I’ve always thought Richard Florida was one pound of good ideas in a five pound bag, able to provide fodder for a lively civic discussion but mostly a lot of empty space. The whole Cool Cities thing, which Florida milked like it was the last cow on earth, only the cow actually dispensed liquid gold, and it sort of did — got a lot of people talking (a good thing), but otherwise meh.
So it was with a less than enthusiastic attitude that I read his thoughts in the Atlantic Monthly on “How the Crash Will Reshape America,” and found he’s still not impressing me all that much. And then I got to this passage:
So how do we move past the bubble, the crash, and an aging, obsolescent model of economic life? What’s the right spatial fix for the economy today, and how do we achieve it? The solution begins with the removal of homeownership from its long-privileged place at the center of the U.S. economy. Substantial incentives for homeownership (from tax breaks to artificially low mortgage-interest rates) distort demand, encouraging people to buy bigger houses than they otherwise would. That means less spending on medical technology, or software, or alternative energy—the sectors and products that could drive U.S. growth and exports in the coming years. Artificial demand for bigger houses also skews residential patterns, leading to excessive low-density suburban growth. The measures that prop up this demand should be eliminated.
If anything, our government policies should encourage renting, not buying. Homeownership occupies a central place in the American Dream primarily because decades of policy have put it there. A recent study by Grace Wong, an economist at the Wharton School of Business, shows that, controlling for income and demographics, homeowners are no happier than renters, nor do they report lower levels of stress or higher levels of self-esteem.
And while homeownership has some social benefits—a higher level of civic engagement is one—it is costly to the economy. … Too often, it ties people to declining or blighted locations, and forces them into work—if they can find it—that is a poor match for their interests and abilities.
As homeownership rates have risen, our society has become less nimble: in the 1950s and 1960s, Americans were nearly twice as likely to move in a given year as they are today. Last year fewer Americans moved, as a percentage of the population, than in any year since the Census Bureau started tracking address changes, in the late 1940s. This sort of creeping rigidity in the labor market is a bad sign for the economy, particularly in a time when businesses, industries, and regions are rising and falling quickly.
I’ve been reading this more and more of late, usually written by someone who resides in New York, San Francisco or some other area where real estate is vastly expensive and it’s not at all uncommon for people, even those with upper-middle-class incomes, to rent their whole lives. Sometimes it’s accompanied by a crack about George Bailey, the sap, and quotes from his lecture to Mr. Potter: Do you know how long it takes a working man to save five thousand dollars? Just remember this, Mr. Potter, that this rabble you’re talking about… they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath? Anyway, my father didn’t think so…
Since nobody else seems to be saying it, let me be a voice in the wilderness and say it now: While homeownership is not an unalloyed good across the board, it is by far something that’s more good than bad, and I’ve lived in the neighborhoods that prove it. Richard Florida teaches at George Mason University now, but he used to be at Carnegie Mellon, in Pittsburgh, and you’d think he’d know better. It’s hard to know how much of Florida’s shtick is bomb-throwing, but you suspect he’s being deliberately provocative when he spews some of this crap — that the government should encourage renting, not owning, and that an unanchored labor force is better for the economy than a homeowning, lawn-mowing one. (That part about happiness and self-esteem is simply solid-gold bullshit, so I have to think he knows what he’s doing.)
Take it from a resident of some fairly crappy neighborhoods: When, as a homeowner, you hear that the place across the street, having failed to sell after 18 months on the market, is now going to be rented, you do not say to yourself, “Oh, good — some nimble knowledge workers of the new economy are coming to the neighborhood!” You say, “Swell. Another bunch of people who will park their cars on the lawn, fail to tuck the curtain inside the tub during their showers and never be home on trick-or-treat night.”
Why is this even being debated? Homeowners have a stake in the local schools, raise hell about local crime, start neighborhood watch patrols and care intensely about their neighbors, even if it is only because it affects their own property values. It hardly counts against them. They’re also more likely to do that other economy-goosing activity: Have children. Frankly, an economy that requires me to uproot my family every three years for another rented townhouse doesn’t sound like an improvement, even over the current unpleasantness.
The problems attached to the current housing market came about because lending standards fell so far that the policy no longer encouraged responsibility, but irresponsibility. For most of the decades since the government started encouraging home-buying, through tax policy mainly, it has worked splendidly to improve communities and build wealth. Can we stop having this discussion?
Maybe some of you are wondering about today’s headline. Good thing you stuck this far:
I was in Fort Wayne this weekend, so Kate could see her buddies and I could do likewise. Friday I met Alex at Henry’s, my old local, after work. Alex drinks Jack Daniel’s on the rocks, and I was reminded of one of his odd habits — he folds the cocktail straw into a triangle and saves them:
And then what does he do? He has a storage system:
When it’s full, he can trade them in for a new liver.
And so we greet Monday, and a new week. Let an old post from Coozledad guide your actions this week: How to catch a bull.