Bailout

Moving away from homeownership

By Felix Salmon

After I appeared on All Things Considered this weekend, I got an incredibly gratifying email from a listener in McLean, Virginia, who’s moving to Jupiter, Florida:

You were talking about the fact that taking your money out of one house and putting it into another means you’re still stuck in one place – just a different one – and trapped into an economic nightmare in which you work and work just to sustain a lifestyle you’ve faked yourself into because you now own a house. You’re so right, and something else that struck me was that I’ll never have cash to do the kinds of things I enjoy – travel, mostly… I  have always felt stifled by a mortgage, condo fees, taxes, and basically, that “stuck” feeling…

I am going to continue renting my little place by the beach down here for a while, and continue to keep my very nice Mclean condo rented out, so that mortgage is paid, and give a little more thought as to why owning a house is really anything more than a self-imposed prison of bricks and sticks!

It’s easy to glorify the wonders of homeownership because of all the psychological reasons for wanting it — the place to call one’s own, the nesting instinct, the desire for stability, the feeling that it’s silly to put lots of work and love into a place if it ultimately just ends up benefiting the landlord. But at the same time, the downside of homeownership can be truly enormous and devastating, and renting carries with it a very American sense of freedom, I think, and a world of opportunities.

Richard Florida likes to talk about how it will take decades to reshape the American psyche into something where renting an apartment in the city is considered even more desirable than owning a house in the suburbs. I’m hopeful that one consequence of the housing bust will be an increase in the number of nice suburban houses being rented out, like my correspondent’s in McLean. Which means that it might not be necessary to re-architect the national lifestyle to one which is much denser and more urban before we can start seeing renting becoming increasingly prevalent in white, middle-class neighborhoods. After the renters move in to the place in McLean and their neighbors start getting friendly with them, perhaps the stigma associated with renting might start to erode.

Full post as published by Macroprudential on February 22, 2011 (boomark / email).