Homeownership can bring out the worst in you

“Homeowner” is an identity baked into the fabric of America.

From political speeches to articles and advertising, Americans are bombarded with messaging valorizing homeownership. In 1995, President Bill Clinton released a 100-point plan to “boost homeownership to an all-time high,” writing that “for millions of America’s working families throughout our history, owning a home has come to symbolize the realization of the American Dream.”

His successor, President George W. Bush, made increasing homeownership a key policy priority of his administration, once explaining: “This Administration will constantly strive to promote an ownership society in America. ... After all, if you own your own home, you have a vital stake in the future of our country.”

Researcher Rachel Bogardus Drew points to more than a century’s worth of messages praising the benefits of homeownership, “everything from personal freedom and self-determination, social equality and inclusion, personal and economic success, and a better quality of life.”

One of the messages Drew cites is from a 1916 article in the Hutchinson News telling readers: “Owning a home raises one in the estimation of his neighbors and associates. ... Nothing gives a man a better standing in a community than the fact that he is a house-holder, a payer of taxes on real estate.”

There aren’t many other purchases that confer this aura of civic duty, and it’s worth examining the dark side of what happens to you when you become a homeowner.

Homeownership, as it has evolved in the United States, often turns its beneficiaries against progress and change, manifesting as anything from opposing homeless shelters in your neighborhood to blocking transit projects in your region. This identity transcends partisanship, a rarity in our polarized age. You’ll find Democrats and Republicans alike screaming opposition to change and growth, no matter what it costs. To that end, Republicans have supported onerous regulations they would likely scoff at in the abstract, and Democrats have defended a system that has perpetuated the racial and economic segregation they often rail against in theory. What can help explain this phenomenon?

A home is the largest asset the vast majority of Americans can ever own. Protecting its value is akin to protecting your family’s future — your ability to weather bad financial times, borrow if your kid needs help paying for college, or rest easy knowing that in a country that will leave you out to dry if you get sick, at least you can sell your house if it ever gets that bad.

And homeowners across the nation are finding themselves the villains in many stories: opposing a homeless shelter in DC, blocking Covid-19 testing centers in Connecticut and New Jersey, attempting to shut down a homeless shelter in New York, blocking a light rail train in Maryland, and delaying a 100 percent affordable housing project in the Bay Area.

Homeownership is supposed to mean security, opportunity, and a sense of investment in your community. But often, the pressure of tying your family’s financial security to one asset incentivizes homeowners to behave selfishly and antisocially, opposing important public works that could provide significant public benefits.

Homeownership in the 21st century is homeownership under scarcity

Homes are scarce.

One credible analysis found that the United States was short 3.8 million homes as of the fourth quarter of 2020, leaving millions of Americans overcrowded in their current living situations, paying increasingly high rents, and unable to find a starter home to break into the ownership game.

The problem has only gotten worse over the past year as the supply shortage became the primary driver of the chaotic housing market. At one point near the end of 2020, researchers found that the country had just 1.9 months supply of housing left. In simpler terms, if no new housing came onto the market, the nation would have run out of homes to sell in under two months.

In a newsletter titled “America’s scarcity mindset,” economist Noah Smith described the political effect of what happens when people are forced to live under scarcity: “Survival values, which supposedly come about because of economic scarcity, include ethnocentrism, xenophobia, fear of disease, and a hunger for authoritarianism. Sounds a lot like Trumpism, but I think you can also see echoes of this in various leftist ideologies and spaces.” He goes on to cite housing politics as the quintessential example of this phenomenon.

The most charitable reading of this behavior is that the failure of the United States to provide a social safety net for its residents has forced homeowners to defend the value of their asset however they can.

Unlike many things, the value of a home is largely dependent on subjective evaluations of things outside of the individual homeowner’s control. An individual can’t control for school quality or the crime rate or whether homebuyers will find their neighborhood aesthetically appealing. But all those things will affect how much they can sell their home for. And even if homeowners did control every policy lever available, the solutions for these problems are incredibly complex.

So to hedge against the possibility that changes in the neighborhood could harm the value of their largest asset, some homeowners will use whatever local levers they have available to them to block change in their communities, whether it’s new housing, homeless shelters, transit, or Covid-19 testing centers. This phenomenon is often referred to as Nimbyism (NIMBY stands for “not in my backyard”), and it often describes people opposing development or public projects in their area, particularly when they have no objection to the project when it exists somewhere else.

It’s a risk-averse strategy that can work, often not because there’s good evidence that these things would necessarily lower the value of their homes but because the effect is that fewer homes end up getting built. This exacerbates the supply problem, but for homeowners it ensures that anyone who wants to live in their neighborhood will have fewer options, thereby increasing competition and prices for the existing homes.

Stanford University researchers Andrew Hall and Jesse Yoder find that homeownership increases participation in local elections and that “asset investment may be an important mechanism for the participatory effects.” That is, purchasing the home and seeking to protect its value may drive people to become more involved in local politics.

And when they do, they fight policies that would provide for affordable housing.

Boston University researchers Katherine Einstein, David M. Glick, and Maxwell Palmer looked at planning board and zoning meetings in nearly 100 Massachusetts cities and towns and found that meeting participants were disproportionately homeowners. Participants also were more likely to oppose new housing in their communities than to support it.

There’s also a structural imbalance to the types of projects homeowners often oppose. People who benefit from new housing or transit or a Covid-19 testing center are a diffuse group. No one knows exactly who will be the direct beneficiary of a new home or a new bus line, but the people who might be annoyed by construction or have the value of their homes impacted are a distinct class. And that means they advocate and organize as a group in a way that the beneficiaries of these policies cannot.

A less charitable interpretation: Classism and racism

Opposing change and progress in your community is not only due to lack of a social safety net. Rich Palo Altans, wealthy Upper East Siders, and the Boston elite all exhibit the same traits of Nimbyism that I described above. The wealthy do not need a social safety net, so why are they so opposed to progress?

The aforementioned Boston University researchers also looked at the types of comments made by meeting participants who were opposed to new housing and found several commenters who feared that “their homogenous communities would resemble much more diverse ones if a project were approved.” They cite a commenter who asked if there would be restrictions to ensure people receiving rent assistance from the government could be prohibited from occupying the potential development.

This type of rhetoric is not uncommon. The San Francisco Chronicle documented a man in the Bay Area worrying that affordable housing might turn his area into a “ghetto.” Others called the proposed homes “high-rise slum[s]” that would “become the best place in San Francisco to buy heroin.”

As part of an attempt to make it harder for lower-income people to live in the Cleveland suburb of Bedford, the mayor said “we believe in neighborhoods, not hoods,” and that students walking down the streets “are predominantly African American kids who bring in that mentality from the inner city where that was a gang-related thing by staking their turf. We are trying to stop that.”

More common are the allusions to “neighborhood character,” which is an amorphous term that could mean something very anodyne or sinister. As St. Paul, Minnesota, City Council member Mitra Jalali told Rewire: “People who use coded language like ‘neighborhood character’ and ‘historic preservation’ are participating in structural white supremacy that has historically and presently mostly valued white ‘character’ and white ‘history’ at the expense of everyone else.”

It’s not that homeowners somehow have an exclusive claim on classism and racism — it’s that the median homeowner is likely to be older and wealthier than the average US resident. Older and wealthier people often have a preference for stability; they’re closer to retirement and more likely to be facing medical needs, as they are later in life. That means this group is predisposed to fear change even more than the average person. And they are overrepresented in our political system.

None of this is meant to be an indictment of people who want to become homeowners. But it’s a warning about how it could affect your thinking and politics. Because while there is some rationality to the fears that drive homeowners to oppose growth and progress in their communities, there is also a massive cost.

Economists have measured the loss of aggregate growth as a result of restrictions to housing supply to be roughly 36 percent — the average worker could have made roughly $3,600 more absent some of the restrictions that local officials have placed on housing development. Blocking affordable housing and public transit also serves to segregate Black and brown communities that are purposely priced out of low-poverty neighborhoods. And the lack of transit in the densest cities could be costing Americans roughly 10 percent in aggregate economic growth.

And the neighborhoods these homeowners are seeking to protect? Perhaps their bet will pay off and when they’re ready to retire, they’ll be sitting on a nest egg. But perhaps instead they will watch their kids grow up and leave, unable to afford rent. They may see community businesses struggle to support themselves as workers leave for other opportunities, unable to continue justifying living an hour away from their job and spending that entire time stuck in traffic. They may even find themselves unable to afford their rising property taxes after they’ve spent a lifetime paying down a mortgage.

Pro-growth policies are what allow for economic opportunity. And America’s failure to provide a reasonable social safety net and its deference toward the interests of homeowners at the local level has undermined those policies at every turn.