I love squatters. Thought to be fading into history as a self-conscious class, these intrepid refuseniks have not made much news for the past decade or thereabout. So when a friend sent me a link to a Time/Moneyland story about a new breed of squatters, I couldn’t wait to see what they were up to.
Despite being ridiculously titled “Is America Becoming a Nation of Squatters?” (hyperbole much?), the piece by Tara-Nicholle Nelson starts off good, introducing the phenomenon of squatting and the seemingly anomalous legal concept known as “adverse possession”, a doctrine under which in some states squatters can acquire legal title to real property simply by residing on it without permission for a certain period of years (usually ten). This is interesting stuff, and over the generations, lots of housing activists have made the case that squatting is a valuable social phenomenon. (Not a hard case to make, given that people need housing and so much of it is vacant.)
Nelson then introduces a “new class of squatters” — homeowners who default on their mortgages but stay in their houses. This is not exactly a social movement, and it’s kind of a no-brainer (if you’re broke but not yet being physically forced out of the structure you call “home”, where all your stuff is… why would you leave?), but it’s an interesting socioeconomic phenomenon, if you will.
What really threw me for a loop was the writer’s conclusion. I honestly did not see it coming. Nelson — notably a lawyer and a real-estate broker — suggests that this “squatting” phenomenon may be adversely affecting the housing market because it could taint Americans’ attitudes toward what she calls “the inherent rightness of paying for the right to live in a place”.
WOW! What a phrase, and what an overarching idea.
My objections are manifold. First, people cheerleading for housing values to rise again need to sit in the corner wearing a “real-estate agent” dunce cap. Second, people who suggest rights can be bought should sit in the corner with a “lawyer” dunce cap on. Third, get real — there is (unfortunately) no real “threat” of an attitude shift toward access to real property. Fourth, even if there were such a prospect, its impact would probably be immeasurably small, given that it would come up against the reality of how property is treated in our society. And it would only serve to anchor housing prices in ways that aren’t all bad.
Let’s take the philosophical point first and dispense with this notion that one can purchase rights. There is sadly no right to housing in this country. One can purchase the legal prerogative to occupy a dwelling either by obtaining deed or lease. Otherwise, with few exceptions, one has no expectation of any legal or even philosophical right to shelter. Overturning this would be a good thing; maybe not for the real estate market, depending on how it was implemented, but definitely a win for the human condition.
On to the threat of an attitudinal shift anchoring the housing market, which Nelson considers unhealthy. She writes:
I suspect this harm will manifest most evidently in consumers’ mindsets, as widespread squatting threatens to upend basic, important social beliefs about the inherent rightness of paying for the right to live in a place. If consumers perceive that a primary advantage of being a homeowner is that you can stick around for years without making a payment, strategic default and foreclosure rates might never decline back to their pre-recession rarity.
[…] The real danger is to our social norms and financial belief systems which, in turn, threaten a lasting recovery and future prosperity.
Economic recovery and (material) prosperity are indeed tied to the housing market. When the housing bubble predictably burst in 2008, the consumer credit system took a massive hit. Our economy is 70% consumer-driven. It depends on growth, and growth depends on credit. So while the stagnant housing market is probably (for now) holding back severe inflation as the Fed pushes a credit- and government-spending-based recovery dependent on an increased currency/reserves supply, that same moribund market is holding back the real flow of consumer credit. This everybody acknowledges.
Where onlookers differ is in the real social quality of this anchoring effect. First, the more affordable housing is, the better off society is, generally speaking. That’s not an economistic view — it’s just another of my pesky humanistic views. If our economic system gave a damn about sheltering Americans, we would be happy to see a gentler rate of increase in housing costs.
But besides this, holding back growth in a society that has too much housing (however misallocated) and too much consumption in terms of resource use and pollution/greenhouse-gas output, is not in and of itself a bad thing. An economic system that causes suffering when aggregate production contracts or even slows will tempt all of us to cheer for growth. But growth has severe consequences; it is not inherently good. The cost of ameliorating present economic misery for working and unemployed Americans may build in too many problems associated with overconsumption. These will hurt down the road. Severely.
The housing market needs never to return to unsustainable growth. It is amazing that this has to be said in a post-burst world, but apparently some people haven’t figured it out, including self-interested homeowners and real-estate brokers. As long as credit is made readily available and energy costs are artificially low (as they do not include the real environmental and social costs of hydrocarbon-based production and consumption), there will be a tendency for real estate prices to bubble, not just threatening sudden harm to the economy again, but also excluding poor people from decent housing.
This is why the notion that attitudes of entitlement to housing will hurt the market is absurd. First, this attitude isn’t going to come about by some spontaneous collective realization. It would take an organized social movement to reevaluate the concept of housing as a right (that can’t be purchased).
Besides, the market has too many systemic upward pressures; nuances that tamp it down have an upside, even if it really sucks for people who made poor real-estate investment choices in the last decade. We really don’t want to reinflate the bubble just to give those bad investments new life and prop up the credit-based overconsumption frenzy that put us in this sad state to begin with.
Now back to philosophy for a moment. This is just my own belief, to counter Nelson’s appreciation for the idea that people should pay market prices for the “right” to occupy a home. Shelter is a human right, and anyone who contributes to society should have comparable access to stable, secure, desirable housing. Shattering arcane notions that a suitable home is a privilege one must purchase would be good not just in terms of anchoring the housing market, but to transform this society into a halfway decent alternative.
Cartoon by Carol Simpson.