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The Trapped Renter

Of course I'm a wee bit biased, but my bias is fueled by my experience seeing the dramatic fiscal differences later in life between renters and homeowners. For the most part, those who have owned their home over extended periods of time are significantly better off than most renters. Now, our world seems determined to convince consumers that renting is good for them, and the circumstances we find ourselves in make it extremely difficult for renters without big savings and income to enter the ownership world. I know many renters who would love to buy, but simply cannot....

Here are some contributing factors:

1. Greed-flation combined with inflation has fueled the cost of homes - especially new ones requiring no additional capital/cash for renovation work - so that the options for entry level homes has fizzled.

2. Developers - fueled by a mix of greed/investor demand for building more profitable, more expensive homes - are more inclined to build the more affordable style of homes as rentals, fueled by inflation and masses of people moving from wealthier areas that caused rents to soar in many areas....producing substantial returns. Those returns are often more appealing than the profits made upon selling.

3. Many taxation policies/tax incentives encourage developing rentals, not re-sales, especially beneficial to large corporations and private equity entities. The value of depreciation, 1031 exchanges, etc are enormous. I know: I'm a landlord!

4. The tax policies do not sufficiently fuel responsible home ownership. They need to be revised to be more practical.

While we ignore/delay acknowledging the fiscal weakness of social security, we might want to see the benefits of Americans owning their home upon retirement and enact policies that encourage building and buying/owning homes rather than being tenants for life. How many people have you met whose primary means for retirement are in their home? Just how damaging is it to be reliant on a landlord for life? Many capitalists decry government 'control', but embrace landlord control? Hmmmmm.... Fixed rent for life owned - and paid for - by private entities or government is not the solution either.

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