A House is not Home
- Not Technology: Just Living
Australian Janet Albrechtsen chastises us yanks and our fixation on house ownership in a Wall Street Journal article titled Not Everyone Should Own a Home. In it she writes:
Maybe only a friendly foreigner could say this. But America needs to realize that not everyone can own a home. The American Dream of home ownership for all is a fraud. Politicians who pimped this dream created an unsustainable mortgage industry whose collapse is only surprising because it didn't happen earlier. America's mortgage industry will not recover, nor deserve to recover, unless it is prepared to challenge this politically unpalatable reality.
Why listen to an Australian like me? For starters, as our central banker, Glenn Stevens, said a few weeks back, Australian banks are "light years away from what's happening in other banking systems around the world." Australia's four major banks sit amongst the 20 AA rated banks around the globe. And as the Sept. 23 International Monetary Fund Country Report on Australia concluded, Australia's banking sector "is sound with stable profit, high capitalization and few non-performing loans."
Not knowing much about the Australian banking system, I can't say whether Albrechtsen and her assessment of the health of Australian banks is accurate, but I do believe she has a good point about home ownership in the US. It is ridiculous to continue equating home ownership with some nebulous "American dream".
I live in a rental townhome, and yes, I've thought about owning my own home for years—especially after a testy confrontation with a neighbor last week when he felt it was OK to play his guitar outside on his patio at 1 o'clock in the morning. But individual home ownership is not only economically nonviable, it's not environmentally sound. We can't keep tearing farmland up just to put in new subdivisions, or destroying habitat in order to support suburban sprawl. We also can't continue to bank our future income on selling mortgage-free homes, nor should we continue to tightly join economic health and "growth". Most importantly, though, we have to stop equating success with home ownership.
When I was in Boston, living in a rental was not unusual, nor were you judged and found not wanting if you didn't own your own place. After all, the lofts are outrageously priced, and individual homes are an increasing rarity in over crowded cities. The large apartment building we lived in was very well built. We didn't hear our neighbors, and we had a lovely view of the Boston Marathon every Spring. Best of all, one of the subways stopped right in front of our place, and we only had to take our car out a couple of times a month in order to do larger grocery shopping.
Our place was built in front of a small reservoir, which provided home for several geese and ducks, and a lovely place to walk every evening. In addition, a plot of land was deeded to the community and everyone could apply for their small patch of ground in order to grow fruits or vegetables.
Along our street, some of the buildings were condo, some were rental apartments, but you couldn't tell the two apart. Most importantly, those who owned condos didn't get first access to the subway, or a bigger plot in the community garden. The ducks didn't follow the condo owners more, in hopes of tidbits. The street didn't crack under the feet of the renters. It just didn't matter if you owned, or rented—only that you didn't play your guitar on your patio at 1 o' clock in the night.
This style of living is the way of the future, not only in the States, but for the world. We don't have to own a house to have a home. And we don't have to own anything to be successful.
Comments
Housing is related to population density. Not only to some malthusian dystopies but to space that is to be sprawled. Here in europe practically all land is in some form cultivated, farmed, used or possesed for a 1000 years. Most cities exist for the same period, building focal points of attraction. Suburbs exist, of course, but are much tighter arranged arround the cities. And the will to be nearer to downtown, the flat-based living isn't someting lesser.
The vast emptyness of the american continents can be interpreted as an advantage but also as a disadvantage.
I remember in College, in Yakima Washington which is next to a large and beautifully wild prairie, a class mate telling me that we don't have to curb our population, look around us, there's plenty of land ready for development.
Sounds like you lived in Brookline or Newton on Beacon up by BC. When my wife and I first met, she lived in Coolidge Corner just down the road from there. At the time, I lived in Cambridge.
Rents were expensive, but I was in no hurry to buy. I agree with you on the economics. My wife did want to buy, because the house would appreciate. Well, pity that now.
ps We never owned a home in Boston but do now in the ultra-depressed Michigan.
We lived right at the top of the Boston Marathon's Heartbreak Hill on Commonwealth, in Newton near BC. It was a wonderful place, but you're right, expensive. But everything was expensive in Boston.
I regret now that I didn't stay in Boston. I think the lifestyle suits me better.
Michigan -- see now that complements this post because home values have depreciated so badly in Michigan. Sorry about that, I hope the state recovers.
I often think we make decisions without any great forethought. We moved from Boston thinking we could go back. Indeed, we had opportunities but never felt they were right.
In retrospect, I realize I've always had an attitude of fighting the fight wherever I happened to be. We're happy enough in Michigan. Much like everyone else, we just wish the overall case were better. Perhaps we can make it so with time.
In the UK, in contrast to the rest of Europe, homeowning is widespread and desirable. I believe on the continent (as we say) rental is common. What I'm curious about though, is what you do on retirement. I view my house as an asset to be taken advantage of in retirement. It seems more secure than my pension fund, taking the long term view.
Home ownership as part of a retirement plan used to be valid in the US, but not so much anymore. Too often homes are priced higher than their worth when sold. Too often people have to take out second or even third mortgages, while still paying all of the costs of upkeep and repair.
My mother was able to use the equity in her home in Seattle to buy another home in a less costly community outright at her retirement, but I think what worked for her and others like her in that generation isn't going to work in future generations.
Plus, I really am becoming against single family dwellings. Habitat destruction is the number one cause of animal extinction.