American dream-renting

"Mainly, he said, that was because of a home’s appreciation, which gave people the opportunity for wealth creation that would otherwise have remained out of reach. Others mentioned additional societal benefits of homeownership, like stable neighborhoods. And homeowners had every incentive to keep their homes up, precisely because of the equity in their homes."

Absolutely true.

*****

"The academics I spoke to, however, were not so convinced that homeownership offered benefits to society that were so important they demanded federal subsidies. Especially since those subsidies were so huge, and so distorting to the economy. For instance, in 2009, according to the Congressional Budget Office, government subsidies for housing amounted to a staggering $230 billion."

This is a common liberal perception: that tax DEDUCTIONS -- or essentially, avoiding getting taxed up the ass -- is somehow a "subsidy." They think that YOUR earned income is already the government's and any attempt to try to keep TOO MUCH of it from being taken away from you is somehow the government GIVING you someone ELSE'S money.

It's precisely this kind of wrong-headed thinking that has led to a mass acquiescence of allowing the government to take roughly half of our earnings.

Not surprising, however, coming from ACADEMICS, who thrive on government grants -- you know, money out of YOUR pockets to pay for their own mental masturbation.

There are a number of myths about home ownership as being a desirable goal and worthy of the Federal government offering subsidies. Here are a number of problems.
1) Rent might be cheaper
2) Defaults are paid for by the tax payer
3) Home Ownership reduces labor mobility
4) Homes may not go up in value or other investments may go up more
5) Federal mortgage subsidies raise home prices making homes less affordable

Also think of the billions of dollars of lost money. All because institutions were pressured by Government and housing advocacy groups to lend money they otherwise were not inclined to make.

"1) Rent might be cheaper"

Perhaps in the short run, but NEVER in the long run.

"2) Defaults are paid for by the tax payer"

Perhaps, but defaults will happen whether you own or rent.

"3) Home Ownership reduces labor mobility"

We shouldn't be a society striving for "labor mobility" in the first place anyway. That's not condusive to a good quality of life.

"4) Homes may not go up in value or other investments may go up more"

Again, people confuse "investing" with owning a home. Comparing putting $2,000 a month away in another investment vehicle versus paying it towards a mortgage is stupid; you're not going to invest $2,000 in stocks INSTEAD of a mortgage because you still need some place to live! Compare mortgage money with rent money if you will, but comparing it to other investments is comparing apples with oranges.

"5) Federal mortgage subsidies raise home prices making homes less affordable"

Again, what is a "mortgage subsidy"? Not getting taxed is not the same thing as a "subsidy"; it's money that wasn't the government's in the first place.

And the final proof. Before Bill Clinton home ownership rate was roughly 63%. To get it up to 69% essentially destroyed our Economy, Sapping home owners of any equity, putting into bankruptcy many of the nations top Financial institutions, massive overbuilding, and sapping the stock market and saddling our states and municipalities and pensions with massive debts

If the government provides for no-down payment mortgages and assumes the credit risk, then that's a subsidy.
if the government permits you to reduce your taxes by purchasing a home that's a subsidy
if the government provides for a lower rate of interest for a home purchase that's a subsidy(lost income opportunity)

"“Sustainable homeownership is a worthy national goal. But it should not be pursued to excess when there are other, equally worthy solutions that help meet the needs of people for whom homeownership may not be the right answer.”

"Gary Rivlin, my former colleague at The New York Times, has just published a scathing, important book, “Broke, USA,” which includes one shocking anecdote after another of people being conned into taking on mortgages, filled with hidden fees and adjustable rates, that they couldn’t possibly afford."

*****

There's no denying that home ownership is not appropriate for everyone. But to assert that it's not right for ANYONE in the lower socio-economic stratus by pointing out that this group has been disproportionately targeted by unscrupulous lenders is shameful and elitist.

Punish the banks, by all means, for these practices. But to assert that homeownership is appropriate only for the middle class and above is wrong; as long as people are buying within their means, however little they may be, there's no reason they can't own their own homes.

But to assert that home ownership is appropriate only for the middle class and above is wrong; as long as people are buying within their means

Agreed, just without subsidies.

"If the government provides for no-down payment mortgages and assumes the credit risk, then that's a subsidy."

No one said the government should be in the lending business anyway.

***

"if the government permits you to reduce your taxes by purchasing a home that's a subsidy."

No it's not. It's simply being able to keep more of your OWN money. And ANYONE with enough responsibility to buy their own home can take advantage.

***

"if the government provides for a lower rate of interest for a home purchase that's a subsidy(lost income opportunity)"

Again, the government shouldn't be in the lending business anyway.

"Agreed, just without subsidies."

I never argued for "subsidies."

Keeping more of your own money, however, is not a "subsidy."

Matt,
If the government eliminated mortgage interest deduction tax receipts would go up. Furthermore we need
to finance less of the deficit with Treasury debt mainly bough by the Chinese and other non-debtor nations.
The servicing of that debt is paid for by those that pay taxes. Therefore the deduction of mortgage debt shifts
the burden away from home buyers toward others and is a subsidy.

"If the government eliminated mortgage interest deduction tax receipts would go up."

Gee, so would raising the income tax rate across the board to 75%. So would taxing all food items and everything else that currently isn't taxed.

But at some point, we have to stop this taxing hysteria and put the government on a DIET.

I still argue that our politicians are either terrible negotiators or not acting in the public interest by continuing to support new labor contracts that provide for pay + benefits a larger amount of money than is required or would be negotiated for in the private sector. We already have a tiered system of benefits, our leaders need to take this a step further. And perhaps a bankruptcy of NY is in order so that existing contracts might bet resolved in a way that benefits everyone. The unions have to realize that solvency of the system is in their interest. Promises that cannot be met do not serve union retirees.

"I still argue that our politicians are either terrible negotiators or not acting in the public interest by continuing to support new labor contracts that provide for pay + benefits a larger amount of money than is required or would be negotiated for in the private sector."

Show me some comparisons.

Is there an equivalent private-sector subway system out there? Are there equivalent police officers and firefighters out there?

If there are, please, by all means, show me THEIR compensation packages.

Otherwise, you have absolutely no proof that any of these civil servants would otherwise be paid less in the private sector.

So Riversider is outraged at "subsidies" for homeowners, but not a single shred of outrage over subsidies for multi billion dollar corporations.

Can someone please show me an example of a govt. employee makign more than a private sector employee with the SAME job title? Last time I checked, Big Law associates are aking fare more than assistant DAs/ public defenders. Public university professors make less than private university ones.

factoring in pensions and benefits
office workers make more in the public sector
subway token clerks more than mcdonald's worker
brownie handing out parking tickets more than private security worker

It's not the pay but the health and retirement benefits.

So Riversider is outraged at "subsidies" for homeowners, but not a single shred of outrage over subsidies for multi billion dollar corporations.

Nope , against those too

2484 open houses!!!!!

Riversider ----- keep your sweet ass off the highway system. And don't fly --- you'll be using air traffic control (paid for by government). Come on, don't be a leech on society!