The Renter's Stigma
July 9, 2009
The Ideas issue of the Atlantic that is on newsstands now is pretty interesting. Some ideas are better than others, and I particularly like this one from Felix Salmon:
I was recently talking to a friend about the prospect of living in New York City. The conversation went something like this: "I think it would be great to live in New York City, but the cost of living is so expensive. I would probably have to rent for the rest of my life." It almost seemed like renting a home indefinitely was accepting defeat. I know there are many who feel this way.
I understand why people want to own homes. I also think there are good reasons to question those assumptions. We are subsidizing homeownership, both economically and emotionally. That should probably stop.
The housing mess is screaming out for a simple but effective solution... a decree that whenever a bank forecloses on a home, the current occupant has the right to remain in the property indefinitely, simply by paying the fair-market rent. Banks are killing each other by racing to sell their foreclosed houses as quickly as possible, before they fall further in value; this policy would force a cease-fire that would help all of them. It would also put an end to the equally destructive syndrome of soon-to-be-foreclosed-upon homeowners trashing their houses before they’re kicked out. This plan might not single-handedly end the recession. But it would certainly help.Another step (or perhaps the first step) in accomplishing this idea is to eliminate the renter's stigma.
I was recently talking to a friend about the prospect of living in New York City. The conversation went something like this: "I think it would be great to live in New York City, but the cost of living is so expensive. I would probably have to rent for the rest of my life." It almost seemed like renting a home indefinitely was accepting defeat. I know there are many who feel this way.
I understand why people want to own homes. I also think there are good reasons to question those assumptions. We are subsidizing homeownership, both economically and emotionally. That should probably stop.
I like this a lot - I'm a big fan of mixed-use land zoning--creating a good mix of rental properties and owner occupied homes.
The renter's stigm is strong here in Milwaukee. Home owners often say that renters "don't pay property taxes," public notices go out to land owners not residents per se, and there is this belief ownership means better people.
Dave, do people out in your part of the country actually believe that the "renters don't pay taxes" argument is true? Or is it a means to generate political support for their agenda?
If people were allowed to stay in the home and rent it it could help to slow the downward spiral of property values in America. This has been great for the first time home buyer, but for people who need to sell for a job or whatever are being killed by the foreclosure market. There are many benefits to this policy.
I also like this idea -- letting the occupants stay while making them pay fair-market rent is a great option. Less abandoned homes, more stable communities -- it's a fantastic sensible plan.
Which of course means it will never be implemented. God forbid.
Rob, Dave actually said "property taxes" and not just "taxes". At least where I live, renters don't pay property taxes, which is one of the reasons why I choose to rent and would never buy here.
Carol, I'm presuming that most renters don't directly pay property taxes. Rather, the landlord pays tax on his/her property and adjusts the rental price in response. If rental properties were truly "tax free", (all else equal) I imagine your monthly rental payments might be lower.
Of course renters pay property taxes, in the form of rent. Dave's right that people say such things, but they don't understand, obviously. No landlord pays out of his/her own pocket.