Remember the Ownership Society? Yeah. That worked. Politicians have for the past generation peddled homeownership as a panacea to various social ills, but the foreclosure epidemic underscores what skeptical researchers have been pointing to all along: that efforts to get people to buy houses have cured nothing. And too often, ownership exposes already-vulnerable families to financial turmoil. In the devastating aftermath of years of free-market evangelism by conservatives the collapse of the subprime house of cards could finally force policymakers to rethink ownership as a social project. A recent policy paper by the Center for Economic and Policy Research proposes a plan to let homeowners convert to renters. CEPR argues that the “right to rent” system would allow individual households to stabilize and remain within their communities, and would mitigate the strain in the housing market. On balance, in many cases, renting, rather than owning could save households a big chunk of change each month. Economist Dean Baker says the policy–
would give homeowners an important degree of security, since they could not simply be thrown out on the streets. If they like their house, their neighborhood, and the schools for their kids, they need not have their lives severely disrupted by foreclosure. This policy should also benefit neighborhoods in the most hard-hit areas, since they would not have large numbers of vacant homes following foreclosures.
In working-class communities of color—which have been especially burdened by unsustainable housing costs and predatory lending—holding the community fabric intact is critical for rebuilding in the face of both the foreclosure crisis and longstanding structural discrimination. As explained in a new Pew Center study, concentrated poverty has undermined the prospects of children growing up in marginalized Black communities. Yet, despite studies tying homeownership to better quality of life, ownership isn’t necessarily the key to upward mobility. Johns Hopkins University researchers found that when it comes to the miracle of homeownership, correlation is not causation:
homeownership, in itself, does not have a causal effect on children’s outcomes. It may be that homeownership serves as a kind of litmus test for whites, filtering out the minority of families with low-achieving children. For blacks, who confront greater hurdles in attaining homeownership, housing tenure does not appear to serve this function.
Besides, the burden of an unaffordable home could end up tethering households to economically disadvantaged communities. An earlier study by Harvard’s Joint Center for Housing Studies cautioned:
actions taken to promote neighborhood stability through increasing homeownership may be at the cost of individual mobility. The decreased mobility associated with homeownership among individuals and households living in distressed neighborhoods may perpetuate the kinds of social problems associated with these environments… Segregation and isolation stunt the ability of neighborhood residents to improve neighborhood social characteristics, such as levels of employment and the number of families on public assistance, as well as physical characteristics like the number of dilapidated houses or the median value of homes.
A home of one’s own still a worthy goal, but the blind promotion of ownership backfires when it leaves millions of people owning something they can’t afford. Affordable housing advocates say that the crisis is not an ownership deficit, but the government’s abandonment of its responsibility to create housing opportunity for renters as well as owners. The recession stemmed in large part from a mentality that equates personal worth and community wealth with real estate assets. A more equitable housing policy would get off the ownership obsession and focus on building real social goods. Image: Joel Sherffius / Bend Weekly