Monday, June 23, 2008

Krugman does the right thing, question homeownership

From the NY Times (registration required):

"Listening to politicians, you’d think that every family should own its home — in fact, that you’re not a real American unless you’re a homeowner. “If you own something,” Mr. Bush once declared, “you have a vital stake in the future of our country.” Presumably, then, citizens who live in rented housing, and therefore lack that “vital stake,” can’t be properly patriotic. Bring back property qualifications for voting!

Even Democrats seem to share the sense that Americans who don’t own houses are second-class citizens. Early last year, just as the mortgage meltdown was beginning, Austan Goolsbee, a University of Chicago economist who is one of Barack Obama’s top advisers, warned against a crackdown on subprime lending. “For be it ever so humble,” he wrote, “there really is no place like home, even if it does come with a balloon payment mortgage.”

I agree. The idea of homeownership for everyone is extraordinarily environmentally inefficient and encourages the sort of suburban sprawl present in the U.S. that's the equivalent of a large middle finger given to the earth. Mini malls, no public transportation, no walkability, all that water use to maintain pristine lawns, the necessity of cars, plus no planning whatsoever in layout since the new towns are created on the backs matchbooks.

As to the concern of a critic of Krugman's "O.K., I know how some people will respond: anyone who questions the ideal of homeownership must want the population “confined to Soviet-style concrete-block high-rises” (as a Bloomberg columnist recently put it). Um, no. All I’m suggesting is that we drop the obsession with ownership, and try to level the playing field that, at the moment, is hugely tilted against renting." I would have to say that the idea of single family homes as a dominant form of housing is unique to the United States, with Europe as a whole rejecting it. I've heard that home ownership is very, very valued in Australia, but I don't know enough about that to make any sort of judgment.

But in Europe as a whole home ownership is reduced because of high population density and the practical consideration of lack of space. Unlike the United States, European towns have been in existence since pre-industrial feudal times, when money, as it were, was not flowing Having U.S. style homes would have wiped out the towns when bad economic periods came either in the form of agricultural crises or crises related to war or possibly bad losses in merchant interests.

Soviet style apartment blocks aren't the only response. Indeed, those apartment blocks were created through a combination of shoddy construction because of the demand for fast construction at the lowest cost and a perceived "socialist toughness" that the occupants were supposed to bear. Socialist housing doesn't have to be like that. And yes, I have seen Soviet constructed housing in person.

I'll explain. When I was visiting Vienna five years ago I made a special trip out to Karl Marx Hof, which was a public housing project made not by the Soviets but by the Austrian Social Democrats, who controlled Viennese politics for quite some time in the early 20th century and implemented a program of municipal socialism. Karl Marx Hof was constructed with livability in mind. It's not just concrete, in fact it's brick, with spacious areas for soccer and other sports included in the large courtyard in the center. It was constructed as workers' housing. Now, the innovations that it put forward have increased its value so much that it's inhabited by well off but not rich people in Vienna. It's quite a testament when public housing increases in value over the years. In the eastern sector of Vienna, on the other hand, you have Soviet block apartments that were built when that area was the Soviet zone of occupation after the second world war. They are literally just boxes with windows cut into the concrete in rows and rows and no decorations or artistic embellishments of any kind whatsoever. Not very appetizing.

Places like Karl Marx Hof and some of the projects with New Urbanism going on in towns like Curitiba, Brazil, put the lie to the idea that affordable apartment living has to be a downgrade in ones' standard of living. Indeed, compared to an integrated town, can one really maintain that an atomized suburban living situation is the best quality of living that we can experience?

No comments: