To own or not to own?

Real estate, not just as a commodity with a price tag but as a way of life, has taken a beating over much of this decade, and even if prices were favorable, there are good and sensible reasons to rent instead.

Still, the intangibles count for something:

I am bullish on home ownership. I think it gives homeowners a sense of security, a blanket of protection that may or may not be a mirage. Economists, who see the world in a “cash nexus”, do not understand this; planners, believing they know a better way, don’t realize that a rental apartment in a dense development does not usually provide our peaceful havens from the cruel world like a single family home or a townhouse that we have a stake in.

Once in a while you’ll meet up with someone who insists that the proximity of said cruel world is a feature, not a bug, that “socialization” is of dire importance. Try not to laugh too hard.

Homeownership may be precarious, but it does provide a greater sense of permanency for families and communities. Home ownership also stimulates the economy. Consumers never buy as much as they do the first few days in a new home — countless trips to Lowes, Home Depot, Bed, Bath & Beyond, the Container Store. A tenant or landlord may buy for their place, but perhaps never with the care and fervor that comes with homeownership. Apartments are built with, at the most, 30 year life spans. I’ve seen enough Section 8 housing to tell you — you don’t want to live in them at the end of their life-cycle. Apartments are considered temporary, places for people who are in transition or not really sure they are going to stay, one reason why they drive higher crime rates.

The downside of Section 8 is covered here.

Of course, it hasn’t all been Skittles and beer for those of us who are buying:

The problems came when we started using our homes as slot machines or banks. Home equity lines of credit were illegal in Texas until 1997 as a consumer protection, and the banking industry led the charge to loosen that law with a constitutional amendment. In Texas, the total of all mortgage debt on your home (including HELOCs) is limited to 80% of the home’s fair market value, among other stipulations.

I must mention here that I borrowed rather more than 80 percent of the price when I bought the palatial estate at Surlywood, which was a theoretical risk factor even outside Texas, but I survived; the ratio is now around 70 and dropping. Not everyone has been so diligent/fortunate [choose one].





2 comments

  1. fillyjonk »

    1 September 2009 · 10:55 am

    My father often said that one of the problems with ‘true’ Communism is that people don’t own the land they’re working or the place they live, and that gives them little-to-no incentive to improve things, or even take care of them.

    That ownership leads to greater stability and care. Having lived next door to Renters from Hell one summer (and Renters from Heck, on the other side, more recently), I’m inclined to agree with him.

    I’m sure there ARE apartment dwellers who are careful and do what they can to maintain the place (I was one), but I think on average, a person cares more for that which they own. So there may be intangible benefits to the community of having a lot of owners as opposed to a lot of renters.

    And from the homeowner’s perspective? You never have someone telling you you “own too many books and that constitutes a fire hazard” as my former apartment manager once told me – books that were neatly arranged on shelves, not tottering in Colliers-Brothers-esque stacks.

  2. unimpressed »

    1 September 2009 · 11:27 pm

    Good grief. Books don’t spontaneously combust because there’s a spark of intelligence involved in their everyday usage as some people seem to think they do, apparently.

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