PRIDE GOETH BEFORE....

Next to having children or getting married, owning a home may still be the biggest and brightest hope you can have. HGTV abounds with programs about loving young couples buying a house they could call their own. The myth of home ownership has come to characterize safety, security, and success. What a myth!

Perhaps I am moved to write this because of the chaos in the American marketplace; chaos that originated with the deeply embedded urge to “own” - a hallmark of stability and pride. Say all you want about the creative bookkeeping of an Enron, or the unshakeable belief in the marketplace being self-regulating, the fact is that Americans, and Canadians, are convinced that home ownership is the start of real stability.

I believed it once. Even during the years when my career took a slide we clung to our home. My bank manager told me, when I discussed the burden of the mortgage, that keeping a house was not just a matter of economic reality, it was a question of “did you want to own your home? Did it give you comfort? The answer used to be yes. It was the wrong answer. I had been trapped by the myth of home ownership. Only transients rented. Real people owned. Stable for the kids. A good investment. All that stuff.

It was that primitive urge, more than any other financial move that led to the collapse of the banking system and the near death of the American economy. On one side were the people who believed devoutly that owning a home was the ne plus ultra. And there were the money-lenders who were all too eager to indulge that passion for home ownership. President Bush babbled about the “ownership society.” Billions of dollars, trillions perhaps, were risked in the home-buying market. Greedy “investors” snapped up securities that were bundles of bad mortgages. The country was awash in debt and went to its near demise believing that home prices could only go up.

Now even more chickens have come home to roost as the greedy seem to have done even more harm to the gullible. America continues to be proud of its banking system while that infallible system puts the freeze on foreclosures. Thousands of homeowners may have been improperly booted out of their homes.

The real story is not the greedy versus the gullible. It is not the blind faith in a system that threatens to destroy itself. It is with the myth of ownership. The American Dream insists on owning a home, even if it is a cookie-cutter box at the end of many miles of four lane super highway. The truth is that bankers and developers thrive on the myth. The only person who does not come out ahead is the gullible home buyer.

Because of the economic crisis there are now millions of Americans, excluding those who have become homeless, who are renting their homes. At last, a tragic crisis has made people see the light. Why for heaven’s sake, do you mortgage your future for home ownership? For those who say “I’m tired of paying rent and having nothing to show for it,” I have this advice. Stop pursuing that dream. Rent. If you think owning makes economic sense you are kidding yourself. The mortgage you assume is a debt that must be paid. Instead of renting a house you are renting the money to buy a house. And you are tying up most of your capital. You are “mortgage-poor.”

I was one of you. We owned only one house and lived in it for forty-one years. Our children grew up there. We lived on a street with other similarly smugly self-satisfied home owners.

We sold. We invested the proceeds. (The only conundrum is the unanswerable: would we have been farther ahead financially if we had rented and invested the money in another kind of security?) We now rent. We care for the property as if it were our own. If the roof leaks or the air conditioning goes on the fritz, we make a phone call, not to a roofer or an air-conditioning expert, but to our landlord.

There is simply too much capital tied up in an immovable resource. It makes no sense. But the myth will persist.