The proponents of renting argue that home ownership should not be promoted since it slows the economy by tying the work force to one location. To encourage a fluid, adaptable economy, people must be able to pick-up and move to find jobs. Evidence from both Europe and the United States indicates countries with a more even balance between home ownership and renting have lower unemployment rates and better mental health and satisfaction among their citizens than countries with very high home ownership rates.
Proponents of homeownership argue that it promotes social stability and community involvement. People who own homes are more likely to maintain their common areas and seek to improve local schools. Children of homeowners are more likely to excel academically and graduate from high school.
While homeownership proponents acknowledge that homeowners are less mobile than renters, they argue that people already prone to stay in one place are influenced by this desire to purchase a home. Homeownership is a result of preexisting community roots, a sign of a chosen lifestyle rather than the catalyst for it.
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A combination of post-boom housing factors, including damaged credit and insufficient employment has made home ownership unfeasible for many would-be home buyers. For others, especially the younger Generation Y, the employment opportunities and local amenities of urban life have caused them to favor renting over home ownership.
The direction of California’s future housing market will impact the future of real estate practice. Will there be a shift in the client base from sellers and buyers to landlords and renters?
Agents: Let the scholars know what you’re seeing first-hand in California’s housing market by joining the debate online. The Economist is currently soliciting votes and comments. The debate closes September 26, 2012.
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