From: jaa@mongoose.ess.harris.com (John Auer)
Subject: Re: Cost-Benefit Analysis of Renting vs. Owning
Date: Fri, 16 Oct 1992 22:26:46 GMT
Distribution: misc
Organization: Harris Corporation, Melbourne, Florida

acheng@ncsa.uiuc.edu (Albert Cheng) writes:
: 
: In article <samaddar.719184517@dumbo>, samaddar@siemens.com (Sumitro Samaddar) writes:
: 
: >So what is the catch? Catch is that Uncle Sam subsidizes these investments
: >towards a home by giving tax deductions on the interest component. IMHO,
: >there shouldn't be any tax deductions on home mortgages. A person is not
: >doing the nation any favor by buying a house. He is only doing himself a
: >favor. Why should he get tax deductions for that? Giving tax deductions
: >on homes diverts capital away from more productive investments, encourages
: >suburbs, long commutes, etc. etc.
: 
: I disagree.  First of all, most people want to own a house, a place you
: can nail a picture without written permission from the landlord.  So,
: tax deduction helps and politicians will bend backward to please the
: majority.  Okay, you don't like it.  How about this:  People owning a
: house are, in general, more willing to keep the neighborhood tidy, less
: willing to trash it, more cooperative with neighbors, less headache for
: local governments.  That stabilizes the neighborhood, everyone is bit
: happier, less wish to "express-the-anger (read riot)" which is good for
: the whole community.  So, the community (government) gives incentives
: for everyone to own a house, in return for less spending to clean the
: street, fight crime, ...

The fact that its the will of the majority doesn't make it right.  The
government should not be in this business (as well as many others...)
Most people want (expect) more out of the government than they put into
it.  This is just another manifestation of that attitude.  "I need to live
in a house, therefore, the government should help me pay for it."  Why
shouldn't the government also help pay someone else's rent?  Blatent
inequality.

As far as homeowners enhancing the community through the "inner peace"
homeowning bestows upon them, I think you're reaching a bit far...
There are plenty of homeowners who couldn't give a damn about the
condition of their yards, houses, abandoned cars, etc.  This can be a
significant source of conflict with those in the community who have
a vested interest (read homeowners).

I would also speculate that a large majority of domestic disturbances
occur between homeowning spouses (as opposed to renters).  Domestics
are a significant drain on police resources, as well as being some of the
most dangerous (read violent) situations officers respond to.  Does homeowning
lead to domestic violence? NO.  But they are homeowners nonetheless.  The
point is homeowners are not the happy-go-lucky crowd you picture them as.

One other point, any benefits that the community derives from homeowners
occurs at the local level (ie., should involve local tax incentives).
How is the federal government's burden reduced by these peaceful homeowners?
(And reduced by several thousands of dollar's per homeowner per year!)

Just another cost-ineffective government program.  The government "bribing
us with our own money" trick.


John