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But in general, I don't see how having lots of owner-occupied houses is a nice goal per se.

Why not?

It does bad things to your political culture. Also tends to blow up your financial system every once in a while.

Real estate taxes are the first line of defence against real estate bubbles (because they force people to put up real money to support the bubble valuation, even if their bank takes leave of its senses and offers negative-amortisation, no-money-down loans). So declining real estate taxes weakens your defence against real estate bubbles.

If you have lots of owner-occupiers it is electorally very difficult to raise real estate taxes, because raising real estate taxes will make homeowners unable to pay their bills. And you will, in a democratic system, occasionally have a right-populist government that enacts irresponsible tax cuts. So high homeownership builds in a structural advantage for macroeconomically illiterate right-wingers.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Jun 3rd, 2011 at 06:05:53 PM EST
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