Sunday, April 01, 2012

A "Rentership Society" sounds like a good society

To the Point asks "Is the US becoming a 'Rentership' Society?" as the home ownership rate plummets in the last six years.  I don't see a problem with it.

In the olde times of 15-20 years ago, the ubiquitous 30 year fixed rate mortgage with limited refinancing operated as a useful nudge for increasing the savings rate, but those days are gone.  It now doesn't make that much sense for middle class people to tie up such a large portion of their limited assets in a risky investment.  The few poorer people who could buy, should invest instead in either something safer or something more liquid in case something happens to them like a medical emergency.  Homeowner sale costs also limit job mobility.

Renters are probably somewhat less interested in making community improvements, but they can provide incentives for the same by voting with their feet.  More acceptance of renting can also facilitate more dense housing that works well with renting.  If only we eliminated or greatly reduced the mortgage tax deduction then we'd do a ton to fight sprawl, but that's a dream.

What's apparently not a dream is trend of people moving back from the worst of the exurban sprawl in the US.  That's good, although some of the urban counties they describe that I happen to know - Alameda and Contra Costa - can have plenty of people living pretty far away from the Bay Area's urban core.

A Randian zealot, Alan Greenspan, is partially responsible for the US and global financial meltdown because he openly manipulated the housing market to support his political ideology.  Less manipulation in a rentership society sounds like a better choice.

(FWIW, my wife and I own a townhouse in a 30 unit association.  It's fine, but I can also see us renting.)