Do Hard-to-get Mortgages mean Better Cities?

sears catalog home photo

Sears Catalog Home

We previously wondered if home ownership was necessarily a good thing, quoting James Surowieki, Richard Florida and Matt Yglesias. Wendy Waters of All About Cities notes that with the disappearance of 40 year, 100% mortgages, it will not be so easy to buy a house, but notes:

If you are young (or not) and "trying on" jobs and careers, changing employers every year or two, home ownership restricts your options and may hold back economic development in a city.


-it limits your ability to relocate for a great opportunity. Trying on cities — as Richard Florida suggests in his recent book — might be as important to one's long term happiness as trying out jobs. Also, in this era of high gas prices, owning in an eastern suburb could limit one's ability to accept a job in a western suburb.
-it could prevent you from taking a lower paying position that might be particularly interesting or a wonderful learning opportunity.
-it could prevent you from returning to school, such as for an MBA, or a trade certificate or another diploma. Without ownership, you could move to a cheaper home.
-renting offers more cost certainty (in most cases). Costly repairs are the owner's responsibility.

She concludes:

It may be that city economies need a certain number of workers, particularly younger ones, able to change jobs easily. It's possible that in order to best hone their talents, and excel in their careers the average person may need to change jobs a certain number of times. If people are not free to find out what they enjoy and are best at, might that not bring down both the economy as well as the general happiness and human energy in a city?

Cities are, of course, more than sites of transient workers. They do need long term "community anchors" who own homes and contribute to neighborhoods and urban life.

Some people should own homes. But, historically, home ownership happened once people had settled into a career with one employer and had settled down with their life partner. Perhaps that should be the same way now.

If ownership typically required saving for a down payment and a solid recent employment history — as it historically has done — that might be best for cities and for the average person. ::All about cities

More on Buy vs Rent

Owning Your Own House Outright
Is Home Ownership a Good Thing?
5 Alternatives to the Buy vs Rent Question