Economic mobility and home subsidies

A friend of mine, Steve Lafleur, argues that subsidies for home ownership are not good public policy. In today’s economy many young people require mobility in their profession. It is becoming more and more common for people to live in multiple cities throughout their lives. So home ownership can often act as a anchor holding down someone’s progress, since so much of an individual’s economic resources goes into a house.

Here is a section of the article:

Home ownership has been considered an integral part of the American Dream for as long as anyone can remember. Now it has come under scrutiny, notably in a June Wall Street Journal piece by Richard Florida, which claims that that home ownership reduces employment opportunities for young adults, since it limits their mobility. To support ownership, others — particularly Wendell Cox — have argued that home ownership levels do not correlate with the economic productivity of cities, and cite the rapid suburban development in the Sunbelt as evidence that home ownership is as valuable as ever.

My inclination is that the truth lies somewhere in between the two sides of the debate. For the sake of simplicity, I'll refer to them as New Urbanist supporters versus Smart Growth opponents (I realize these are broad generalizations). While they disagree on the merits of home ownership, there's an interesting point of agreement: both sides oppose subsidies to homeowners. I'd argue that both sides should focus on getting the issue of discontinuing subsidies onto the national agenda.

Read More