A home, or a ball and chain?
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RELOCATING in pursuit of new jobs is an American tradition, but the Census Bureau reported recently that a lower percentage of Americans moved in 2008 than in any year since the government started tracking such data in 1948. The finding was partly predictable: Amid a recession, there aren't many jobs available. With the obvious exception of those who lose their homes to foreclosure, people have fewer reasons to move.
Yet the numbers also raise another disturbing possibility. When there are job openings, the nation's high rate of homeownership is an obstacle to filling them. After the collapse of a massive, debt-fueled housing bubble, workers will have trouble selling their homes, even if they do receive job offers elsewhere.
The percentage of US families that own their own homes peaked at around 69 percent in 2004 to 2006 and has since fallen off by only a percentage point or so. But recent developments shed light on the role that homeownership, for all its other benefits, plays in tying people down - and hint at the costs that it can impose on the economy.
For families, owning a home has long been viewed as a means of accumulating wealth. Yet the gains in homeownership in the first half of this decade often came at the expense of sound lending and borrowing practices. The assumption that housing prices always rise has destabilized the financial system.
And as housing values plunge - by as much as half in cities such as Phoenix - homeownership can become a burden. When people can't sell their homes for anything close to the original purchase price, they may stay put even when their interests might lie in moving.
A dramatic illustration comes not from the current recession, but from flood-ravaged New Orleans after Hurricane Katrina. Urban planners urged the city to concentrate redevelopment and public services in the least flood-prone areas. But there was never enough money available to buy out the mortgages of the homeowners who lived in heavily flooded areas. Thousands received just enough insurance money and federal aid to restore their existing homes, and had no other realistic option.
Most of the time, of course, homeownership means more stability, fewer absentee landlords, and more civic participation. But if nothing else, the excruciations that borrowers have suffered during the housing crash have made it harder to portray homeownership as an unalloyed good. The possibility that it might also freeze up the labor market offers one more reason to crack down on sketchy lending practices that ensnare people who aren't meant to be homeowners. Workers need to be free to follow jobs, wherever they might emerge.
