'Rent' Is Not A Dirty Word

Owning a home. It's what everyone strives for. There's something about owning your own house that says you've made it. It's a bedrock tenet of the American dream ... right? Well, try telling that to President Obama.

The Boston Globe reports that the president is planning to use $4.25 billion in stimulus dollars to subsidize rental housing. It's a far cry from the Bush era push to create an "ownership society" in which owning a home was a path towards the middle class. All you had to do was sit back and watch the value of your home increase. Many were enticed into borrowing to achieve this dream — including many who couldn't afford it. And we all know how that turned out. Obama's plan should open up more affordable options and help people see that they their living choices should be sustainable.

Even more, it might help take away the bias many have against renting. Marketplace interviewed Edmund Phelps, Nobel Prize winner and economist at Columbia University, who said, "In strict money terms, there is no reason to think there is a systematic, long-run, sustainable, durable difference between the two" because as a renter, you don't pay interest or maintenance costs. Phelps also makes the point that many have used the increased equity in their homes to just spend, spend, spend. Maybe the collapse of the housing bubble should teach Americans a lesson that the dream perhaps is not to own a home and accrue material goods, but to get back "to the older idea that the American dream is having a career, getting a job, and getting involved in it, and doing well. That was the core of the good life." Think Phelps is all talk? Think again. He rents.

Photo courtesy of Extremezine, via Flickr