It’s true, Homeownership is a Gateway Drug! As home ownership relates to a lifestyle choice, it is clearly a commodity that 70% of American‘s on the street aspire too. As a drug, the idea of homeownership causes these aspiring individuals and families to:
- Seek safe neighborhoods
- Seek quality schools
- Seek a sense of community and neighborhood pride
- Seek access to employment
- Seek access to “desirable” services
- Seek to be close to quality retail sources
- Seek access to recreation and open space
- Vote in elections
This homeownership idea is not such a bad thing! It has been said that homeownership in Nazi Germany dropped from our current levels of 60-70% to a low of 33% by the time Hitler was in charge. This may sound extreme, but responsible government policy that encourages homeownership is deeply rooted.
Currently, state and federal benefits include but are not limited to:
- Tax advantages on mortgage interest
- Property tax deductions
- Energy conservation credits
- Quasi-Governmental agencies to insure home mortgages (FHA, FNMA, Freddie, VA)
For the most part, this has been responsible public policy. It is well defines and clearly proven that crime rates and public school performance are lower and superior respectively. Citizens worldwide aspire to homeownership. Where we average between 65-70%, around the world, rates run as high as 80-90%. Italy ranks the highest on a worldwide ratio.
According to the Department of Commerce:
During the height of the housing bubble in 2004 the U.S. rate of homeownership soared to 69%. While Americans enjoyed record low interest rates and some of the most relaxed credit requirements; homeownership rates climbed to record highs.
The American Dream of becoming a homeowner seemed to come true for hundreds of thousands of wishful Americans and the possibilities seemed endless. Mortgage lenders seemed almost giddy at the opportunity to place wanting American into homes of their own. As we all know now it was this open-handed approach to lending that not only shattered the dreams of hundreds of thousands of Americans, it also caused the housing market to become saturated with foreclosures.
There is a fundamental difference between a dream and an entitlement. Dreaming of becoming a homeowner is just that, a dream. The American system of reward has always been that of hard work and sacrifice, and most of all a common sense approach to all things of importance. If any of those measuring sticks are removed front he equation there is no real possibility of true success.
Exactly, responsible public policy can enhance our communities. Correctly administered, homeownership policy can be medical relief. Handled irresponsibly, homeownership becomes a prolific gateway drug that damages our entire economy.