fdr.jpg (6836 bytes)

 

 

An American Paradox

By Will Baker

I spent the past few days in our nation’s capital. While I was there, in addition to enjoying the spring flower blossoms and getting a dose of art, culture, history and science, I had the occasion to attend a very interesting talk given by Ray Suarez, a talk show host for National Public Radio. His thesis was that, although we can point to the fact that our country is currently experiencing the highest home-ownership rate in our nation’s history, there are some negative aspects to this distinction that could be contributing to a serious polarization within our society.

Due to their economic circumstances, it seems that many of the folks who wish to own homes, are still unable to do so. But the new twist on this old theme is that many of those that have purchased their piece of the American Dream have become "house-poor." House-poor: this is a curious phrase, for these days there is a new variation on this theme as well. Due to liberalized underwriting guidelines, banks have been willing to loan more money to folks than they would have in the past, and with less money down. According to Mr. Suarez, the relaxation of these ‘debt to equity ratios,’ and down payment requirements have had more of an effect than simply removing disposable income from the pockets of the buyers. For he argues that these homebuyers are purchasing something in addition to more house than they can afford. They are buying the ability to insulate themselves from the poor. For these days, we see a concentration of the rich and poor, each in their respective enclaves. In the past, most neighborhoods were comprised of folks from a broad range of incomes, living side by side. And it doesn’t take a rocket scientist to see the positive benefits that could accrue from this arrangement--all of their varying perspectives, as a result of their different life experiences, blending together. For instance, I can easily see how tolerance for others could develop as an attribute of this type of community. But sadly, those neighborhoods are becoming a thing of the past.

This is not meant as an indictment of these folks, these homebuyers reaching for that brass ring. No, I am quite certain that the majority of these citizens are good folks, striving for the American Dream and all that it implies. But I do find it interesting how our views towards home ownership as it relates to this dream have changed over the years. In the past, a house was looked upon as a place to live, not as an investment. But over the years, due to rapid appreciation we have sometimes come to expect upwards of four hundred percent appreciation in value at resale. That’s a great return on investment, enough to finance a retirement or college education. Therefore it seems to me that it’s no wonder why folks decide to become house poor. The problem is that while that strategy has served a previous generation well, there is no guarantee that it will continue to do so. In fact, in some places, it has stopped working entirely, if the investment strategy ever worked there at all. However, sacrificing the short term for the long term is a rare thing these days, and it’s good to see. Now Mr. Suarez didn’t acknowledge that point, but I would hope that as articulate and enlightened a man, as he appeared to be, he would agree with the statement. So while I do not fault them for why they do it, I do fault some of these homebuyers for the results of their actions.

Yes, Ray Suarez is very concerned with the apparent polarization of our society, and the ensuing negative effects. And it seems to me that I have to agree with some of what he said. For example, he points out the fact that in our country, public education is financed primarily through property taxation. And due to the concentration of the poor to specific areas, without the broad range of incomes spoken to above, these modest communities simply do not have the resources available to fund a decent educational system for themselves. And as we all know, the quality of a school district directly affects surrounding property values. This is just one example that he cited, of issues effecting this equation, which he argues, furthers the polarization. His words made me think about how something as "safely good" as the goal of home ownership might also have a downside. And I am reminded yet again how complex and surprising even the "givens" in life can sometimes be.

You know I have been at the task of writing essays for a while, but I continue to be amazed at my readership. I know for a fact that folks from all around the world read these essays. Therefore I am quite certain, that at some point some woman or man who lives in a "gated" community will probably read these words. And as you do, from behind your walls, safe and secure from those "other people," I ask you to please consider that we all must contend with the consequences of our actions. I am not indicting you gentle reader, no… in fact I am grateful that you are taking time out of your day to read the ramblings of this hack internet writer. But really, it seems to me that we shouldn’t create, even unintentionally, a "caste" system in this country. For if we do, then we will be making a mockery of the ideas articulated in our Constitution. And speaking of my readers, for you folks from abroad: here is your chance to examine a true American Paradox, and to decide for yourselves if the words engraved on the statues and monuments which, I visited recently in our Nation’s capital are being made hollow by our actions…

 

 

 (Essay Collection)