But Swears you read Momus' blog right, I think he's definitely on to something when it comes to correlations between creative fecundity and a rent over buying culture...
I haven't read Momus' piece, but nevertheless there is indeed an increasing body of research linking high levels of home ownership with increased unemployment, with homelessness, with stagnancy, social retreat, and squalor. Just to take two recent examples:
Reducing home ownership cuts unemployment
Larry Elliott, economics editor
Friday September 28, 2007
The Guardian
Increasing the supply of rented homes is a better way to bring down unemployment than labour market reforms designed to weaken unions or weaken employment protection, Professor Danny Blanchflower, a member of the Bank of England's monetary policy committee, said last night.
In a speech in London, he said countries with the highest levels of home ownership had the longest dole queues, and that there was no evidence that deregulating labour markets was the cure for unemployment.
The MPC member said that despite calls from bodies such as the Paris-based Organisation for Economic Cooperation and Development for radical reforms of European labour markets there was no data to show a link between supposedly unemployment-unfriendly measures and the length of dole queues.
"Unemployment is positively correlated with changes in rates of home ownership," Prof Blanchflower said. "Of the major industrial nations Spain has the highest unemployment and the highest rate of home ownership and Switzerland the lowest unemployment and the lowest rates of home ownership. During the 1990s there were three European countries with unemployment rates close to 20% and these three had the highest home ownership rates (Ireland, Spain and Finland).
He added: "Higher home ownership raises unemployment, presumably because it reduces labour market mobility. Homeowners are relatively immobile, partly because they find it much more costly than private renters to move around."
I'm always amazed how certain theorists and academics become so convinced of the truth of their hypothesis that they unwittingly twist, distort, and engineer selective data-sets to bolster their theory: Ireland did not have 20% unemployment in the 1990s, on the contrary, by the late 1990s it had the lowest unemployment rate
in the world, labour participation rates having nearly doubled during that decade, combined with net immigration for the first time in the country's history. This, of course, does not undermine Blanchflower's thesis; rather, it is that his empirical evidence just misrepresents the underlying socio-economic dynamic: the vast increase in employment in Ireland during the 1990s (from 1.1m to around 2m) was largely filled by young people living either in rented accommodation or remaining in the family home, for the very simple reason that inflated house prices were completely beyond their means to acquire. The average price of a Dublin-based house increased from around €50,000 in 1990 to €500,000 in 2000, while wages averaged from €20,000 up to €40,000 over the same period, making home purchase impossible for young people (in the absence of very substantial parental assistance). Paradoxically, home ownership has actually
declined per capita (35% of the housing stock, alarmingly, lies idle/vacent, precisely because these properties were built purely as mindlessly speculative investments during the delirial property boom, as second, third, or fourth 'homes' by well-off equity-leveraging home owners). In other words, the thesis still holds, the larger levels of growing employment being associated with a decline in home ownership, and a greater proportion of workers living in rented accommodation. This does, however, provoke massive passive-aggressive resentment and social antagonism among younger people. As Dominic Fox
recently argued, "
The shed sold for three quarters of a million in central London stands in for every wretched hovel placed far beyond the reach of even the most financially masochistic nurse or schoolteacher. Resentment and anger seem eminently reasonable responses to such circumstances."
And
another recent study:
The public housing policies of many European countries promote home-ownership. It is argued that the best protection against poverty in older life is the ownership of a house and that owners are more likely to take better care of their dwelling and to invest in the immediate environment. There is abundant academic evidence against these arguments, especially for vulnerable groups of the population for whom the lack of resources make it difficult to sustain home-ownership and invest in the maintenance of their dwelling. FEANTSA believes, therefore, that home-ownership is not the one-fits-all solution to the complex problem of housing exclusion. The current housing challenges, such as the increasing levels of housing exclusion, can only be effectively addressed when there is a large enough social rental housing stock.
It is clear that rates of home-ownership do not always positively relate to the wealth of a country and its population, and that too high rates of home-ownership are usually unsustainable.
Countries with very high rates of home-ownership (around 90%), such as Greece, Bulgaria, Romania, the Baltic States, have to cope with deep and widespread poverty, also amongst homeowners. Countries with relatively low rates of home-ownership like Sweden, Germany, Switzerland and the Netherlands, are amongst the wealthiest countries in the world with rather low levels of poverty and housing exclusion. FEANTSA believes that, depending on the country-specific context, the rental sector should probably represent a minimum of 25%-30% of the housing market.
For some people, home-ownership will never be an option. The costs of ownership of an adequate dwelling - next to the mortgage payments, the costs of repair and renovation, and the price of energy - are often largely underestimated, especially by vulnerable people. The situation in several Eastern European countries, where poor home-owners who do not have any mortgage duties anymore are still accumulating housing related debts, is indicative for the limits and the danger of home-ownership.
And this, alas, is now the problem: the neo-lib privatization policies of both Sarcozy's France and Merkel's Germany will see a huge increase/move away from rental accommodation towards the reactive Thatcherite cult of home ownership. Will Scandanavia follow?