About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

84 Ind. L.J. 189 (2009)
The Myth of Home Ownership and Why Home Ownership is Not Always a Good Thing

handle is hein.journals/indana84 and id is 191 raw text is: The Myth of Home Ownership and Why Home Ownership Is Not Always a Good Thing A. MECHELE DICKERSON* Home ownership is viewed as key to achieving the American Dream and is now an essential element of the American cultural norm of what it means to be a success. The metastasizing mortgage crisis suggests, however, that our home ownership policies are out-dated, misguided, and largely ignore the actual market realities many potential homeowners now face. After briefly describing the current home ownership crisis, this Article argues that the United States should radically revise and restrict home ownership subsidies. Rather than encouraging universal home ownership, the Article argues that the government should replace existing home ownership subsidies with targeted subsidies that will help buyers make housing choices that are based on economics, not emotions. INTRODUCTION Home ownership is said to be a fundamental part of the American Dream because of the economic security it gives homeowners. The United States has long encouraged people to buy their own homes and has subsidized programs and activities that are designed to bridge the gap between renting and owning a home. Unfortunately, buying a house is no longer an option for many lower- and middle-income consumers; the purchase is often a high risk financial venture that has large, and frequently unarticulated, opportunity costs. Buoyed by the irrational exuberance associated with home ownership, potential and existing homeowners are now guided by emotional and psychological-not economic-factors when they consider investing in a house. This irrational exuberance has resulted in one of the worst foreclosure crises since the Depression. Rather than question whether the American Dream of home ownership remains a goal worth pursuing, however, the current responses to the mortgage crisis are designed to help homeowners remain in their largely unaffordable homes. This Article argues that these and other U.S. home ownership policies are outdated, misguided, and virtually ignore the actual market realities most lower- and middle-income potential homeowners now face. Part I of the Article discusses the rhetoric associated with the American Dream of home ownership and lists the benefits and subsidies the United States provides to encourage home ownership. Part II of the Article discusses how escalating housing prices and stagnating income has forced lower- and middle-income consumers to rely on nontraditional mortgage products in order to finance their mythical American Dream of home ownership. The U.S. government encouraged financial institutions to innovate these often risky products, and the secondary market's voracious demand for these products encouraged mortgage originators to approve loans that were not suitable * Fulbright and Jaworski Professor of Law and Associate Dean for Academic Affairs, The University of Texas School of Law. My special thanks to comments provided by participants at a workshop at Emory Law School and for research and editorial assistance provided by Sarah Barr, Jane O'Connell, and Claire Chandler.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most