[I]t's worth asking whether we actually want to make it government policy to encourage ownership. Does it make economic sense for home buyers to be subsidized by renters? Is it wise? In recent years, as home prices marched ever-upwards, the idea behind home ownership changed a bit, and it was sold not only as the tangible manifestation of The American Dream, but as a solid, smart, investment decision. Buying a home, however, isn't like buying a stock. You don't live in a stock. You don't furnish a stock. You don't take pictures of your kids in a stock. And when you sell a stock, you're not homeless. All this makes a home a considerably less liquid purchase than a stock. And homes, as we've seen in the past few years, also go down in value. Yet we're still encouraging folks to buy them. Taxpayers are still shelling out tens of billions to make home ownership look like a better deal than it otherwise might. As Krugman says, U.S policy is based on the premise that everyone should be a homeowner. But what it means to be a homeowner has changed, largely in response to U.S policy. Maybe it's time the policies changed, too.I don't really have much to add to that. There are benefits to buying a home, and benefits to renting. Why should our government increase the benefits of buying? I can only think of two reasons:
1. People are dumb, and therefore rent when they should buy, or
2. There is some kind of positive externality (spillover) when a bunch of people own their own homes.
It doesn't seem obvious to me that either one of these is the case. If people are pretty good at deciding whether renting or buying is better, we shouldn't be trying to make that decision for them. And I can't think of any reason why I'd especially prefer to live in a society where 70% of the people had mortgages vs. one where 64% of people had mortgages.
0 comments:
Post a Comment