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Own-to-rent

Scott Jagow Aug 17, 2009

No, that isn’t a new option at Sears. It’s a philosophical change that President Obama seems to be embracing. He’s planning to spend $4.2 billion to encourage some Americans to rent instead of buy their homes.

From the Boston Globe:

The idea is to pay for the construction of low-rise rental apartment buildings and town houses, as well as the purchase of foreclosed homes that can be refurbished and rented to low- and moderate-income families at affordable rates.

Analysts say the approach takes a wrecking ball to Bush’s heavy emphasis on encouraging homeownership as a way to create national wealth and provide upward mobility for low- and working-class families, especially minorities. Housing and Urban Development Secretary Shaun Donovan’s recalibration of federal housing policy, they said, shows that the Obama White House has acknowledged that not everyone can or should own a home.

This is no small shift. Think of how long the home ownership ethic has been pounded into the American psyche. More from the Globe:

“I’ve always said the American dream should be a home – not homeownership,” said Representative Barney Frank, chairman of the House Financial Services Committee and one of the earliest critics of the Bush administration’s push to put mortgages in the hands of low- and moderate-income people.

Conservatives, however, believe that President Obama and HUD shouldn’t head too far in the other direction; in some cases, rent can be more expensive than a mortgage payment.

That may be true, but the cost of a foreclosure is much greater to everyone involved — the home owner, the neighborhood, the economy — than an eviction. Besides, if you look hard enough, you can find good deals on rent.

For many, home ownership is still a better financial option. But owning a home doesn’t make you a better person, which I would swear is the message I’ve been hearing all these years.

More tonight on Marketplace.

While we’re on the subject of renting versus owning, I thought this was an interesting item from France:

Paris Mayor Bertrand Delanoë, building on the success of the city’s popular Vélib curbside bike rental scheme, is planning to deploy a fleet of 2,000 electric cars that customers can pick up and drop off at rental stands around the city. Another 2,000 vehicles will be offered in two dozen surrounding cities…

Advocates say the system would reduce carbon dioxide emissions by 22,000 tons a year while improving traffic congestion as fewer Paris residents would need to own cars. It would be the first major city to offer such a service.

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