Jenny Schuetz - "Renting The American Dream" - Brookings - February 13, 2019 -
Read the article here.
With misinformation like "parking a large share of your wealth in a single piece of real estate is not an optimal investment strategy" it makes me wonder if the writer is even aware of the real Fed statistics:
"Household equity is the principal source of wealth for middle class households; without it, many would struggle to build much wealth at all. The median net worth of an American homeowner is $231,400, according to the Federal Reserve. That is more than 44 times the median net worth of renters, which is $5,200. The median net worth of homeowners surged by an inflation-adjusted 15 percent from 2013 to 2016, according to the Fed, while renters actually became poorer over that time."
Or maybe the writer listened to City of Minneapolis Director of Long Range Planning Heather Worthington at the famous Ward 10 VFW meeting where she told us "homeownership was outdated" and we'd "need to find new ways of building wealth." When pressed by a constituent on what exactly those new ways might be, she said she could not advise. In her words: "I am not an economist."
Despite the overwhelming evidence on the benefits of homeownership, Minneapolis wants a city full of renters. They say they want equity and to eliminate racial disparities, but there's nothing equitable about encouraging a city full of people paying landlords and not building personal wealth. There is nothing fair about wiping out starter homes (naturally occurring affordable housing) and catering to developers looking to bring in all those market rate apartments. Sorry Ms. Schuetz, but this closing argument is a big stretch: "Current policies favoring homeownership are not only unfair to renter households, they fall short of the nation’s capacity for wealth building." Ms. Schuetz and Heather Worthington should stop writing policies that take away wealth-building and homeownership if they have no clue about what could possibly replace this for middle class Americans and Minneapolitans.