thing to say about this. "Rational people think at the margin." (Mankiw)
ReplyDeleteI think this article asks two very important questions: Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway? It makes a great point why is homeownership a goal of politicians? Homeownership is for the individual to decide if they think they are ready for the responsibility of owning a home.
ReplyDeleteNot everyone wants to own his or her own home and not everyone should. In a perfect world everyone would have the complete “American Dream” with financial security and all the luxurious necessities. However this is not a perfect world and unfortunately we cannot apply a system of one fits all homeownership system. We tend to forget that our American Dream is not the same as everyone else’s. Sometimes it is more important to do what is right for the individual instead of what is right for you.
Homeownership is a large responsibility. For some people they are put at a great disadvantage by owning oppose to renting a home. Also, renting does not mean you do not have a stake in the future of the country. By contributing to society and affording to live with a roof over your head you are doing more for the country than by owning a home.
ET makes a really good point, many people are not in a position to or don't have a need/desire to become a homeowner.
ReplyDeleteI think home ownership is definitely not a necessity but rather a luxury. However provides the owner with many positive incentives to up keep both their home and its surrounding area.
ReplyDeleteI always just assumed that what we as Americans do is go to school, go to college, get a job, buy a house, etc. It's just the next thing to do on the timeline, but now that I'm questioning this, I can see both sides easily. I think a sense of permanency is good at some point in your life, but who says that has to take the form of a huge mortgage? (Oh, and a house...)
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