American Nightmare. Randal O'Toole

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СКАЧАТЬ Homeowners have an incentive to maintain their homes (to protect their investment) and thus “have better physical home environments than renters.” Moreover, neighborhoods with high rates of homeownership tend to have more stable property values because people maintain their homes and yards. 3. Owner-occupied homes are better for children, who do significantly better in school than children living in rental homes. The difference is greatest for children of low-income families and is negligible for wealthy families. 4. Personal self-esteem rises considerably when renters become homeowners, which is probably one reason why the children of homeowners do better in school. 5. Homeowners have a greater stake in the future of their community and so are more likely to get involved in community programs, public affairs, and politics. As another survey notes, this benefit has been confirmed by numerous studies.⁵

      On the downside, Haurin notes that homeowners are less mobile than renters, making it more difficult for them to respond to changes in the employment market. However, as Chapter 14 will show, this lack of mobility is mainly a problem where government policies have made housing expensive. Unfortunately, the other downside is that one major effect of homeowners’ getting involved in politics is that they work to boost the values of their own homes—but by making housing expensive, they thereby reduce their own long-term mobility.

      Other researchers have found that homeownership can provide families a safety net during bad economic times. Nations with high homeownership rates tend to have lower levels of social spending, apparently because the homes act as a form of social insurance and provide a nest egg for emergencies and peoples’ retirements.⁶

      Naturally, some debate exists about whether homeownership truly does all these things. “There’s a pervasive problem in trying to sort out whether there is something intrinsic about homeownership that causes these externalities or whether the people that become homeowners are the kind of people that generate these externalities,” says Massachusetts Institute of Technology economist James Poterba.⁷ In other words, there may be a self-selection issue: people who are more likely to buy homes may also be more likely to save money, help their children do better in school, and get involved in the community. Haurin thinks his research on the effects of homeownership on children controlled for enough variables to show that homeownership itself was the cause of children’s scoring higher on standardized tests, but the economic literature is full of articles on both sides of the question.

      For example, Federal Reserve Bank economist Daniel Aaronson examined the issue in 1999 and concluded that at least “some of the homeownership effect [on child schooling] is driven by family characteristics associated with homeownership, especially residential stability.”⁸ This conclusion suggests that the children of those families would have done as well, or nearly as well, even if those particular families had rented their homes. But in 2001, New York University sociologist Dalton Conley used multigenerational data to show that homeownership makes a major difference to children in African-American homes. Homeownership, says Conley, “matters not only for the immediate well-being of families, but also for the life-chances of the subsequent generation.”⁹ Similarly, after reviewing a wide range of variables, policy analysts at Johns Hopkins University concluded in 2003 that “homeownership is beneficial to children’s outcomes in almost any neighborhood” and that “children of most low-income renters would be better served by programs that help their families become homeowners in their current neighborhoods instead of helping them move to better neighborhoods but remain renters.”¹⁰

      What is clear is that most of the benefits of homeownership mentioned by Haurin accrue to the homeowners and their families, not to society in general. This fact suggests that governments have little reason to subsidize homeownership except to the extent that they subsidize other programs, such as education or poverty reduction, that might be more cost-effectively achieved through homeownership programs. Haurin suggests, for example, that increasing homeownership can increase children’s test scores at a much lower cost than investing in the educational system.¹¹

      Haurin left out one major benefit of living in a society with high homeownership rates: a high level of economic growth. Peruvian economist Hernando de Soto believes that nations that make it easy to own homes grow more rapidly because homeowners can easily start small businesses by borrowing against the equity in their homes. “The single most important source of funds for new businesses in the United States,” de Soto notes, “is a mortgage on the entrepreneur’s house.”¹² This fact doesn’t necessarily mean governments should promote homeownership, but they shouldn’t stand in the way, as many governments of developing nations do by maintaining large areas of land in public or communal ownership.

      Homeownership also has a political component: Many believe that homeownership makes people more fiscally and socially conservative, suggesting that Republican or other conservative parties have an interest in boosting homeownership while Democratic or other liberal parties have an interest in boosting renting. “No one who owns his own house and lot can be a Communist,” said homebuilder William Levitt. “He has too much to do.”¹³

      In fact, the relationship between homeownership and social issues is probably imaginary. Researchers at the University of Louisville found no correlation between homeownership and attitudes toward civil rights, women’s rights, or gay rights.¹⁴ The relationship between homeownership and fiscal issues may be more realistic: European nations with high rates of homeownership tend to have much lower rates of social spending. However, it isn’t clear whether the high homeownership leads to lower social spending or the low social spending leads to high homeownership.¹⁵

      Homeownership and Property Rights

      Economists sometimes describe property rights as a “bundle of sticks.” One stick represents the right to use the property. Normally, property owners have this right unless they rent or lease the property to someone else, in which case the renter or leaser has this stick. Another stick is the right to sell the property. Although we normally take it for granted that someone who owns a house has the right to sell it, that hasn’t always been true. During some periods in the past, some nations have limited the rights of property owners to sell their land in order to keep most property in the hands of a small aristocracy.

      Ownership of all possible sticks in the property rights bundle is known as an allodial title. Since the government usually reserves to itself the right to tax, regulate, and take property through eminent domain, it is rare for anyone other than a government to hold an allodial title. However, in 1997 the Nevada legislature, which was apparently in a libertarian mood, allowed homeowners without a mortgage on their home to claim an allodial title to their house and land by paying a fee to the state equal to 5 percent of the value of their property. This fee would relieve them from ever paying property taxes on the home and would also protect their home from being taken by creditors or through eminent domain proceedings. If the owner sells the property or bequeaths it to an heir, the buyer or heir must again pay 5 percent to keep the allodial status. Nevada repealed the law in 2005 so it is likely that the number of Nevada properties that have allodial title is limited.¹⁶

      The combination of sticks that we call “homeownership” has evolved over a long period and is still—some would say unfortunately—evolving today. Landownership by anyone other than a chief or sovereign has been rare in human history. Most hunter-gatherer societies had no concept of landownership at all. Early agricultural societies were probably run by chiefs and, eventually, kings who held effective title to all land and granted its use to individuals in exchange for favors or support.

      Homeownership in Ancient Times

      Ancient Greece СКАЧАТЬ