Wednesday, September 7, 2011
Glaeser on Rethinking the Federal Bias Toward Homeownership
Harvard economist Edward Glaeser--author of much fascinating work on land use and urban development, including his latest book, Triumph of the City-- has posted his latest article, Rethinking the Federal Bias Toward Homeownership, forthcoming in HUD's Cityscape: A Journal of Policy Development and Research, Vol. 13, No. 2 (2011). The abstract:
The most fundamental fact about rental housing in the United States is that rental units are overwhelmingly in multifamily structures. This fact surely reflects the agency problems associated with renting single-family dwellings, and it should influence all discussions of rental housing policy. Policies that encourage homeowning are implicitly encouraging people to move away from higher density living; policies that discourage renting are implicitly discouraging multifamily buildings. Two major distortions shape the rental housing market, both of which are created by the public sector. Federal pro-homeownership policies, such as the home mortgage interest deduction, weaken the rental market and the cities where rental markets thrive. Local policies that discourage tall buildings likewise ensure that Americans have fewer rental options. The economic vitality of cities and the environmental consequences of large suburban homes with long commutes both support arguments for reducing these distortions.
A very important argument; I'm looking forward to reading the whole thing.