The True Cost of Home Ownership

By now many have debated what got the current financial problems started. I'm not going to wade into those waters. It's crowded enough.

But clear government policy (whether implicit or explicit) of getting as many people into houses as possible regardless of means to pay for those houses has a great deal to do with it. This is not "blame" the victim.

In general, house owners are what make a community a community. No insult to renters intended but generally renters move from place to place with no real ties to the locality. The permanence of a house ties you to the locality and inspires (if not forces) you to have a deeper stake in what happens locally than someone who may be here today/gone tomorrow. As such, promoting house ownership is generally a good public policy.

But when that ownership is encouraged for the mere sake of ownership that's what causes this kind of trouble. Politicians love to use the term "means testing" when it comes to various financial aid and incentives. Well, like it or not, house ownership is itself a form of "means testing". You need to have a certain level income, assets and maturity/discipline to own and maintain a house. The reality is that if someone can not afford to purchase a house on their own chances are very good they also can't afford to operate and maintain it.

House ownership is much more than just a mortgage payment:

Property taxInsurance
UtilitiesWater/Sewer charges (in many areas)
Maintenance and repairs (even a brand new house will need work more sooner than later)

Then there are the countless unforeseen events of life. Damage from a storm or an accident, appliances breaking down, or as the insurance companies like to say "Acts Of God".

Owning a house is expensive. Even if you own your house free and clear of a mortgage you will still have all these expenses and more. So even just giving a house to someone is not the solution.

Promoting house ownership is a good policy for a nation. But it should be a wake up call to our society that, as with most good things in live, something good comes with it personal responsibility.

And that is something also in very short supply in our nation these days.

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