Harry Moroz

Financial Stability And The Renter

George W. Bush’s ownership society portrayed renters as second-class citizens. “Homeownership,” the former president claimed, “is the cornerstone of America’s vibrant communities and benefits individual families by building stability and long-term financial security.”

The housing crash laid bare the speciousness of this claim. Beyond the absolute wealth destruction caused by the deflation of the housing bubble, inequality has increased as non-wealthy households suffer more than wealthy ones because more of their wealth is tied up in residential housing.

Bush’s ownership society meant that renting was portrayed as an unstable financial state: even lower-income households, it was assumed, would be better off owning. This viewpoint obscured the real question of how to create financial opportunity without risking housing affordability and stability.

Homeownership is no less valued than before: the homebuyer tax credit (and its extensions) and efforts by the Fed to prop up the housing market are a huge, and proportionally less talked about, part of the continued response to the financial crisis. Knee-jerk aversion to public housing remains strong.

But even Obama administration proposals that deserve critique – such as Transforming Rental Assistance – represent a shift in the treatment of the renter. Choice Neighborhoods, for instance, sees public housing as a cornerstone, along with access to robust services, of community development. Meanwhile, a very different program (around during the Bush years) in Cincinnati seeks to provide renters a means of building equity by paying their rent on time and maintaining the buildings in which they live, breaking down the common assumption that renting and equity accumulation are by their very nature incompatible.

Renting is coming to be seen as a means to affordable housing that can create, not undermine, the financial stability of a household.

Harry Moroz: Author Bio | Other Posts
Posted at 2:27 PM, Jun 02, 2010 in Housing
Permalink | Email to Friend