Tuesday, August 2, 2011

Rent revolt (4 Nov 2009)

A useful myth took definitive hold in the Reagan years about taxes: the government steals our income through taxes and helps the lazy poor with massive transfer payments. Liberals have never managed to effectively counter this nonsense, perhaps in part because they are bought off by actual massive subsidies of their own, which arguably come at the expense of the poor. (Dean Baker and James Galbraith each have good books on how this works.)

Home-owning subsidies are maybe the worst of these. Justin Fox linked to this Congressional Budget Office report about the government subsidies in housing, which estimates that (as Fox notes in his post's headline) that only 20 percent of the federal housing aid goes to renters. The remaining 80 percent goes to homeowners, mostly in the form of mortgage-interest tax deductions. Another way of putting this is that America uses policy to create a rentier society, subsidizing landlords and creating property bubbles for their short-term benefit. And meanwhile, the report tell us, "The burden of housing’s costs is more pronounced among renters than among owners: In 2007, 45 percent of renters (compared with 30 percent of owners) paid more than 30 percent of their income for housing."

The alibi for these subsidies to those who are already relatively privileged is that homeownership is an inherent good in its own right, a widely disputed claim. It is neither economically efficient, environmentally sustainable, nor the facilitator of more livable communities. (America's fixation on single-family homes gives us anomie and exurbs.)

I wonder what renters like me can do about this. I have no interest in home owning, but feel like a chump for missing out on the gravy train. I'm like a middle-class person who insists on riding the bus instead of buying a car like society seems to be insisting I must. It grows tiresome to go against the grain of what society tells you someone in your class should do; to persist in it we probably need to link isolated individual behavior to an organized movement. Otherwise it seems like pyrrhic self-importance.

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