Opposition to the Obama Administration's mortgage bailout plan continues to snowball. The latest group to object? Renters:
All we hear these days is whining from reckless home borrowers and their banks.
But did you know that renters are 32 percent of American households? And that homes in foreclosure are less than 2 percent?
So why is Congress rushing to bailout high-flying borrowers and their lenders with our tax dollars?
Unfortunately, renters aren't as good at politics as the small minority of homeowners (and their bankers) who are in trouble. We don't have lobbyists in Washington, DC. We don't get a tax deduction for our rent and we don't get sweetheart government loans.
Quite simply, we are just Angry Renters. And now it is our time to be heard: no government bailouts!
I must say, this group doesn't have my sympathy; they have my empathy.
I am 46 and I have owned a home (or rather, held a mortgage) for 11 years. From the age of 19 onward I was a renter, with no thought of buying a home. I was pretty certain that my educational background and career choice would never earn enough income to support a mortgage, so I continued to rent.
Finding a safe, decent neighborhood to live in is very difficult for a low-income renter. I would have loved to rent a small place in a modest homeowning neighborhood, but opportunities like that are few and far between. Homeowners tend to view renters with suspicion; mixed rent-and-own neighborhoods are rare.
I experienced that predjudice anew when my husband and I were looking at houses 10 years ago; after viewing one home, we stepped out on the sidewalk and a family member who had come along sniffed, "But, look! You'd have to deal with the renters next door!"
Apparently this person had forgotten that my husband and I were, at that moment, renters ourselves.
This sneering prejudice toward renters has always seemed nonsensical to me. People rent because they are smart enough to realize that they can't support a mortgage. Maybe their work forces them to relocate regularly. Maybe they are just out of school and concentrating on establishing their careers before buying a home.
Maybe they just don't like to mow lawns.
People like to say that "you have nothing to show for all those rent payments." Balderdash. If you have a decent landlord, that monthly check buys you plenty of perks:
1. Repairs. Broken toilet? Not your issue. Call the super. You don't get the bill, either.
2. Security. If you live in a well-run apartment building, you are surrounded by neighbors who have as much at stake in building security as you do. You probably see certain neighbors in the hall or parking lot on a daily basis; you get a feel for the rhythm of each other's lives. You notice is something is 'off', if that creepy person by the dumpster seems out of place.
3. Mobility and independence. Don't like the place? Just got a new job? Pay up for the month and move, no questions asked. No heavy property investment hanging around your neck.
Of course, there are bad landlords and they can make your life miserable: never fixing anything (I once went without a toilet for a month before I finally moved out in disgust) or creating such onerous rules that you're afraid to mist a houseplant, let alone ask to paint a wall.
If you're a low-income renter, the neighbors aren't always a ray of sunshine, either. (The woman who lived next to me was abruptly taken away by Federal agents one time; I never found out why.)
And if you are a low-income renter with a crummy landlord, you could come home one day to find your rent suddenly jacked up several dollars- but, really, how different is that from today's ARM loan adjustments?
Being a renter did not make me a fool or irresponsible or a loser. At least, not at the time.
These days, I can see why renters would feel like losers and fools.
The real estate market needs to right itself. It has been inflated beyond belief for over a decade. The little house my husband and I finally bought sold for $60k. The last time it was appraised- just before the meltdown- it was approaching 100k. Hey- we like our place, but even we knew that was nonsense.
House prices should be allowed to find a realistic floor. I'm no economist, but it seems to me that continuing to prop up the more exotic or extravagant mortgage arrangments will only keep housing prices artificially inflated.
You know what happens when you have artificially inflated house prices? You lock responsible owners out. Sensible, self-aware renters are going to take one look at the market and say: I could never afford that, just as I once did.
And who does that leave? Speculators. Or gullible dreamers who can be suckered by predatory lenders.
Maybe if the government wants to help some homeowners they could agree to wipe the bad mortgage off their credit record and give them a voucher for a decent rental unit until they got on their feet again.
And when housing prices have shrunk back to size, maybe they really can afford a home.
Until then, I hope the nation can cultivate a more positive attitude toward renters. Right now they look like the ones who made the smart choice.
Just sayin'.
Update:
It appears at least one person agrees with me:
"A person paying rent and with the flexibility to move to where there are jobs is better off than one anchored to an underwater mortgage in a town with high unemployment, even if the lender has to go bust in the process.
Prices of housing in the U.S. were driven too high by too much leverage even as supply increased. Let's accept that, allow prices to fall, the banks to fail and start again on a new stable footing."
Read the whole thing. He says it better than I did.
Recent Comments