Home ownership may be good for the community, but in my opinion adds to the
unemployment problem. The reason is that often people cannot relocate to
another area to take advantage of new employment opportunities. Home ownership
then becomes a drag on employment opportunities. Renters can usually give their
30 day or less notice and leave. Home owners have to sell their home often at a
loss in order to be able to afford to relocate. Since real estate values are
stagnant, even selling at the original purchase price will cost about 7% in
sales costs. For example a $200,000 home, sales costs will will be around
So all the homeless folks have great jobs?
I found the final statement of particular interest. "Oswald said the
research may go some way to explaining why Spain, with a homeownership rate of
80 percent, has unemployment above 25 percent, whereas Switzerland, with a 30
percent ownership rate, has a jobless rate of just 3 percent." I
believe this is a flawed argument. There are extreme cultural differences at
play here. For example, a recent study on "honesty" dropped
wallets with ID and money in major cities around the world. In the U.S., 8 of 12
were returned. In Spain only 2, and Portugal only 1. Also the economies of these
two countries are radically different. While the rest of the article was thought
provoking, the statement at the end was a big stretch. Taken to it's
logical conclusion, one could predict 0% unemployment with 0% homeownership.
There once was a place like that 70 years ago, and over the entrance was the
phrase "Arbeit Macht Frei", or "Work Makes you Free".