Homeowners and Civil Engagement

According to The Wall Street Journal, the home buyers’ tax credit initiative (U.S.) was “intended to help spur housing sales” by offering financial incentives to first time home-buyers and certain repeat buyers.

However the initiative encourages “excess mobility”, suggests Edward Glaeser, a professor of economics at Harvard, and this is something we should not be promoting. Why? Less-mobile homeowners are good citizens due to their greater civic engagement than those who move residence often.

One of the reasons for subsidizing homeownership is the widely held belief that homeowners are good citizens. Ten years ago, Denise DiPasquale and I wrote a paper investigating the links between ownership and civic behavior. Controlling for income, education, age and other variables, we found that homeowners were 16 percent more likely to vote in local elections, 11 percent more likely to know the name of their member of Congress and 10 percent more likely to say that they have recently worked to help “solve local problems.”

But we also found that almost one-half of the effect of homeownership disappeared when we controlled for the time that the person had lived in the home. Owners are typically much less mobile then renters, and people who stay put are more likely to become civically engaged.

If you think that civic engagement is important enough to justify homeownership subsidies, then we certainly shouldn’t be encouraging excess mobility.