Imagine walking down a quiet, tree lined street waving to neighbors that you’ve shared your life with for 20 years. As home owners you watched your kids grow, borrowed a lawn mower a time or two and even hired the local teenager as a babysitter. There was an ingrained stability living with the invested class. This imaginary street is reminiscent of what people formerly enjoyed. Since the early 1990’s stability has been slowly dismantled by the renting invaders. They come to enjoy your street and stability yet the lawn is no longer mowed. The Sunday morning conversations become distant stares or a nod. The Norman Rockwell picture disappeared with rising costs of home ownership, generational shifts and corporate ownership. The other side of rent control isn’t just helping the underclass, it should be focused on helping the invested class.
Ownership Is An Investment, Not A Privilege
Home ownership is a complicated and lifelong investment from saving for the down payment to roofing repairs, central heat and air to mowing the lawn. Owners invest time, energy and money. Nationally, taxes, water bills and municipal fees have grown faster than inflation consistently degrading owner investment. Since the Great Recession homes on tree lined streets became temporary living quarters while home investments sank into negative equity. Homes in formerly great communities such as Dolton, Illinois are plagued with transient and careless renters diminishing the quality of life. To cure the ills of “investless” communities, home owners must receive compensation for their lack of stability and equity.
Rent control legislation should calculate the home values before the wave of renters and adjust to inflation and compound interest. If rents are controlled at a minimum of what assessors believe a community is worth at the present, home owners investments are forever lost. A quality of life adjustment, similar to that of a quality-adjusted-life-year, depicting a communities health must be decided upon by home and business owners by referendum before rent controls can be discussed for a vote. The lifelong investment of home owners, majority are middle and lower class, must be compensated for true communal equity.
Millennials Are Late Investors
Our current generation of America’s working and investing class, are not privy to home ownership. Millennials are voluptuaries-always searching for the finer things in life. As they grow into mid-adulthood, they begin investing but in an anti-rent control type of way. They are the newest migrants of demographic inversion-gentrifying neighborhoods at record rates turning cities richer and whiter. Even as they join protests to support rent controls, they’re paying an average of $2000 a month in rent. The traditional, tree lined streets of the middle and lower class neighborhoods are becoming too expensive for lifelong residents. Rent control legislation must be aligned with pre-inversion realty assessments.
A solution can also be found in new construction. If an older building is torn down to create a condo building or a single family home they must secure a price that aligns with neighbors. A condo cannot be $450,000 nor can a single-family home. Eventually, these new buildings depreciate with age leaving neighbors with astronomical taxes reflecting a lack of depreciation. Legislation must control the prices of new homes in accordance with pre-inversion as well. If rent controls are to help people, they must help those being priced out of their investment. Not everyone is happy to lose their neighborhood to the Millennials who are turning neighborhoods into hipster centers just because they’ll receive an astronomical sale for their home. For those that want to stay, controlling construction, taxes and assessments for real value must be a focus.
As the Great Recession’s effects are still toiling away in the housing market, corporate owners became the new landlords. Single family homes from the suburbs to two-flats in the cities are owned by Wall Street, not the lady down the street. These corporate takeovers leave the invested class dealing with renters again instead of people. If we are to return neighborhoods back to stable places for families and communities to grow, home ownership programs through corporate rent to buy programs is the answer. These new home owners could be protected through an FHA loans as well. Owners need stable and invested neighbors, not Wall Street.
Future of Housing
As the home ownership still struggles to regain trajectory with most people renting, the government must find solutions for the invested class to flourish. The inability to have a cohesive community movement for stability harms owners on the local political level as well. If a majority of your block or community is owned by big money or renters, who will support progressive legislation to protect owners?