Home Owning Revisited

In a consumer society, the Big Ticket purchase items are homes and motor vehicles. Owning both means perpetual debt! Renting a domicile and using public transit make more sense to this simplicity-oriented chap. Not only is renting no more expensive, in the long term, than home ownership, it is ideal for people who wish not to be a slave to debt and financial institutions, who want to be free to live a full life.

The vast majority of home buyers really can not afford to buy; for them a home mortgage loan is a life-sentence of indentured servitude. It could be called slavery for all the burdens it brings. The slave masters would be the finance industry that guards the reservoirs of accumulated capital.

The American Dream, owning one's home, is hyped by many industries simply to promote sales. In this context, buying a home is a rite of passage to middle class status and the respectability it supposedly fosters.

As a side commentary, having an automobile is another sign of first class status, and a rather costly one, at that! I would estimate that over three or four decades, the costs associated with automobile ownership(not counting the time spent attending to an auto)would exceed the median price of a home in California!(But, that's another issue, for another essay.)

The sub prime loans preyed on the most vulnerable people; those who bought the "Dream", but could ill-afford its consequences. The high risk mortgage loans have led to a financial industry meltdown and tens of thousands of home foreclosures, and probably continuing for the foreseeable future. The loan scandal was a direct result of deregulation and the unfettered greed it unleashed.

The financial industry's "credit default swap" instruments make a Ponzi scheme, even that of Bernard Madoff, look like a sophomore prank.(But, this too, is a subject for another essay.)

The imagined dream home is most likely a single family, subdivision dwelling on a parcel large enough for a swimming pool and barbecue patio. The tract is usually far removed from a town center or any commons. These divisions are typically economic- and often age-based, whites only ghettos.The high-end divisions are usually gated and have golf courses as design determinants. John D. Rockerfeller took the golf course option to the extreme, having a private one that flanked his great mansion outside of New York City.)

For the typical home buyer, ownership is elusive and illusory, certainly a long way off--thirty years. For the restless person who sells with only partial equity before the loan is paid off, actual ownership could never come to pass. The lender is the de facto owner until the debt is fully serviced. Whether the loan goes full term is any body's guess; and its that bet that provides easy money for speculators. Divorce,unemployment, illness, periodic collapse in the financial industry and the subsequent economic depression, make home purchasing a risky undertaking for most people.

The ongoing foreclosure crisis forces a reexamination of the American Dream. Mortgage debt is a serious matter; and home ownership is not for everyone--despite the lure of the financial industry. It would seem that renting would be less stressful in all aspects of having a roof over one's head.

As with the automobile, the price of a house is just the first of many, on-going expenses involved with ownership--which spawns a mammoth industrial and services complex beyond that of real estate and finance. And this is reason enough to advertise the Dream. Purchase a home, and you will be buying stuff, paying for various services, property taxes and insurance premiums forever after!

Social control is an aspect of mortgage debt that has not escaped the ruling elite's attention. You can't protest wars and the rollback of the New Deal or strike for better benefits and working conditions, if it would interfere with your ability to make monthly mortgage payments. It's difficult to service debt from behind bars and while unemployed. With average personal debt as burdensome as it is , there will be no revolution! And the ruling class wants to keep it that way.

Mortgage debt acts to keep wages low and job benefits few. The employer can force rollbacks by threatening to relocate offshore. In desperation, workers will make concessions to save their jobs--or so they hope. When collective bargaining becomes passe, anything can happen.

For ordinary people, mortgage debt eliminates discretionary spending and the possibility to accumulate savings. There is simply little or no money available to purchase consumer goods and services. A significantly disproportionate amount of family income goes to the financial industry. And this has a huge impact on the manufacturing and retail sectors, which then takes a toll on employment.

A case could be made that a consumer society would favor the singles lifestyle, where everyone has sole ownership and use of most everything. Anathema to market capitalism is the old credo: "Two can live as cheaply as one". In order for capitalism to continue its dominance, unit costs must continually decrease. This is accomplished by increasing production and demand. Marriage and multi-generation households can frustrate these objectives.

There is class bias and prejudice associated with home ownership, induced by interest groups, that owners are more responsible and more worthy as a class than renters. Supposedly, owners establish better neighborhoods, support civic affairs and public education. They are a political special interest group with lobby power.

Overlooked in this judgement is the resentments people harbor who are unfairly pigeonholed because they can not afford to buy, yet have to pay exorbitant rent. Today, most renters spend a large percentage of income on rent. Therefore, animosity toward landlords runs deeply! The hostility toward the system is often acted out against physical property itself. Interestingly, homeowners had reason to maintain their homes while values continued to accelerate at a breath-taking rate. Will they continue this practice as values plummet?

I would assume that there is no significant financial advantage in owning a home over renting one. That costs are approximately a draw is entirely likely. And this is why rents are so high today--maintaining profit parity with the home sales industry. Why do so many people succumb to the ownership myth? Advertising plays on vanity!

Just as socialism lends itself to a universal state-operated home rental system, market capitalism fosters privatization of and maximal profiteering from real property. Sadly, something rather strange seems to happen to people who acquire property from which they collect rent. The mindset hearkens back, surely, to feudalism and the superiority and arrogance of the landed gentry and those who fenced the commons.

Few ordinary people would freely subject themselves to the tortures of mortgage debt and home maintenance, if they had the option of renting at a fair and reasonable rate. In socialism, government would be the landlord and would rent at a very modest rate. During the Mao era Chinese Revolutionary and until recently, a family had rental leases for ninety-nine years. That has changed under pressures from globalization and restrictions imposed by the WTO. The Chinese government is now in the business of selling property.

Housing is a human rights issue and a responsibility of the state. Paying for a place to live should not constitute a financial burden! For this sojourner, renting liberates and allows a person to devote time and energies to other aspects of his or her existence, which lies beyond the toil of meeting mortgage payment deadlines.