[lbo-talk] home ownership again

James Heartfield Heartfield at blueyonder.co.uk
Tue Mar 27 10:32:51 PDT 2007


Doug says that low incomes are associated with higher home ownership (and quotes a reader backing him up). But association is not cause, any more than the wind blows because the leaves on the trees are shaking.

Surely, house prices are typically lower in rural areas and less developed nations, meaning they are more affordable. In cities, where there is a premium on being close to the centre, house prices are high, making it harder for people to raise the capital for an outright purchase, so they rent. In London, house prices are approaching an average of a quarter of a million pounds, which makes it difficult for people to buy, so more rent.

Like Engels (On the Housing Question) I don't believe there is any great difference in principle between renting and buying, when you rent, you are just buying piecemeal, when you buy, typically you do not buy outright but raise money through a mortgage, and pay it off monthly, like rent.

Right-wingers made a big appeal to the ideological dream that in owning a home you join the capitalists. Left-wingers should not respond by saying that there is a virtue in renting. There really is no difference of principle.

"I once worked for the social housing section of a Canadian provincial government and we noticed the same phenomenon. Home ownership rates were high in poor, rural areas because people there didn't have a choice between owning and renting. Rental housing was either minimal or non-existent. To me, low rental rates reflect market failure..."



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