Homeownership and Suburban Sprawl

(Photo: Roger Wollstadt)

A new paper from economist (and city-loverEd Glaeser argues in favor of a reevaluation of government policies towards homeownership.  The abstract:

The most fundamental fact about rental housing in the United States is that rental units are overwhelmingly in multifamily structures. This fact surely reflects the agency problems associated with renting single-family dwellings, and it should influence all discussions of rental housing policy. Policies that encourage homeowning are implicitly encouraging people to move away from higher density living; policies that discourage renting are implicitly discouraging multifamily buildings. Two major distortions shape the rental housing market, both of which are created by the public sector. Federal pro-homeownership policies, such as the home mortgage interest deduction, weaken the rental market and the cities where rental markets thrive. Local policies that discourage tall buildings likewise ensure that Americans have fewer rental options. The economic vitality of cities and the environmental consequences of large suburban homes with long commutes both support arguments for reducing these distortions.

Glaeser concludes by arguing in favor of “slowly lowering the cap on the interest deduction” in order to discourage the exodus to the “sprawling suburbs.”

(HT: Free Exchange)

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  1. SuburbanDad says:

    The article did not say whether it thought moving to the suburbs is good or bad, but I get the feeling the author thought moving to the burbs is a negative.

    A rebuttal.

    Suburbs are less hectic, with more green spaces, have larger and usually better parks that are less crowded, and have a variety of unique opportunities not available to city dwellers. Crime is almost always lower in the suburbs. Parking is free or inexpensive. Gas is cheaper. Schools are on larger campuses and are often newer and in better condition.

    To many, suburban life is what you do when you’ve had enough of the hectic city life, and want a more relaxing, peaceful, expansive lifestyle. Grill often, play ball in the yard with the kids, sit on a deck with friends while the birds serenade you, play poker and watch sports in a man-cave basement, take long bicycle rides on safe, beautiful paved trails, and enjoy the greenery all around. The city is just a drive or a train ride away when you want some urban flavor and a top shelf cultural experience, such as a museum or a show.

    I’m sure other folks can paint a wonderful picture of post-20′s life in the city.

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    • Enter your name... says:

      Suburbs are less hectic… except when you’re rushing everywhere because you have to drive to almost everything.

      They have larger and usually better parks… except that NYC’s Central Park is much larger, and most suburban kids can’t get to those “larger and better” parks without an adult driving them there. An unused park is not “better” in my books.

      Parking is free or inexpensive… until you factor in the externalities. You should read The High Cost of Free Parking by Donald Shoup.

      Gas is cheaper… which is a good thing, because you’ll need more of it.

      Schools are on larger campuses… which means that fewer kids can walk to school, because just walking from one corner of the school’s property to the other corner could be a quarter of a mile, so even kids who live fairly near he school are less likely to walk to school.

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      • J1 says:

        No, suburbs are still less hectic. Rushing everywhere on your own schedule is less hectic by definition than doing so according to someone else’s.

        A single gigantic public park does not a trend make. There’s at least one park within walking distance of my house that’s nearly the size of Central Park (albeit lacking the surrounding high rise buildings and abandoned restaurant with a souvenir shop) and several (some larger than CP) within 10 miles. Suburbs have bigger parks, and there are more of them.

        Do we really have to read a book written by some suburb-hating academic gasbag to know he really, really hates suburbs (and, evidently, free parking).

        Cheaper gas is a bad thing?

        Urban schools suck. That alone is reason enough to move to the ‘burbs. If driving your kid to an exponentially better learning environment isn’t worth it to you, it’s pretty obvious you don’t have kids.

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    • city and burb says:

      When I leave the city, I relax. But I love the city. Cannot afford both. So living in the burbs is a bit of a compromise. ….the secret success of my burb town. The schools are known to be good and people flock to the burbs for the schools. Many rent. What I don’t understand is — what happened to city schools. My guess- things have not changed all that much. He went to one of the specialty schools. And succeeded because of city schools. There, he learned about art, art history and cultivated a love for painting. Perhaps his art will be exhibited at the library soon. He is real modest when it comes to his work, but also opinionated when it comes to getting it just right.

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  2. twobeef says:

    I haven’t the time to go looking for the source so YMMV, but I seem to recall studies saying that the homeowner interest deduction didn’t even help a large swath of homeowners who most could use it, on account that they took the standard deduction on their tax forms and couldn’t claim the extra benefit anyway.

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    • Enter your name... says:

      You take the standard deduction if it’s higher than your itemized deductions would be. I’m not sure why you think that people who get more benefit from the standard deduction are those “who most could use” an additional deduction. For example, the person who owns a home free and clear (about a quarter of all homeowners) presumably is in a better position to pay taxes than someone who is making mortgage payments.

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  3. homebuye says:

    ya see, the thing is- when you find your dream home- you work at getting it. Husband is happy, daughter is too, and I am feeling blessed, we are feelin great- but am nervous about selling house I grew up in- it will be taken down if a buyer does not come foreword. Today is open house day- need a bit of luck.

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  4. homesowner says:

    There was a comparison made of the situation here in America and in Europe. The point was that as land becomes scarcer, it becomes more valued and there is a likelihood of property ownership becoming more feudal like. Wow- does that make real sense. But we here have yet to grasp it. I guess as it becomes harder and harder to take out a mortgage and, therefore easier and easier for educated with jobs to buy a home and get a reasonable mortgage, the value of ownership will go up as will prices. I know someone who decided not to sell because she was not getting close to what she assumed was her home’s value. What she did not know was that she can buy a better house for less and so increase her equity in her house by selling for less. I have reason to think there are others who have grasped the situation.

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  5. SuburbanDad says:

    Suburbs are less hectic… except when you’re rushing everywhere because you have to drive to almost everything. *** (Be smart – combine your trips whenever possible and it’s amazing how much driving can be cut down)

    They have larger and usually better parks… except that NYC’s Central Park is much larger, and most suburban kids can’t get to those “larger and better” parks without an adult driving them there. An unused park is not “better” in my books. *** (Central Park is one of the rare exceptions. So is Grant Park in Chicago. Heart of downtown. Not family residential areas. We’re talking about the rule here – Central Park West is also not exactly a community for the average family. Most New York families don’t even live in Manhattan. Does Brooklyn and the Bronx and Queens have beautiful, safe parks in walking distance of most residents? We live a block away from a large neighborhood park – baseball diamonds, soccer fields, playsets, basketball courts, tennis courts, which are continuously in use – and a block away from the elementary school and the middle school and a few houses away from the community pool. About 6 blocks from the branch library. Over 1,000 homes, mostly families, are within a 800 yards of the park/pool area, and other great parks are scattered all over town, centered in residential areas. You can choose your home’s location, so if you want to be near a park, buy a home near a park.)

    Parking is free or inexpensive… until you factor in the externalities. You should read The High Cost of Free Parking by Donald Shoup. *** (As noted earlier, those who combines trips will see how much less they will drive – in the city you take cabs at a huge per mile expense – or deal with filthy public transportation that may only get you within a mile of your destination).

    Gas is cheaper… which is a good thing, because you’ll need more of it. *** (as do cabs for city folk who need to go places and can’t get close enough with public transportation)

    Schools are on larger campuses… which means that fewer kids can walk to school, because just walking from one corner of the school’s property to the other corner could be a quarter of a mile, so even kids who live fairly near he school are less likely to walk to school. *** (this is so not true, at least in my town. Kids ride bikes, carpool, or take a bus when too far to walk – the school is not on one corner of the property. Stop trying to make it look like a large campus with lots of space for outdoor activities is a bad thing. A cramped campus with mostly asphalt/concrete outside is the far worse option.)

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  6. Pons says:

    I am a minimum wage worker, but I also have a facination with the ways cities are laid out. The problem with suburbs is that there is nothing in them but houses and yes, they are way to sprawling. We separate commercial and residential areas to an extreme level, and that is creating more poverty in itself. What we have done is create job desserts, forcing people to spend more, on gas. I live close in because it saves on transportation costs. I just cant afford to drive that far to work, no matter how cheap the rent is. The closer I live to my job the cheaper gas and insurance is. Because I drive an older truck, its also risky. What if my truck breaks down? So what, I just walk. What suburbs need are commercial zones, nothing loud or too big, a few stores and some quiet little work shops, offices and studios. A lot of people are moving to self employment anyway. Instead of looking at changing taxes, or increasing density, (I like it, but its not for everyone), look at creating mixed use zones and inserting denser commercial zones on the edges of suburbs so people dont have to commute as far to work. That will even out the traffic, level housing prices and lower pollution levels.

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  7. Steve Gibson says:

    A few notes of thought to consider:
    Theres a bit of sociology imparted in the question. A pro-apartment bias takes the macro view that society is better off if we pollute less, live closer to work and city centers (and ride bicycles like the Chinese)

    Reasons apts suck:
    1. no neighborly bonds
    2. people who are in apts are there only because they can’t afford to have a house (excepting the very few places like NY, NY where apts can have status attached)
    3. there is statistically much more crime in areas where apt buildings are clustered.
    4. an apartment offers no equity and often carries a higher price tag than a home with mortgage payments.
    5. Who in the world would want to have neighbors immediately above, below and on all sides.
    6. Apartment occupants contribute nearly zero to manfufacturing sector(no place to put uyour stuff!). Occupants somewhat contribute to the service sector (bars, restaurants, nail salons).
    Reasons homes are better:
    1. You can put your home far away from that nasty apartment filled part of town with it’s check cashing joints and pawn shops.
    2. You have equity.
    3. Overwhelmingly schools are better and safer in the suburbs.
    4. Less crime.
    5. You have equity (not to mention land and a room for your stuff).
    6. Owning a home asks you to give more to your community (yard improvements, painting,contractor work), and is better for the economy (durable goods, cars).
    7. Once it is paid off you own it aside from the money you owe to the government each year for the privilege of owning it.

    Living in an appartment is a step above serfdom when you consider all the above, is it not?

    Economic incentives will do little to change the flight to the suburbs as a plurality of Americans (myself especially) see city life as dirty, unpleasant, unsafe, and with deteriorating infrastructure and horrible schools. It will only be seen as an unjust tax that will not deal with the issues that drove us out of the cities to begin with. Not that those on the left won’t try.

    Oh and here’s one more reason I’ll through in: The home is just the first of many items for a family to secure… afterwards comes college funds, cars, new drapes and lawns, etc etc. and having to pay for all those things forces the individual to innovate, and be both productive and creative, drink less and work more in short to increase their own value measured in salary (a HUGE intangible).

    Don’t renters already get a “renter’s exemption” already from the IRS? seemed to me it was soewhere between $300 and $800.

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  8. Derrick in Los Angeles says:

    i live in a tiny one bedroom and have for 20 years. I have no air conditioning and no privacy. i can hear my neighbors through the walls and i can hear my downstairs neighbor snore loud enough that i can’t fall asleep. the people on the other side of me are two college d-bags that like to have beer parties and leave their empties in front of my door.

    Yeah, i don’t give a rat’s ass what any study says. I’d love to have a home of my own and some Air conditioning and privacy. The people talking don’t buy a home often have a house already or some nice spacious affordable apartment with soundproof walls.

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