An area where the left and the right find agreement is in housing. The right seems to be against housing because it is subsidized and is used by the government to advance social policies (i.e. affordable housing). The left seems to be against housing because detached dwellings consume more energy than high density dwellings. As a consequence the sacred cow of mortgage interest deductions appear to be on the chopping block. The politicians can say that in these days of large deficits, everything is under scrutiny. The truth of the matter is that the politicians are just looking for more sources of revenue. What makes housing an attractive whipping boy is the housing bust caused as much by cheap credit fostered by federal reserve policy than by subsidies, affordable housing and fannie mae. Even the Wall St Journal says that the main purpose of housing should be shelter. However, homeownership has been one of the main vehicles for wealth building in America. Homeowners build equity that can be used for kid's college education and for retirement. Traditionally, the growth in equity has been a superior investment vehicle for Americans. However, homeownership also means other things to most Americans who opt not to live in high density areas like Washington, DC and New York City. It means privacy, space, peace and quiet. Since the bursting of the housing bubble, house prices should fall to a new equilibrium level just like any other investment. Then it will start to grow again. The positive benefits of homeownership will continue with or without all of the government interference. However, for those in DC and New York who are forced to live on top of each other to insist that those of us who prefer to live amongst trees with room for our dogs to run are somehow either bad for the business environment or the green environment are simply jealous and trying to impose their inferior lifestyle on the rest of us.
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com