Homeownership Causes Sprawl

For as long as there have been professional planners in this country, belief in the much ballyhooed "American Dream" of a house and a car out in the suburbs has reigned supreme. Urban enthusiasts may long of the days when American cities teemed with shops and pedestrians, but the conventional wisdom holds that as much as Americans may enjoy a taste of downtown now and then, at the end of the day they want the privilege of driving in their own car to their own house on their own patch of land out in the 'burbs. They always have and always will -- and woe unto any politician who forgets it even for a nanosecond.

Yet as is so often the case, the conventional wisdom is wrong. Rather than innate, the homeowner "instinct" in the United States is a classic case of an induced desire, one no more natural than the desire for oversized SUV's or plush all-leather interiors. Historically, there is not the slightest reason to believe that Americans desire to own their own homes any more than do, say, the Germans or French. Given the growing costs imposed by a hypertrophied housing market, everything from congestion and pollution to suburban anomie, there is growing reason, moreover, to believe that they are increasingly dissatisfied with what an overemphasis on homeownership has led to.

As recently as the 1910s, the problem seemed to be the opposite: rather than rising to ever-higher levels, homeownership was falling through the floor. Although progressives and high-minded clergymen argued that Americans should live in small towns, the population increasingly flowed to dense-packed urban centers where renting was the norm. Progressives were aghast. The influential New York housing reformer Lawrence Veiller argued that "the congregate form of living" was incompatible with democracy as Americans -- real Americans, that is -- knew it. Hence it was all-important that the homeownership be somehow pushed back up. "It is useless to expect a conservative point of view in the workingman," Veiller wrote, "if his home is but three or four rooms in some huge building in which dwell from twenty to thirty other families, and the home is his only from month to month." Only if workers owned their own home would class conflict, labor radicalism, and other such horrors abate and conservatism take hold.

Beginning in the 1920s and then far more vigorously in the 1930s, this is precisely the goal that government set out to accomplish. No expense was too great, no infrastructure investment too daunting. Yet while homeownership rates did rise, that was not the only consequence. For instance:

• By emphasizing one index above all others, policy-makers have persistently confused quantity and quality. A concept like "community" is certainly harder to quantify than homeownership, yet it is nonetheless important. Judging from a rising volume of complaints about lifeless, traffic-bound developments, it appears that community is falling through the floor. Homeownership is up, yet the quality of the home owning experience is down.
• A policy of homeownership uber allies has led to a growing reliance on government handouts rather than less. By the mid-1990s, a study by the Congressional Budget Office found that homeowner tax subsidies had exceeded $94 billion a year thanks to the mortgage deduction and other such tax breaks. This is money that could go to education, healthcare, or child nutrition, but which instead was being used to prop up what is falsely labeled a private-housing market.
• Rising government subsidies have led to growing inequality. By 1995, Washington was handing out four times in homeowner tax subsidies than what it was spending for low-income housing. Rather than using its resources to benefit those who need them most, it was using them to benefit those who need them least. Another study found that by the mid-Nineties, 44 percent of the benefits of the mortgage deduction went to the top five percent of homeowners who, because they were able to leverage their investments more highly, were therefore in a position to reap more of the tax benefits. When all government housing benefits are added up, tax subsidies and direct outlays alike, another study found that 15 percent wound up flowing to the bottom 20 percent of households, 5 percent to the next 20 percent, 6 percent to the third, 16 percent to the fourth, and a whopping 58 percent to the fifth or highest quintile. Rather than government of, by, and for the people, this is government of, by, and for the elite.

The bottom line is a national housing policy that is more and more dysfunctional. If a manufacturer were to maximize widget production without regard to the costs merely because he regarded widgets as an unalloyed blessing, the consequences would be predictable: he would soon be bankrupt. Yet by elevating homeownership to the status of an unalloyed public good, that is precisely what the United States has done with private real estate. By placing it beyond question, it has exempted it from anything resembling cost-benefit analysis. By exempting it in such a fashion, it has insured that the costs would run wild while the benefits would grow ever more dubious. Automakers, oil producers, developers, and a host of other specal interests benefit from economic policy that is so such strangely uneconomical. But the majority of Americans, including homeowners themselves, do not. Some wind up over-housed, others wind up without housing at all, while the great majority wind up under-served in some other respect.

In order to turn this problem around, Americans must learn to challenge the unchallengeable. There can be no unquestioned verities in a democratic society for the simple reason that nothing can be beyond debate.

Daniel Lazare is the author of America's Undeclared War: What's Killing Our Cities and How We Can Stop it, published this spring by Harcourt. His previous book, The Frozen Republic, is an iconoclastic study of the U.S. constitution. He has written about race, drugs, and urban policy for a wide variety of publications, including Harper's, The American Prospect, The New York Times, The Wall Street Journal and Le Monde Diplomatique. His interest in urban affairs dates back to the mid-1970s when he worked as a reporter in central New Jersey. Though occasionally dull, covering zoning boards and township committee meetings gave Lazare invaluable insight into the workings of suburban America. He developed an interest in deciphering how the policies and procedures of suburban towns (zoning codes, master plans, etc.) connected to the larger American Constitutional tradition. The result has been a quarter-century intellectual odyssey that has taken Lazare through multicultralism, Marxism, American history, and Constitutional theory. He lives in Manhattan.