The Rent’s Too Damned High
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Highlights
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But asset accumulation isn’t — and can’t be — a path to widespread prosperity. A middle-class that relies on increasing property values as a means to fund their kids’ university tuition, their own retirements, and the next generation’s down-payments sows the seeds of its own destruction. Far from guaranteeing you kids’ security, a focus on asset appreciation dooms them to precarity and penury.
- This fact makes owning a house doubly profitable, because the desperation of renters to get tax-advantaged shelter makes your house more valuable, and that additional value can be passed, tax-free to your kids. To top it all off, homeowners can access low-cost debt through home equity lines of credit, meaning that money itself is more expensive for renters.
- All of that makes tenancy more horrible, which makes homeownership more desirable, which makes homes themselves more valuable. In other words, the reason your parent’s $30,000 house is now worth $1.5 million isn’t (merely) that the neighborhood improved or because they finished the basement: it’s because tenancy is so life-destroyingly terrible and precarious that anyone who can find a way to scrape up a down-payment and buy a house will, even if that means assuming equally life-destroying levels of debt.
- Homeownership as a source of wealth was always a devil’s bargain. A decent place to live for all is obviously a sign of a functional society, just like a dignified retirement, a good education, and nutritious food, clean water and sanitation.
- A nation that seeks prosperity from asset accumulation necessarily becomes a land of winners and losers. The winners have assets, the losers pay to use them, which makes the assets more valuable, which lets the winners buy more assets. You know how this works: after all, you’ve played Monopoly.
- If your kids aren’t homeowners, they’re tenants. That’s the monkey’s paw irony of a generation’s worth of protecting your family by increasing the value of your home by making life worse for tenants. Every depredation your tolerated for tenants in the name of protecting your kids is now your kids’ destiny.
- The gains the middle class reaped during its years of simping for landlords were only ever a convincer for a long con, money the mark was allowed to hold onto for a time. Now that the con is closing out, those gains are being returned to their rightful owners, the tiny minority of Americans — mostly Wall Street firms — who are consolidating the human need for shelter into their hands.