Homeownership From The 40s-60s Rose Quite A Bit

[dropcap]T[/dropcap]he rapid rise in homeownership, which transformed the nation from a majority of renters in 1940 to a 60 percent homeowner majority by the 1960s, was fueled by the availability of credit. As Stone points out, residential mortgage indebtedness grew three times as fast as the GNP and disposable personal income from 1946 to 1965, reaching the level of 59.6 percent of disposable personal income by 1980. In the one essay which addresses the macro-economic dimensions of the housing question, Stone emphasizes the impact of mortgage indebtedness on the growing federal deficit and theorizes that this increasing dependence on credit represents a point of vulnerability in the system. Government action in the late 1970s was necessary to protect both lenders and borrowers, as witnessed by the frenzied merger bail-outs of thrift institutions nationally and incidents like th moratorium declared on mortgage foreclosures by a Pittsburgh judge under pressure from angry, unemployed steelworkers. Characterizing the credit bubble as the key element in a national economic crisis, Stone offers an emergency program centered on credit and price controls and a cutting of the federal deficit based on tax reforms aimed at a downward distribution of income. While Stone’s emphasis and recommendations will provoke debate, his analysis serves to link the housing question to broader issues of national fiscal and monetary policy.

With regard to housing policy per se, America’s housing Policy offers little specificity. The volume includes Dolbeare’s statement before the Senate Committee on Finance arguing for a restricted tax credit to replace the present homeowner deductions; Stone qualifies annual housing subsidy needs in the neighborhood of $70 billion based on his shelter poverty concept, which calculates income available for housing by first subtracting all non-housing necessary expenditures from disposable personal income; and Florence Wagman Roisman discusses legal strategies for protecting low-income housing. In the main, however, the authors issue the same basic call (in a manner which produces both useful cross-referencing and a certain redundancy of argument and statistics): the provision of housing as a right (an entitlement) which is affordable, of decent quality, in a neighborhood of choice, and which is responsive in particular to the needs of such beleaguered groups as minorities and female-headed households. In the concluding essay, Achtenberg and Maruse sharpen this call with a set of “general principles” for the decommondification of housing based on social ownership and production, public financing, neighborhood control, and affirmative action.

 

A program for the decommodification of housing is provocative in both practical and theoretical terms. Unfortunately, the present volume offers no illustrative examples of alternative approaches, although we are referred to the forthcoming Planners Network Housing Reader (Temple University Press, 1985) for relevant case studies. Conventional wisdom on the left has held, since Engels’ pamphlet The Housing Question in 1872, that homeownership is a petty bourgeois solution designed to coopt the working class by making them property owners. certainly, in capitalist nations, there is ample evidence to support this view. At the same time, however, in socialist nations such as Cuba and Nicaragua the majority of the housing stock is owner-occupied; and capitalist nations such as France, Holland, and Germany have provided compromise measures through mutual housing associations, owner-occupied public housing, and other forms of nonprofit ownership.

 

Homeownership is a loaded issue in the United States. It represents, variously, a speculative investment, a hedge against inflation, security of tenure, status, and, most importantly, a concrete realization of the American Dream–the ultimate proof that the system works. It is the lynchpin of the ideology that we are a “middle-class” nation. In this context, the struggle to protect and expand the existing stock of low- and moderate-income rental housing cannot ignore the issue of homeownership. Given the mythology attendant on individual homeownership, innovative proposals aimed at decommodifying housing which is owner-occupied have the potential to address the clear preference of Americans for this form of shelter and to undercut the individualist ideology it represents. At what point privately owned housing ceases to be a commodity, even under a not-for-profit ownership mechanism, constitutes a critical issue of debate. Restrictions on resale value are an evident starting point, as a trade-off for government assistance in the initial purchase; but these will hard to enforce in the context of housing scarcity which is of near global proportions in the industrialized world.