Check out the very interesting interview between Scott Simon and Canadian professor and author Richard Florida this morning about the role of home ownership in the US economy in recent history and the possible return of renting as the most economically advantageous mode of housing tenure in the future. As Scott points owning a home has been held out not only as the epitome of the "American dream", but also a social policy that leads to positive social outcomes like more personal responsibility and connection to neighborhoods. That policy, fueled since the New Deal by the mortgage interest tax deduction, and in recent years by policy choices of the Fed and possibly Fannie and Freddie, now lies at the heart of the economic crises we are facing. Should President Obama commit his bailout to trying to restore that policy?
Richard Florida offers a compelling story about why Obama should consider strategies that will allow renting to replace home ownership for many of the present victims of the mortgage crisis. According to Florida, renting is a better fit with the careers of young adults, careers that routinely require rapid relocations to different cities and which offer the best lifestyles to those who can live very close to where they work. Home ownership may have fit the mid-20th century with its single worker, lifetime career model families, but today's young workers are better off being able to move easily and to find attractive housing closer to where they work.
This rental approach, which would benefit from a significant rethinking of current government policies, offers some very attractive gains on the environment and energy use, assuming that more rental housing will be in higher density formations in close proximity to public transportation. It would also help reduce our commitment to governing through crime and the resulting culture of fear and control. As Scott Simon pointed out, we treat home ownership as a kind of crime reduction strategy because it is supposed to make people more personally responsible and more committed to their communities. Richard Florida notes that a recent empirical study fails to find significant differences in major parameters of well being (both individual and community) between home owners and renters. Notice that our policies preferring home ownership have helped stigmatize rental properties and people who rent as associated with higher crime risk (a self fulfilling prophesy depresses many urban neighborhoods). Moreover home ownership tends to make people more fearful and sensitive about crime in their community. As David Garland suggests in his book, The Culture of Control, suburbs left empty by two career families produce a sense of looming menace to their residents. Higher density apartment neighborhoods close to public transportation, offices, and shopping, will rarely appear empty and menacing.
Home ownership also inculcates crime fear by producing a subject inherently concerned about the risk of future declines in property values. While the renter will be mainly concerned by actual threats of crime to themselves or their family, the home owner is necessarily more concerned about rumors of crime and their impact on housing prices.
Richard Florida suggests that great depressions produce fundamental shifts in the geography of the economy. The long boom following the New Deal was built around home ownership. Ironically it helped generate the regime of governing through crime which helped shatter the political force of the New Deal (which might have been able to hold the housing bubble in greater check). In its collapse, Florida suggests, we should look for the opportunity to facilitate a new geography of capitalism. Fear of crime, now the major product of the governing through crime regime, will remain one of the strongest obstacles to convincing Americans to embrace this new geography (see the post below).