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Encouraging buying instead of lending discourages a flexible labor market. Basically the government, with the mortgage tax break, is lining the pockets of devel

Encouraging buying instead of lending discourages a flexible labor market. Basically the government, with the mortgage tax break, is lining the pockets of developers and home builders, and making it difficult or expensive for families to move where there is a higher paying job or even better school district.

axod 17y ago
I think home ownership is a good aspiration to have. Just like 'working for yourself' is something a lot of people would like to achieve, 'owning your own home' features on the list. It's also good for society, giving people more of an incentive to look after their home, their surroundings and to take an active part in society. As well as removing some of the separation of society - land owners, and renters. Being less likely to move around has its good points as well as bad.
yummyfajitas 17y ago
It also encourages boring lives. I recently had occasion to talk with several homeowners. My plans over the next year? Move to Kerala, learn Kalaripayattu and work on my startup. Several renters had similarly interesting plans. Every single homeowner (or homeborrower) had plans to remodel some room of their house. I'm firmly convinced that a home is nothing more than a ball and chain. [edit: changed 'similar plans' to 'similarly interesting plans'. A reply to this post made me realize it was unclear.]
- tptacek 17y ago
  That's nice, because I'm sure if you talk to 100 renters, most of them also want to move to Asia and start companies. Sheesh.
  - maukdaddy 17y ago
    I'm a renter and I hit at least one of those points ;) Moving to Asia - not so much!
  - yummyfajitas 17y ago
    One had plans to move to north dakota, play guitar and learn to shoot. One planned to follow his job to wherever. Overall, the plans of renters were simply more interesting than those of owners. Orthogonality is good. If your investments are tightly coupled to your lifestyle, you will have less freedom.
- jganetsk 17y ago
  How is learning an ancient form of South Indian martial arts at all relevant to the discussion?
  - mistermann 17y ago
    You'll understand after you learn it.
- msluyter 17y ago
  To be fair, despite owning a home, if I really wanted to pack up and move to Asia I could do it. I'd just have sell first and thus do it a few months after you. I'm also pretty sure that a spouse/kids would be much more of an impediment to that move than owning a house.
  - euroclydon 17y ago
    I live very near to RTP, NC, and only one home has sold in the past six months, so good luck.
tptacek 17y ago
It also encourages nicer neighborhoods, because homeowners are better incented to bond with their neighbors, and the condition of their property isn't an externality to them.
- natrius 17y ago
  It would be cheaper for the government to throw weekly block parties nationwide than subsidize homeownership to the extent it currently does. (I haven't done the math on that, but you get the point.) Government policies that try to achieve a certain effect via indirect means have all sorts of undesirable side effects. If we want to improve neighborhood cohesion, we should find a more direct way of doing that.
  - natrius 17y ago
    Actually, I have a better idea. Landlords within a neighborhood should band together and give their tenants a share of the appreciation of the property above inflation. Rents would probably have to rise to accommodate this. They should do it as a group because it's far easier to judge the appreciation of a neighborhood compared to a single property that isn't being sold. Once renters have an stake in the quality of the neighborhood, they should act more like owners.
- ahoyhere 17y ago
  ... in theory. But not in fact. Nooooo way. You clearly have never been part of a homeowner's association, condo association, or property dispute.
  - tptacek 17y ago
    I rented for 12 years and then bought twice. I've never had a landlord that I would trust with the best interests of my neighborhood. Also, I'm sure you can dredge up a whole lot of "approved exterior paint color" drama from homeowners associations, but I'm not as confident you'll find a lot of examples of negligence. Which is what we're talking about.
twopoint718 17y ago
That could very well be the case: http://www.economist.com/finance/displayStory.cfm?story_id=13491933 http://www.economist.com/finance/displayStory.cfm?story_id=1... "Whether stability is such a good thing in a downturn, though, is a different matter. A decade ago Andrew Oswald of Warwick University argued that owning your own home makes you more reluctant to move, so labour markets tend to become more rigid as home ownership increases. He claimed that increases in the level of home ownership (though not necessarily the level itself) are associated with rises in unemployment. Ireland, Greece and Spain all saw large increases in home ownership in the 1980s and 1990s, and had relatively high unemployment. America and Switzerland had stable ownership rates, and escaped the long-term rise in joblessness."

axod 17y ago

I think home ownership is a good aspiration to have. Just like 'working for yourself' is something a lot of people would like to achieve, 'owning your own home' features on the list. It's also good for society, giving people more of an incentive to look after their home, their surroundings and to take an active part in society. As well as removing some of the separation of society - land owners, and renters. Being less likely to move around has its good points as well as bad.

yummyfajitas 17y ago

It also encourages boring lives. I recently had occasion to talk with several homeowners. My plans over the next year? Move to Kerala, learn Kalaripayattu and work on my startup. Several renters had similarly interesting plans. Every single homeowner (or homeborrower) had plans to remodel some room of their house. I'm firmly convinced that a home is nothing more than a ball and chain. [edit: changed 'similar plans' to 'similarly interesting plans'. A reply to this post made me realize it was unclear.]

tptacek 17y ago
That's nice, because I'm sure if you talk to 100 renters, most of them also want to move to Asia and start companies. Sheesh.
- maukdaddy 17y ago
  I'm a renter and I hit at least one of those points ;) Moving to Asia - not so much!
- yummyfajitas 17y ago
  One had plans to move to north dakota, play guitar and learn to shoot. One planned to follow his job to wherever. Overall, the plans of renters were simply more interesting than those of owners. Orthogonality is good. If your investments are tightly coupled to your lifestyle, you will have less freedom.
jganetsk 17y ago
How is learning an ancient form of South Indian martial arts at all relevant to the discussion?
- mistermann 17y ago
  You'll understand after you learn it.
msluyter 17y ago
To be fair, despite owning a home, if I really wanted to pack up and move to Asia I could do it. I'd just have sell first and thus do it a few months after you. I'm also pretty sure that a spouse/kids would be much more of an impediment to that move than owning a house.
- euroclydon 17y ago
  I live very near to RTP, NC, and only one home has sold in the past six months, so good luck.

tptacek 17y ago

It also encourages nicer neighborhoods, because homeowners are better incented to bond with their neighbors, and the condition of their property isn't an externality to them.

natrius 17y ago
It would be cheaper for the government to throw weekly block parties nationwide than subsidize homeownership to the extent it currently does. (I haven't done the math on that, but you get the point.) Government policies that try to achieve a certain effect via indirect means have all sorts of undesirable side effects. If we want to improve neighborhood cohesion, we should find a more direct way of doing that.
- natrius 17y ago
  Actually, I have a better idea. Landlords within a neighborhood should band together and give their tenants a share of the appreciation of the property above inflation. Rents would probably have to rise to accommodate this. They should do it as a group because it's far easier to judge the appreciation of a neighborhood compared to a single property that isn't being sold. Once renters have an stake in the quality of the neighborhood, they should act more like owners.
ahoyhere 17y ago
... in theory. But not in fact. Nooooo way. You clearly have never been part of a homeowner's association, condo association, or property dispute.
- tptacek 17y ago
  I rented for 12 years and then bought twice. I've never had a landlord that I would trust with the best interests of my neighborhood. Also, I'm sure you can dredge up a whole lot of "approved exterior paint color" drama from homeowners associations, but I'm not as confident you'll find a lot of examples of negligence. Which is what we're talking about.

twopoint718 17y ago

That could very well be the case: http://www.economist.com/finance/displayStory.cfm?story_id=13491933 http://www.economist.com/finance/displayStory.cfm?story_id=1... "Whether stability is such a good thing in a downturn, though, is a different matter. A decade ago Andrew Oswald of Warwick University argued that owning your own home makes you more reluctant to move, so labour markets tend to become more rigid as home ownership increases. He claimed that increases in the level of home ownership (though not necessarily the level itself) are associated with rises in unemployment. Ireland, Greece and Spain all saw large increases in home ownership in the 1980s and 1990s, and had relatively high unemployment. America and Switzerland had stable ownership rates, and escaped the long-term rise in joblessness."