Economics/Class Relations

Own Nothing and Love It

By Joel Kotkin and Wendell Cox

From the ancient world to modern times, the class of small property owners have constituted the sine qua non of democratic self-government. But today this class is under attack by what Aristotle described as an oligarchia, an unelected power elite that controls the political economy for its own purposes. In contrast, the rise of small holders were critical to the re-emergence and growth of democracy first in the Netherlands, followed by North America, Australia, and much of Europe.

Today the current class of small holders face a threat from two powerful hegemonies, tech and financial interests, and increasingly intrusive bureaucracies. Both favor policies that would force higher population densities, which would likely raise housing costs and lead to lifetime renting for middle income households who would otherwise own their own homes. These forces—one long associated with the right, and the other the left—share a common agenda, though for different reasons.

Financial interests would reap a steady profit stream by creating a “rentership society,” where potential owners are transformed into tenants, guaranteeing the benefits of increasing land values. Today pension funds and Wall Street firms are buying up single family homes, often at prices too high for the average buyer. For their part, the planning clerisy believes that dense urbanism is socially, economically, and environmentally superior; some even favor a return to public housing, which not long ago lost was rejected as a massively failed experiment.

Density Delusions

For much of the recent past, density advocates insisted that the public, particularly the young and educated, wanted out of private single family houses. But in virtually every major country the vast bulk of people have chosen suburban and exurban locations—in the U.S., Canada, UK, Australia, and Western Europe, including London and Paris, as well as Toronto. Even New York City, with its surprising increase since 2010, has gained only 900,000 residents since 1950, while the suburbs have grown more than six million. Some density advocates see high house prices as reflective of economic prowess, but suburbs account for the largest share of new jobs in both Europe and the U.S., where suburbs dominate new patents.

For years, surveys have consistently shown that the majority of Americans of every generation prefer a single-family home with a yard over living in a condo or apartment. Two thirds of millennials, before the pandemic, favored suburbs as their preferred residence, and they overwhelmingly place priority on homeownership, in fact more than earlier generations. Moreover, since 2000 minorities have accounted for roughly 96 percent of suburban and exurban growth.

These preferences have only been strengthened by the pandemic, which generally hit hardest in urban areas with overcrowded housing, stressed transit, as well as entrenched poverty. Realtors report a growing interest in suburbs, leading to strong price increases occurring in the suburbs, and exurbs. This is a global phenomenon, with people heading to the periphery not only in Australia but also in France, Canada, the United Kingdom, and elsewhere. France 24, a government owned international television service produced a program on the pandemic related exodus from Paris. The pandemic has also sparked a surge in prices for less dense parts of Britain.

Work from Anywhere

The rise of remote work suggests this shift may be just starting. Globally, some 80 percent of workers expressed a desire to work from home at least some of the time with nearly one-third of employees would prefer working remotely full time. A poll commissioned by Bloomberg found that 39 percent of employees would consider quitting if “their employers were not flexible about remote work.” Overall, according to a recent Upwork survey, as many as 14 to 23 million remote workers may relocate as a consequence of the pandemic, largely to more affordable, generally less dense places to live.

The conversion of the high-rise office space into what urbanist Richard Florida describes as the “the last relic of the industrial age“ suggests a future more likely dispersed than concentrated. The shift to remote work covers a large part of the workforce which historically filled high-rise offices—media, analysts, programmers, marketers, and designers.

When the pandemic ends, a “residual fear of proximity” and the preference for less commute time will mean that roughly 20 percent or more of all work will be done from home, almost four times the already-growing rate before the pandemic. Another study from the University of Chicago study suggests as many as 34 percent of American workers could do their jobs remotely; in Silicon Valley that number approaches 50 percent.

Read the rest of this piece at American Mind.

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