Is Home Ownership a Good Thing? Part II

Less mobility also means roots ..
Less mobility also means community ..
Less mobility also means lifetime friendships ..
Less mobility also means watching cousins grow up as close as brother and sister ..
Less mobility: more emphasis on relationships than jobs.

Move all you want to, if your job is your priority. Have a shallow life. Don't even think about taking away my home, my family and my community. .. my choice is a rich life full with my family and friends!

Home ownership makes sense in as much as it can free you from rent; if you are able to pay off a mortgage in a reasonable amount of time, you can get to a point where you won't be paying the man forever and you can have more financial freedom.

This is a different question from whether there should be home ownership *per se*. Meaning, if a bank or landlord or whatever other entity (completely disconnected from the place, mind you) did not have the right to own land it was not using, the "need" to own your own land to free yourself financially from the above constraints would also not exist.

The social networks of many people today are, at least partially, online. People without such an online network often find it hard to understand.

As Jan (and the commenters in Part I) suggests, this is a tough call. Rental living can and should be more green, but in terms of reality, rarely is. Many people use their homes as the investment that will allow them to retire... giving up a significant investment like that is never easy, and can be financially disastrous. And of course, the benefits of owning your own home (such as a yard, more privacy, etc), and Jan's points about staying put, are hard to ignore.

On the other hand, lack of mobility often leads neighborhoods to become slums when jobs leave and people cannot follow the new jobs. And slums are rarely green.

Like so many other things in America, we've been participating in a living system that simply isn't sustainable, over time and with our growing populations. And the system is designed to make it harder to abandon, even in severe adversity. The result may well be a housing crash in America, unless we figure out a way to alter the American living system significantly, making it easier for homeowners to be more mobile if they need to be, without losing their shirts.

Fortunately, new technologies like telecommuting, and even new ways of building homes that are modular and mobile, might help. And I suspect we need some inventive new ways of financing homes that will allow more mobility, or at least ease the financial penalty when it is time to leave.

I agree entirely with Jan.

I'd also like to add that one of the consequences of people moving around is that they tend to congregate in places where there are like-minded people. (Reference a book called The Big Sort by Bill Bishop.) Which means that our horizons are shrunk, and we lose some of our ability to work with people who are different.

On the question of this article, I would say that there is no right answer for everyone. The right answer depends greatly on the circumstances of the particular person or people being considered. I have rented and owned at different stages of my life and both have worked for me in those times.

As Jan (and the commenters in Part I) suggests, this is a tough call. Rental living can and should be more green, but in terms of reality, rarely is. Many people use their homes as the investment that will allow them to retire... giving up a significant investment like that is never easy, and can be financially disastrous. And of course, the benefits of owning your own home (such as a yard, more privacy, etc), and Jan's points about staying put, are hard to ignore.

On the other hand, lack of mobility often leads neighborhoods to become slums when jobs leave and people cannot follow the new jobs. And slums are rarely green.

Like so many other things in America, we've been participating in a living system that simply isn't sustainable, over time and with our growing populations. And the system is designed to make it harder to abandon, even in severe adversity. The result may well be a housing crash in America, unless we figure out a way to alter the American living system significantly, making it easier for homeowners to be more mobile if they need to be, without losing their shirts.

Fortunately, new technologies like telecommuting, and even new ways of building homes that are modular and mobile, might help. And I suspect we need some inventive new ways of financing homes that will allow more mobility, or at least ease the financial penalty when it is time to leave.

I don't think the authors really thought this one through, this seems to be founded on the idea that all people are childless and have professional "white collar' jobs, and that experience is valued only at the industry-level, not the institutional or community ones.

For example, what about teachers? Teachers most certainly do *not* just bounce around the country from school to school, not good ones who care about a community, anyway.

Secondly, what about the effect on a family of moving constantly? What kid wants to leave their friends and school behind every few years?

Thirdly, this just makes no sense in light of the idea that we want people to move *back* to the cities so that they are closer to markets, public transportation, etc. Moving is a big deal and usually involves a lot of discarded items, ie, waste, not to mention the large trucks required to schlep furniture and so on from point A to point B.

Frankly, I take issue with the very premise this article is based on, that "The key argument for home ownership...is the best investment you will ever make."

NO, in fact the majority of lifelong city-dwellers have been repulsed by this concept, and the accompanying gentrification that usually has used it as a rallying cry for "out with the old, in with the new!" - for us a home is just that, a home. It's where you put down roots, it's where your neighbors and friends are, and to the green concept - it's close to work, schools, etc.

What on earth is gained for society by treating people as interchangeable parts in a machine? Someone specializing in green building permits in city A can't simply transfer that expertise to city B, I could just go on and on and on...

This society needs to seriously learn some patience, and how to not be so easily distracted by - and coveting of - the grass on the other side of the fence.

The difference between home ownership and renting is the difference between building equity and throwing a quarter to a half of your paycheck into a river every month.

If policy discussion moves in a direction away from home ownership, just be sure that it is compensated by promoting cooperative ownership strategies or very low-cost municipal housing options. Otherwise we're just opening the door to be exploited by landlords even more instead of banks. The Boss is the same even when he's wearing different colored hats.

If you are not forced into eternal debt slavery to attain a residence it is of course a good thing. Economically you don't want to be paying rent into someone else's pocket for your whole life. But a mortgage that reduces your life to some form of sad servitude is no better. Smaller house's, economical life styles, these can solve said problems. We need to stop thinking that we can live like kings and queens and just be happy making due with what we have. Living within our means is the absolute rule carved in stone.

Home Ownership also means making a long-term investment that pays off. While the recent mortgage travesty has gutted that value, it will remain true for a long time to come. Buy a house as soon as the bank will let you, and you will see its value grow and grow. If anything, the current housing prices facilitate that, since they have nowhere to go *but* up.

"Here, here!" to Jan's comment. Less mobility does indeed mean more community ties. But that should not necessarily exclude any ideas of alternative means of home ownership. If anything, people should be more open to more dense means of living, and challenge the one-home-to-one-lot norm.

@ Ernie,

I don't consider a house an "investment," unless by that you mean "something I can sell later for a profit," in which case it ceases to be a home, and becomes a commodity. I can think of several commodities off the top of my head which I would rather invest in: red wine; precious metals; arable land; a savings account.

I'd rather just buy my rented apartment. Property rights are more important to me than property values.

Ok, so you want everyone to live in a trailer home. Yeah, I really don't think that is going to fly. Home ownership is a good thing. It should be encouraged for nearly everyone. Stupid buying and flipping of homes for quick profit should be discouraged. Homes are LONG TERM investments. They should pay back in no less than 10-15 years. It's stupid people taking advantage of flaws in an economic system that caused the housing mess.

What has caused the financial mess is much deeper rooted desire in our culture to be a consumer and buy more than is sustainable economically and ecologically.

So we should become a nation of trailer parks? I see many problem with these arguments. First of all, removing ownership from the equation makes housing into even more of a disposable commodity, and I don't think we want to go down that path considering the amount of resources that would be required to replace the housing stock in an accelerated cycle. Arguing that greater mobility is required for jobs is a bit of a problem because many large employers relocate those jobs to "cheaper" (more impoverished) areas all the time in order to exploit lower wage expectations - greater mobility will mean the companies will move even faster, leading to more cyclical waste. This notion that less mobility will result in the best person not always being hired is a bogus argument, as many companies aren't looking for the best person, but the competent cheap person. Advocating for people to chase work means they'll have to keep chasing it perpetually, and taking a pay cut at every stop.

How many landlords care about your utility bills? How many landlords are willing to improve your home to be more sustainable when it eats into their bottom line? Until renters really push to the point where we see green places for rent around every corner, a green home currently almost needs to be owned.

The choice is not between remaining in the same place or moving your house with you wherever you go. This is where selling and renting come into play.

For most people, most of the time, it doesn't make sense to go to the expense and trouble of physically moving the entire house whenever you relocate. There's a good sustainability argument to be made for leaving most houses right where they are once they've been built. Besides, who wants to live in the same house all your life? And if you do, well, that's great too; go right ahead.

It would be nice if people could get beyond seeing their houses as an investment first. Our financial system has been arrayed to generally benefit home ownership. But as we see now, not all houses will increase in value relentlessly over time. And that's not necessarily the worst thing that could happen.

Houses are firstly about shelter. Then they are about psychological needs. Then they are about the day to day physical provision of the needs of life, and making the satisfying of those needs better and easier.

A good house in a good place should rise in value over the long haul. If you need or expect it to rise substantially in value over the short term, you've made the wrong investment. A lot of folks who are technically 'under water' will be fine if they hang on for a few more years and wait for the market to come back to them. Those who can't keep up with payments right now have big problems - but they may have other problems that are as significant as their mortgage.

If everyone lives in temporary housing, wouldn't that just perpetuate our disposable culture? Someone renting a house for a year or two isn't typically going to take care of it like a homeowner would; they won't care about home improvements or making things last.

This issue really hit some hot buttons! I kept coming back to it all afternoon .. normally, something like this is read and "filed" .. I'll be taking some time tonight to figure out why it affected me so .. perhaps it's the fact that I may be asked to move 150 miles away from my extended family in order to keep my job .. I work for a company that's growing and green-based, and importantly, expected to continue its strong growth even in today's economy. I thought I was resigned to the move, if it happens (so far it's hypothetical, but getting more probable all the time). My reaction to this "mobile society" concept tells me that I'm not so resigned. Now the decision .. what will win out? Can I compromise maintaining (or growing) my income with frequent trips home, or adjust my lifestyle and take a smaller-paying possibly not-stable job where I live?

This is not a new idea. It was allready tried in the former sovet union and the other soviet countries. I have experienced it and as interesting as the idea sounds at first, I can tell that there is not one person in the countless milions who still have to live in those "communities" who would not prefere a private home or anything else.

What on earth is gained for society by treating people as interchangeable parts in a machine?

Strongly agreed. We are more that just workers.

I think it would be a good idea if utility costs are somehow split between the owner and the user of a home. This way the home owner has an incentive to invest in insulation and other energy saving investments, and the user has an incentive to adapt his/her behaviour.

Will society benefit if all are mobile? We seem to forget that humans have always been mobile, as well as stationary. Building community ties in one area can be a great advantage for individuals, as already mentioned, but it has been shown to be good for society. Cities promote home ownership because it has been found to reduce various issues that we face (predominantly crime). Yet, we need the migratory to bring the best ideas to other parts of our globe; a spreading of culture. The question should be: Is Homeownership right for all? It has obviously been shown to be a good thing for some, but it is not right for others. We just need to develop appropriate means for living a good life for those who wish to own, and those who do not.

Owning vs renting all depends on where you live. HEre on long island where taxes are $10,000 -$13,000 a year for just a small 3 bed house

with that house still at $400,000 renting an app for $1250 a month ends up being cheaper.

Now if you live where its much cheaper then home owning is better but not here where I live.

Well done, Lloyd!

It's nice to find socially progressive thinkers who also understand macroeconomics.

Most of the criticism this article has garnered appears to be based on either misunderstanding what you've written or simply putting words in your figural mouth.

Lloyd correctly noted:
-Mobility is essential for economies to maximize their productivity and innovate. People are most productive when they are in roles that fully utilize their abilities.

-Home ownership - especially in a downturn - can significantly limit mobility, as Lloyd outlined.

What Lloyd DIDN'T write:
-That people are *required* to move, as in the USSR comment.

-That mobility means moving every couple of years. In the macroeconomic sense a few moves in a *lifetime* defines mobility.

-That families must be uprooted. Obviously, (or so I thought) no economist would suggest frequently moving a family with young children, and I don't believe Lloyd was suggesting that. Again mobility as judged by lifetimes, not years.

-Economic mobility means moving to the other end of the earth/country. Distance is immaterial to the economic discussion of mobility. Moving to a smaller house in the same neighborhood after the kids move out could qualify. Or moving to another part of the same city.

I'd also like to reiterate the rent v. own issue in terms of financial investment. Many people in the above comments seem to be under the false assumption that home ownership is almost always a good investment. I would suggest people use some online Rent v. Own calculators, particularly the calculators that require a substantial amount of input. It is a very complicated financial equation that depends on current and future property values, local rental market, property taxes, loan rates, and projected length of ownership. In many cases it makes make more sense to rent and invest the extra money you aren't paying to a mortgage in other investments. Even very conservative investments may be more profitable in the long run that home ownership, depending on the criteria listed above.

2 things not addressed:
1. If we are more mobile, then when a city makes a bad decision, businesses will migrate out faster. Okay, competition is good, but just remember - one bad move in NYC could give NJ an even bigger slice of the pie. Or, Heaven forbid, Chicago! Then, what would the rent/cost of that house/apt in Long Island be worth? Broader impacts are always important to consider. I'm not disagreeing, just making sure everyone knows what they're voting on.

2. "Homeownership" seems to imply some ranch house in the exurbs. Wouldn't all the treehuggers agree that a condo in the city, owned, and not rented, is a good thing? It can cost less, and be less environmentally problematic, and repurpose an old building, and, if one so chooses, they can be easily be owned in more than one city, so that "mobility" we are seeking is still available? Oh yeah, and they're usually not the size of McMansions. And the owner could STILL stop paying rent/mortgage after a period of time. That seems like a good answer for a lot of people. Especially when they realize their daily commutes into our cities will cost $50 a day. That might be $12,000 just in gas. Another $1800 in insurance. Another $2000 in maintenance. And, what a minute, what about that payment? $4800 for a modestly priced vehicle. So now, for one year, you can $20,000/year, or put that into the cost of a home/condo that appreciates, instead of burns up and depreciates. Oh yeah, and health costs go down because you drive less in the city. Man, once crime is fixed in the cities, why would anyone live anywhere else?

There are two (at least) ways to look at this situation. First (the one espoused by this article), the conflict between "stay" and "move" factors can be settled by removing inducements to stay in one place or impediments from moving. Why is the second option, valuing staying in one place, a less suitable option?
Perhaps we should be encouraging people to value relationships and the historical fabric of their communities, while learning to live in a more environmentally sound manner in their respective local geographies. Perhaps we should strive to place value in something other than a raise and a better entry on the resume.