Monday, Aug 23, 2010
Original title is just fine
Real Clear Politics: The Homeownership Fetish
So this article is about the US but a lot of the points still apply. "We let a sensible goal become a foolish fetish. Not everyone can become a homeowner. Some are too young and footloose; some are too old and dependent; some are too poor or irresponsible. Some don't want a home. Even with these gaps, homeownership is virtually universal among the middle-aged middle class: almost three-quarters of Americans aged 45 to 54 and four-fifths aged 55 to 64."
Posted by mnorman @ 11:24 AM (825 views) Add Comment
16 Comments
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1. mark wadsworth said...
The "homeownership fetish" is just operational cover for Home-Owner-Ism, which can only function if more and more people are chasing a fixed amount of land. The number of houses is neither here nor there - if we have more houses, the purchase price for one house goes down but the total rental value of land goes up. But the hardcore Home-Owner-Ist NIMBYs like restricting supply as well, out of spite, as much as anything.
It's a pyramid scheme, don't forget.
So once the 60% who can easily afford it and for whom homeownership is appropriate are 'on the ladder', they have to get more and more marginal people to buy into the dream/nightmare, so that house and land prices go up and so that bankers can become richer and richer.
All things considered, having more social housing for the bottom 30% or even 40% is a much better deal all round (and yes, there are a lot of things that is wrong with council housing, like the ridiculous waiting lists, the queue jumping by certain sub-groups, the idea of 'subsidised tenancies for life', the huge amount of sub-letting that goes on and so on, that's just details).
2. str 2007 said...
Well, so long as people retire less money than they used to earn I see home ownership as essential to all, otherwise how would one pay private rent in retirement ?
Also consider that to retire on a gross wage of £15k (about half to two thirds of the average wage) one would need a pension pot of £3-400k.
Now consider alot of ftb's can't raise a deposit and alot in their forties have been spending more than they've been earning over the last 10 years via Mewing then the extent of the overall problem becomes clearer
So surely it's cheaper all round for everyone to own so accomodation doesn't need subsidising in retirement.
3. mark wadsworth said...
STR: "surely it's cheaper all round for everyone to own so accomodation doesn't need subsidising in retirement."
Of course it is better if people are self-reliant and so on, but bearing in mind that land ownership is a massive implicit or explicit subsidy to land ownership and/or that land ownership is merely privatised tax collection, that's not really an argument (it's Home-Owner-Ist proapganda). Even the most rabid land value taxer agrees that pensioners would get higher pensions or discounts or deferment option or something (call that a subsidy if you will, but it's a far smaller subsidy to land ownership than at present).
Alternatively, what cost does a pensioner in social housing impose on society? Next to nothing, is the answer. And if there are too many people on the waiting list, then build some more.
4. braindeed said...
MW @1 said...
the idea of 'subsidised tenancies for life', the huge amount of sub-letting that goes on and so on, that's just details).
Now let me see....
You are enraged by the notion of Home-ownerists being lucky enough to be in affordable houses by dint of having bought before you, and yet you subscribe to the idea that 'social housing' tenants should be made to pay a non-subsidised rent....ie 'Market' rate - a way of supporting the over inflated prices and the BTL scam that bellowed air into the balloon.
I assume that your rage is because you can't get on the ladder (whatever the reason)....you should examine cause and effect - council tenants are the least responsible for this mess - your desire to buy, is based on the common sense idea that ownership means a more comfortable old age. .....putting the boot in on the poorest is just plain mean. You want a secure home, with manageable outgoings and a cut off point at some time - but you want the dustman to take a kicking....wannabe home-ownerist, if you ask me.
5. mark wadsworth said...
I'm the least enraged person you can imagine. I've no grudge against social tenants or pensioners or homeowners or people in general. If they built more social housing, then the 'market rent' would fall considerably and so it wouldn't appear to be subsidised (they aren't actually subsidised anyway, by and large).
And I could get on the ladder tomorrow for cash if I wanted, as it happens.
It might help if you read what I said rather than jump to conclusions. I covered the point about "a cut off point at some time", did I not?
6. drewster said...
braindeed,
I'm not a big fan of council housing either. We don't build special supermarkets for the poor to shop in; we just give them the money and let them choose where to shop. So I don't see why housing should be different.
BUT Mark Wadsworth is correct in one way. If several million new council homes were built, "market" rents would fall significantly because private landlords would have to compete with council rents. That seems like a good plan to me.
7. alan_540 said...
Mark, we know braindead's an angry little socialist who gets upset at the drop of a hat - he's probably still sulking that GB has been chucked out of No.10.
8. braindeed said...
5. mark wadsworth said...
I've no grudge against social tenants or pensioners
or homeowners
Oh yes?....so what about "there are a lot of things that is wrong with council housing" like "the idea of 'subsidised tenancies for life"
Your continued rant agaist so called home-ownerists, is poorly argued at best, delusional at worst.
How can I read something, without reaching a conclusion, anyway?
9. braindeed said...
7. alan_540 said...
'we know braindead's an angry little socialist who gets upset at the drop of a hat'
Explain 'we' and 'socialist', if you can
10. braindeed said...
6. drewster said...
'I don't see why housing should be different'
....but , you see, I do.....simple
11. str 2007 said...
I'm obviously being a bit thick, but can someone explain to me why we have to subsidise any sort of housing, when it's the local authority that add value to land (over agricultural rates) when they grant planning permission ?
A nice house can be built for £100 k plus say a £20k - £50 k contribution to services and access.
A repayment mortgage for £150 k would cost about £750 per month.
The above example would cover the cost of a 4 bed detached house with the monthly cost similar to renting a 2 bed flat.
Surely this must be a better option.
12. mark wadsworth said...
Braindeed, it's not good enough just to think about the people in council housing, the people I worry about are on the council house waiting lists. I do object to private illegal subletting at market rates (which arises because of below market rents for life) because that hurts the people on the waiting list. If in doubt, I will always stick up for the little guy.
AFAICS, all these economic -isms are as bad as each other - fascism, socialism, corporatism, statism, Home-Owner-Ism. They all benefit the few at the expense of the many. Feel free to dismiss this as ranting, but it's not, it's about economics and facts and logic.
13. mark wadsworth said...
STR, you are forgetting the worst aspect of Home-Owner-Ism, i.e. NIMBYism.
Of course most people would be able to afford to build a nice house (for a lot cheaper than £100k) and, if income tax etc were reduced or scrapped, to pay the Land Value Tax (which would of necessity cover the cost of utilities etc). But that's not what the Home-Owner-Ists want, is it? They want housing to be nigh unaffordable to newcomers (but as cheap as possible for incumbents, so forget about LVT), so then the government has to build social housing to alleviate the worst symptoms.
14. Taffy62 said...
Mark,
I'm a newbie, but just reading this short dialogue. I have some empathy for you. I'm supposing from the comment "land ownership is a massive implicit or explicit subsidy to land ownership" you have attained some measure of enlightenment. If you do want to further an ideal, you will always get a hard time from people like the aptly named braindead. They don't have a clear understanding of the bigger picture. Neither do they comprehend the fundamental flaws and social unfairness of the land ownership system.
Think of a mouse in a maze. The mice can only remember where they have been, and can see as far ahead as the next corner. If you want widespread acceptance of ideas among mice. You must describe the end point. Then you have to explain the various twists and turns ahead, with all the dead ends. A big a task if wanting to reform land ownership.
This is why career politicians package things in bite size chunks of cheese for the heaving masses. They don't bother to push things. "Too hard to explain". If I have judged your character correctly after a brief reading, good luck and keep going!
Hope you don't find my comments too presumptuous for a newbie.
15. str 2007 said...
Mw
Yes I guess those that would benefit most understand the maths behind it least.
I got another 'still waiting for the housing Market to crash - ho ho ho' at a weekend social gathering - let's hope this current tipping point continues.
16. braindeed said...
Taffey Duck @ 14 said...
They don't have a clear understanding of the bigger picture. Neither do they comprehend the fundamental flaws and social unfairness of the land ownership system, like me and you, oh towering intellect.
Hope you don't find my comments too presumptuous for a newbie.....slurp slurp - don't worry newboy, he'll love it
aw diddums......*titter*