Myth - A nation of renters

Some of you know I'm working on a book project, A Conservative on the 2009 Housing Recovery, and today specifically the second chapter which details commonly held myths about housing. Here's a bit of Myth Number One - would appreciate any feedback positive or negative.

Chapter Two- 10 Myths about housing

Myth One - It would be better for more families to rent their homes

This is a catagorical insult to the American ideal. We may as well suggest that Americans would be better off if only landowners voted, or if the government controlled all health care, or any other list of nonsensical mental excursions that end up in socialism or worse. The AMERICAN DREAM has been and must continue to be that a family can own their own home. For a few transitory households renting may make some sense at times and in certain seasons. But for the most part every family should have the opportunity to purchase a home. President Bush announced goals of attaining record levels of homeownership in excess of 78% of all households, these were great goals and his leadership should not be faulted merely because housing values have slid. It's a good idea to save for retirement, and just because many IRA's and 401K's have reduced in value due to stock values, this does not mean people should stop saving for retirement.

I hesitate to say this so strongly for fear that do-gooders will then suggest that the government needs to step in to make ownership happen by legislation or regulation. No, no, and a thousands times NO! Families want to buy a home, they want to live out the American Dream of ownership and wealth creation. They don't need the government to tell them to do it or manipulate the markets to make it happen. Builders want to build for first time buyers, and one of their largest obstacles is the government in the form of impact fees and zoning that combats affordable housing. Lenders want to provide mortgages for first time buyers, and help them fix their credit if need be, once again government gets mostly in the way. We cannot legislate the American Dream, isn't that the whole point of our 230 year experiment? The American Dream exists where familes and individuals make decisions for themselves. Government needs to stay out of the way, so they can decide for themselves.

Almost every family I have met over my last 20 years in this industry would be better off owning a home than renting. First, our tax system favors home ownership in that all mortgage interest can be deducted, rent cannot. Second, every payment made in a normal 30 year mortgage helps that family accumulate a little more equity and thus household wealth. Third, the self-confidence and pride instilled in a family when they own their own home is patently American in its ideals and culture. We want to have our own place, a place that is ours and no one else's. Sure there were many families that I met that couldn't quite afford a home yet, or had some credit issues that we needed to work to clean up, or needed totally different jobs to make it all work. But in every case where a family wanted to do the work, to be disciplined to save some money, pick up a second job, contact creditors and work things out, homeownership was possible.

When we fall for the liberal tact of "some just aren't smart enough or astute enough" to own a home, we start down a slippery slope of "us and them" that is not American. There are many families that cannot afford a $500,000 home, but they may well be able to purchase a $65,000 home after six months of saving for down payment and cleaning up credit problems.

One last comment, to my conservative friends reading along, who think I'm being hypocritical using tax law as a reason to buy a home. I will agree that for the most part tax laws should be simplified and flattened. If during this process one day the mortgage interest deduction is eliminated, while taxes are actually reduced and flattened, I will be supportive. I understand that favoring one consumption decision over another is still government manipulation and intervention. Today though, the tax laws do strongly favor purchasing a home over renting, and if we merely eliminate the tax benefit for some environmental or culture correctness that suggests that more people should rent, I won't back it.