Sunday, March 7, 2010
Robert Shiller (Yale--Economics) has an article in Sunday's New York Times Business section called Mom, Apple Pie and Mortgages. Shiller discusses the overpromotion of home ownership in the U.S. and its cultural foundations (something I'm working on as well). From the article:
FOR decades, the federal government has subsidized housing — particularly owner-occupied housing. This has been especially true during the continuing financial crisis, with Fannie Mae, Freddie Mac and the Federal Housing Administration propping up the housing market by issuing guarantees for investors on most new mortgages.
But what is the long-term justification for putting taxpayers on the line to subsidize homeownership? Is this nothing more than a sacred cow in American society — a political necessity because so many voters own homes and are mindful of their resale value?
Shiller continues on to discuss the nature of home ownership in American culture, and offers some suggestions:
If we choose to keep subsidizing individual homeownership, we must also commit to adding safeguards so that homeowners are less financially vulnerable. Of course, that will require some creative finance.
But first, we should rethink the idea of renting, which could be a viable option for many more Americans and needn’t endanger the traditional values of individual liberty and good citizenship.
It's a good read and a timely argument.
UPDATE: Ilya Somin has some thoughts on the article at the Volokh Conspiracy.