'Cause everything is rent...
I'll admit it - I'm not ready to be a homeowner yet.
I'm not ready financially. Gretchen and I have decades of higher education between us, and that comes with a cost. While she's still in school and we're living apart, buying a house would be crazy. Even once we move in together, it would be a tough sell, financially.
I'm not ready for the responsibility. I don't know how to fix minor plumbing catastrophes. I don't know (or much care) about proper lawn maintenance. I like having my lawn mown by the landlord, and my driveway plowed when the blizzards hit. I like being able to call in my broken water heater, and know that someone is taking care of it... and that it won't mean a hit on my checkbook.
I'm not ready for the commitment. Being tied down to a piece of property scares me. I've seen with one of my friends how hard it can be to move a house for a price you're happy with. With the next several years a big question mark, as my wife and I try to establish a life together for ourselves someplace, it doesn't make sense to be bogged down, even if I could joke about joining the "landed gentry." And with pastors (and possibly professors?) being more mobile than many middle class workers (and with housing still provided by many of our employers), I'm not sure owning a house will make sense down the road, either.
None of which is to rule out buying a house, if Gretchen and decide together that it's the right move for us. But it does make me want to shout a big "AMEN!" to Paul Krugman's recent column in the Times, questioning America's policy of promoting an "ownership society" of owner-occupied housing.
Why is it that my parents, friends, and parishioners are given a huge subsidy for owning their homes (deducting the interest on their mortgages come tax day), but we renters are given nothing but the finger by the IRS? What compelling government interest in home ownership justifies that kind of bias?
As Krugman points out, there are lots of arguments in favor of rental housing over against purchasing a home, particularly in tough economic times, and among workers who need to follow the jobs. He rightly wonders about the president's line of thought, when he utters in a speech: "If you own something, you have a vital stake in the future of our country." Don't renters have just as vital a stake in this country? Are we really only second-class citizens?
For now, both my wife and I rent, brazenly defying (out of necessity or out of choice) the government's preferred mode of living for us. And we, along with a whole lot of others, are paying a hefty price for being renters in an "ownership society." It's hard not to wonder why our government throws such huge amounts of money every year at discourging what is, for us right now, the best choice.
It's public policy, but is it a good policy for the public? Mark me down as unpersuaded.
I'm not ready financially. Gretchen and I have decades of higher education between us, and that comes with a cost. While she's still in school and we're living apart, buying a house would be crazy. Even once we move in together, it would be a tough sell, financially.
I'm not ready for the responsibility. I don't know how to fix minor plumbing catastrophes. I don't know (or much care) about proper lawn maintenance. I like having my lawn mown by the landlord, and my driveway plowed when the blizzards hit. I like being able to call in my broken water heater, and know that someone is taking care of it... and that it won't mean a hit on my checkbook.
I'm not ready for the commitment. Being tied down to a piece of property scares me. I've seen with one of my friends how hard it can be to move a house for a price you're happy with. With the next several years a big question mark, as my wife and I try to establish a life together for ourselves someplace, it doesn't make sense to be bogged down, even if I could joke about joining the "landed gentry." And with pastors (and possibly professors?) being more mobile than many middle class workers (and with housing still provided by many of our employers), I'm not sure owning a house will make sense down the road, either.
None of which is to rule out buying a house, if Gretchen and decide together that it's the right move for us. But it does make me want to shout a big "AMEN!" to Paul Krugman's recent column in the Times, questioning America's policy of promoting an "ownership society" of owner-occupied housing.
Why is it that my parents, friends, and parishioners are given a huge subsidy for owning their homes (deducting the interest on their mortgages come tax day), but we renters are given nothing but the finger by the IRS? What compelling government interest in home ownership justifies that kind of bias?
As Krugman points out, there are lots of arguments in favor of rental housing over against purchasing a home, particularly in tough economic times, and among workers who need to follow the jobs. He rightly wonders about the president's line of thought, when he utters in a speech: "If you own something, you have a vital stake in the future of our country." Don't renters have just as vital a stake in this country? Are we really only second-class citizens?
For now, both my wife and I rent, brazenly defying (out of necessity or out of choice) the government's preferred mode of living for us. And we, along with a whole lot of others, are paying a hefty price for being renters in an "ownership society." It's hard not to wonder why our government throws such huge amounts of money every year at discourging what is, for us right now, the best choice.
It's public policy, but is it a good policy for the public? Mark me down as unpersuaded.
posted by Bob at
2:26 PM
4 Comments:
Why can I not help but think that a big part of the reason you object to that statement is simply because "W" said it? I think this is one thing that is definitely right on. As a home owner, you do have more of a stake. Not saying that you would, but as a renter, you (the general "you," not necessarily the specific "you") can just up and leave if you like. The owner has more of a vested interest in his country/state/community/neighborhood prospering. For your situation that might be a good thing.
I don't know about the IRS, but many states (MN included) do give a renter tax credit. If you want to lobby for a national rental tax credit, that's fine... just don't take my interest tax credit away. It almost lessens the sting for the property tax scam (let's tax people every year because they own something? WTF?).
And if you do have some short-term geographical stability in your future, I would encourage you to join the landed gentry. If the church pays (even part of) your mortgage, you've got quite an investment going without having to think about it. Housing market slumps/corrections aside, real estate in general goes up in value. Your rental only goes up in value for your landlord. With ownership, you could have yourself a tidy sum when it comes time for you to relocate or retire - even if you aren't able to invest for retirement, your housing allowance can work for you in a home, or just go to pay your rent.
Just giving you my $.02. I'll be sure to send you a form 1099, so that you can be properly taxed! ;^P
By
Shawn Krueger, at 3:55 PM
I'll look for your paperwork!
True to my socialist leanings, I'd be inclined not only to get rid of the deduction for mortgage interest, but to include renters in the local taxation that supports schools. As a "property tax," my landlord pays it based on how much the property is valued at. I think it makes a lot more sense to have a "residency" tax (which probably ends up looking a lot like a local income tax, I guess, if it's to be progressive and not flat). Every citizen of a community has an interest in the strength of the school system, and it's always bugged me that pastors who rent or live in parsonages don't contribute toward education in the same way as everyone who owns a home.
Truth is, I'm really not picking on Dub this time. (If you really want to know, I'm currently a little annoyed with Obama and his wholehearted support for corn ethanol... hardly a great environmental or economical fuel solution - McCain has the better policy there.) Dub's just the one who happened to be peddling that particular turn of phrase, and it was handy, since Krugman had quoted it.
For us clergy, when we're living in parsonages, we usually try to negotiate a "housing equity" contribution by our churches to our retirement accounts for exactly the reasons you mentioned. It's on the premise that if the church is going to tell us where to live, we shouldn't get screwed out of the single biggest asset most people have when they retire. (It's a different story in my case, where there's no parsonage here, and I made the decision to rent of my own volition.)
As for the "vested interest" argument, I might be willing to buy that on a local level landowners are more invested in the fate of the community. But when we're talking federal policy and federal taxes, you just can't tell me that renters don't have as much a stake in the fate of the United States as anyone else! We may not be as tied down to a particular community (which is, as Krugman argues, a valuable thing for the nation, by the way), but we sure as heck aren't international vagabonds. Our citizenship is just as solid as yours, and the policy of encouraging home ownership through the federal tax code doesn't make home owners better, more reliable citizens... it just treats the rest of us as second-class citizens.
It may well make sense someday for Gretchen and me to buy a house - maybe even sooner than I expect. I don't know the future. But I fail to see why the federal government should effectively spend all kinds of tax money (which is what a deduction does) to encourage people to buy property. It's just a bunch of "American dream" mythos phooey, in my book.
By
Bob, at 4:23 PM
Well, I'm glad to hear that you aren't sucked in by the ethanol canard. Real environmentalists should be shouting from the rooftops of their Priuses (Prii?) against the corn ethanol subsidies. It just doesn't make sense.
Arguments about public education could very easily steer us "off task," as Roxy used to say. But, assuming you make the argument that we all have an interest in the strength of the school system, then we should all have the interest equally, right? Why should it be "progressive?" Does the person in the big, expensive house really have more of an interest in the strength of the school system than the person in a smaller house or apartment?
I should have also said that there is nothing wrong with your aversion to yard maintenance... trust me, it sucks. But there are still options in the realm of ownership that let someone else take care of that for you. "Association maintained" are words that you want to look for in the listing.
Vested interest...
It may be easier to see on a local level, but building wealth and a retirement nest egg will mean that you are less likely to rely on government later in life as well. I'm sure there are dozens of arguments we could each make on either side of this one. And the federal government has their fingers in a lot of things that could and should be handled better on the state/local level, if I can go federalist on you. Off all the things that the federal government shouldn't be doing, why choose to care about this one that actually benefits a lot of people? Probably due to your socialist leanings in this entitlement society that we are turning into.
And finally...
True to your socialist leanings, you see a tax deduction as spending tax money, when what it is actually doing is leaving (or returning) hard-earned dollars to their rightful owners: the citizen who earned them in the first place. Then, they can decide how to invest/spend/donate it, not Uncle Sam.
By
Shawn A. Krueger, at 5:43 PM
OK, so I finally got around to reading that article that was sited as the source of this... so many holes in his logic, it makes my head hurt!
> ...the belief that you’re nothing if you don’t own a home...
Just because home owners are given benefits is not the same thing as saying that if you don't own a home, you are "nothing." That seems like an imaginative extrapolation to me.
> ... borrowing to buy a home is like buying stocks on margin ... many of those homebuyers have lost heavily on their investment.
Did they sell their home? Just like stocks, you only lose (or gain) money when you actually sell them. Home ownership, like some stock investment options, is meant for the long term in most cases. House "flippers" are different because they are usually doing renovations and/or clean-up before selling - they are also home investors, rather than home owners and don't receive the same tax breaks and incentives.
> ... one estimate put the average cost of a house move at more than $60,000...
I would love to see where that came from. I bet the reasons for that have little to do with the fact that it is a home, and more to do with the amount of stuff that is being moved. Most renters I know don't accumulate as much stuff as home owners, either because they don't have room or they move often enough that they keep their luggage light. This could be good or bad - I have a friend who moves at least every two years just so he doesn't accumulate too much stuff. I hate moving... and every time I do it, it gets harder and more expensive... but that's got nothing to do with wether it is an apartment or a house, just the amount of stuff. Sure, selling a house is more difficult than moving from an apartment, but assuming you have been there a while and maintained it, there is a nice incentive when you sell - you get to cash in that equity. The renter leaves with just his stuff and maybe his/her deposit back.
> Buying a home usually though not always means buying a single-family house in the suburbs, often a long way out, where land is cheap.
Well, that's a choice you have to make. There are plenty of homes in the city and first-ring 'burbs too. Moving out further, you often get more house for your money, but you want a house that large, you probably aren't going to find an equivalently-sized rental. And if you do, it won't be cheap. You could probably purchase a good sized home and have cheaper payments than if you rented - in fact, it has to be the case, or real estate investors wouldn't purchase rental properties. It ties into the previous argument about moving costs... purchasing a home gives you the option of more living space and having more stuff... furniture, a home theater, a dog/cat/bunny and 2.3 kids... you know, the "American Dream." No one is saying that owning is perfect for everyone, but it clearly IS part of the American Dream that most people aspire to. If it's not right for you right now, that's just fine, but the whining about it and illogical arguments against it just don't fly.
I think I'm up to $.06 now...
By
Shawn A. Krueger, at 2:30 PM
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