"the cult of home ownership is dangerous and damaging" Financial Times article.

[Brendan Burgess]

A great article in the Financial Times yesterday

Well worth reading in full, but here are the key points as I see them.

Policies to increase home ownership do not necessarily improve the supply or distribution of housing, as the UK experience demonstrates, and often works against it.


The mass movement of voters’ savings into an inherently risky asset also creates demands on policy makers to provide capital gains on housing that their constituents otherwise would not receive.


The promotion of such ownership is fundamentally regressive. It perpetuates inherited wealth and subsidies of middle-class children


rises in the home-ownership rate in a US state are a precursor to eventual greater rises in unemployment. Home ownership damages employment through three powerful channels:

• decreasing levels of labour mobility
• increasing commuting times
• diminishing creation of businesses.

 

[Brendan Burgess]

It's a very interesting issue. I am surprised that policies to increase home ownership don't increase the supply of housing. Maybe they only increase the price of houses.

Say the government introduced a subsidy for buyers of new houses. Presumably the supply of new houses would rise. Prices would rise as well, but overall it would be more profitable for house builders to build more houses. I am not suggesting that the government should introduce such a subsidy, I am just wondering what the effect might be.