Should gov't push owning a home? | Marketplace From American Public Media.
Here's the comment I attempted to post ... it was probably too long for their standards:
Here's the comment I attempted to post ... it was probably too long for their standards:
Perhaps one of the motives in trying to increase the homeownership rate was to raise the percentage of Americans who think they might get to share in the rising value of American land from 66% to 69%. That doesn't address the fact that 31%, as renters, were not sharing in that appreciation, or the more relevant point that appreciation is very uneven, and that in most of the heartland, there was relatively little appreciation.
Most of us have never learned in any class or any reading that houses depreciate, and that land appreciates for reasons which have nothing to do with the individual landholder. Where land represents a high share of the value of housing, as in Boston, NYC, San Francisco metros, rising land value far offsets the 1.5% annual depreciation of the house. Where land values are low, on the fringes, in the heartland, and the house represents, say, 75% of the value of the property, there may be little appreciation of the total property.
But not recognizing that, people jumped on the bandwagon, thinking that owning a home, with the magic of leverage, of supposed income tax benefits (which in reality flow only to a relative few who don't use the standard deduction), was somehow their key to riches. They didn't quite see how, but doesn't everyone know that homeowners have lots more wealth than renters? Wasn't that enough information on which to base a purchase decision, particularly with mortgage brokers and Realtors telling them to get in while they could, and everything would be okay with their mortgage and life would be good?
Most people's education in land economics is sadly lacking -- and that includes the economics graduates of most of our best colleges and universities.
Where do you start to get the real story? Henry George. Read more about his ideas, or take an online course at henrygeorge.org, or at a (bricks-and-mortar) Henry George School in NYC, SF, Chicago or Philadelphia. You'll gain new lenses to understand a lot of things which otherwise make no sense -- including why we have this boom-bust cycle, and how to change it!
Most of us have never learned in any class or any reading that houses depreciate, and that land appreciates for reasons which have nothing to do with the individual landholder. Where land represents a high share of the value of housing, as in Boston, NYC, San Francisco metros, rising land value far offsets the 1.5% annual depreciation of the house. Where land values are low, on the fringes, in the heartland, and the house represents, say, 75% of the value of the property, there may be little appreciation of the total property.
But not recognizing that, people jumped on the bandwagon, thinking that owning a home, with the magic of leverage, of supposed income tax benefits (which in reality flow only to a relative few who don't use the standard deduction), was somehow their key to riches. They didn't quite see how, but doesn't everyone know that homeowners have lots more wealth than renters? Wasn't that enough information on which to base a purchase decision, particularly with mortgage brokers and Realtors telling them to get in while they could, and everything would be okay with their mortgage and life would be good?
Most people's education in land economics is sadly lacking -- and that includes the economics graduates of most of our best colleges and universities.
Where do you start to get the real story? Henry George. Read more about his ideas, or take an online course at henrygeorge.org, or at a (bricks-and-mortar) Henry George School in NYC, SF, Chicago or Philadelphia. You'll gain new lenses to understand a lot of things which otherwise make no sense -- including why we have this boom-bust cycle, and how to change it!
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