Post WWII America saw the mass migration of families into suburban homes, aided by public policy designed to subsidize homeownership through low interest rates, tax deductions on mortgages, and freeway construction.
Policymakers saw the home as an asset that guaranteed financial security - a "nest egg" that every retiree should aspire to own. The policy was espoused to promote responsible citizenship - after all, an owner should be more invested in their community.
The policy set in the 1950s and 1960s has shown us that the opposite is true. Often, homeowners' incentives become misaligned with the very community they join as they try to protect their investments and depress supply to the greatest extent possible. This often manifests in the form of blocking apartment construction, protesting tall buildings that block sunlight, and barring nightlife.
The policy of homeownership subsidization has created a cycle of NIMBYism that leads to urban sprawl, anemic commerce, dead suburbs, and car reliance. Subsidies to homeowners become a subsidy to the wealthiest members of society, not the ones who need the subsidies most.
I argue not that homeownership is a bad idea - in fact, owning assets is a good thing. I am simply arguing that homeownership fever was a public policy mistake that subsidized white flight, cut out cities apart with freeways, and enabled NIMBY policies to take hold.
Ownership in assets, for those who can afford it, can be an appreciating investment over time, not to mention offering protection from a landlord who wants to move back in.
The state of American housing is binary. Either you are an owner or a renter at the whim of a landlord and year to year leases. The lack of innovation in real estate is stunning, and I hope to see more startups building in the space.
• A 10 year lease term could offer a retiree peace of mind.
• Month to month leases for working professionals
• Week to week leases for college students looking for flexible housing options.
Imagine purchasing a 20 year lease, and being able to live in the house for 5 years and resell the lease on a healthy secondary market. People could invest in leases as an asset - and being a renter and an owner wouldn't have to be a binary choice.