Stop trying to make me buy a house
Senator Warren and Senator Moreno revive the bipartisan case against renters.
Imagine if, at 18 years old, your only options were to remain in your parents’ home or to buy a home of your own.
I think most young people would be extremely put off by the idea that the only way to forge your own path in the world would be to both have enough money to purchase your own property and to have enough certainty to commit to a specific location (and therefore job market and dating market).
But, you know, people are different!
Roughly half a million 18- to 23-year-olds are homeowners, and while that’s only 2.3% of all people in that age group, it just goes to show that there are a lot of people in this country living lots of different kinds of lives.1 And that’s okay.
As you can see in that graph, low mortgage rates in 2020 caused a big jump in young homeowners, which indicates that there is unmet demand for homeownership among even very young adults. But still, I think it’s safe to say that the majority of young adults would probably not choose to buy a house even if they had the financial means to do so.
At its best, homeownership is stability, but that stability comes at a price: Freedom.
Fresh out of college earning $48,000 a year, I rented a room for $900 on a month-to-month lease in Prince George’s County, Maryland. There were some problems with the house, but when the campaign I was working on ended and I got a new gig in South Carolina, it was trivially easy to move without incurring a bunch of costs of either breaking the lease or — god forbid — selling a house.
People make pro-homeownership arguments all the time so I won’t repeat them here, but rarely do people hear about the downsides. The costs of moving for homeowners are high, though. Either they have to sell their house or become landlords (or the very wealthy can afford to hold multiple properties).
As Yale Law professor David Schleicher explained in his great paper, “Stuck! The Law and Economics of Residential Stagnation,” homeowners often don’t move even if they’re offered better opportunities elsewhere. Worse, if the economy is doing badly, homeowners who may otherwise have braved the difficulties of a sale have an extra incentive not to sell because they smartly want to hold out for when the market recovers. It’s not exactly clear what the mechanisms are, but, “homeownership rates correlate with unemployment and lower interstate labor mobility.”
All this to say, there are real reasons why someone would prefer the freedom of instability to the freedom of stability.
So far this is one massive subtweet, so I’ll just make the subtext, text:
Last week, the debate in Congress continued over a provision in the ROAD to Housing Act that would significantly hamper institutional investors from building single family homes for the purpose of renting them out.
Putting aside the benefits or costs of such policies, I want to draw out a latent belief held by conservatives on the left and right: That all renters are temporarily embarrassed homeowners.
Republican Sen. Bernie Moreno argued that “it’s absolutely correct that we should be building homes to buy and not to rent. And I urge my colleagues in the House to vote for the bill as is, without modifying it, and get that bill passed.” The quote was hyped on Twitter by a senior Warren staffer, the president of The Century Foundation (a former Elizabeth Warren staffer), and two leaders of the monomaniacally-obsessed-with-corporate-power ideological sect: Matt Stoller and Nidhi Hegde.
This came after Warren’s own remarks that while it was fine for institutional investors to build “as many apartment houses, as many condo complexes, as many triplexes as they want,” that “homes should be for families, not for giant corporations.”
Apparently, the apartments I lived in as a child were not real homes.
