The Economic Downside of Homeownership
"Homeownership is a good thing, for the individual and for society. Or so American governments, whether Republican or Democrat, have long believed,' writes Floyd Norris. "The benefits have been cited repeatedly in justifying the existence and expansion of the tax breaks given to home buyers."
"But maybe it isn’t nearly as good as had been thought," he continues.
"A new study [PDF] by two economists concludes that rising levels of homeownership in a state 'are a precursor to eventual sharp rises in unemployment in that state.' As more homes are owned, in other words, fewer people have jobs."
"If the correlation is real, what could be the cause?", asks Norris. "The professors say they believe that high homeownership in an area leads to people staying put and commuting farther and farther to jobs, creating cost and congestion for companies and other workers. They speculate that the role of zoning may be important, as communities dominated by homeowners resort to 'not in my backyard' efforts that block new businesses that could create jobs."