The case against homeownership

Let's hear it for rootless cosmopolitanism, says the Economist. Owning property is boring and economically harmful.

By Andrew Leonard

Published December 4, 2007 4:38PM (EST)

"Roots are for vegetables," declares Free Exchange, the flagship blog of the Economist newsweekly. Homeownership not only inflicts an unnecessary drag on the economy, but encourages soul-killing complacency.

The efficient allocation of people to jobs depends to a great extent on the mobility of labor. Casual empiricism suggests that the anchoring effect of homeownership is huge. When people speak of "putting down roots," they generally have house-buying in mind. But roots are for vegetables. Humans prosper by roving in search of opportunity. When opportunities are elsewhere, deracination is liberation.

Subsidizing homeownership through huge tax breaks not only reinforces a cultural ethos in which homeownership is considered central to the American Dream, but also reinforces pernicious communitarian myths of the profound romance in seeing nothing and going nowhere. This ethos is at war with the spirit of autonomy, exploration, and entrepreneurial dynamism at bottom of our wealth and well-being. I would suggest we not encourage it.

Free Exchange takes as its launching point a passage in an article by Clive Crook in the current Atlantic (subscription required) that references research by U.K. economist Andrew Oswald finding "homeownership makes workers less mobile, which brakes economic growth and worsens unemployment, especially in areas blighted by the decline of locally dominant industries." A more detailed summary of Oswald's views can be found here.

Oswald's views are interesting, and give new life to the age-old rent-vs.-buy existential dilemma. But Free Exchange's transformation of this argument into a denunciation against the very idea of "rootedness" is, if we exclude the likely possibility that it's nothing more than provocativeness for provocativeness' sake, a sad revelation of a different kind of cultural ethos bordering on libertarian nihilism. How the World Works supports economic growth and labor mobility. But there's something also to be said for a sense of community and belonging. A healthy society achieves more than just "the efficient allocation of people to jobs" -- a connection to place nurtures meaning.

And who, exactly, exalts the "profound romance in seeing nothing and going nowhere"? We'll give Free Exchange points for knowing how to turn a phrase. But there's a lot to see in one's own backyard, and a walk around the block is a journey through a rich universe.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Globalization How The World Works U.s. Economy