Are we destined to become a nation of renters?

Some folks at the Wall Street Journal are discussing this - tell me what you think.

I believe the rental market is always an important housing solution but the American Dream remains home ownership. Right now we're experiencing a painful correction in the housing market that brings us back into a more normal balance between ownership and renting. The reality is that it takes a certain amount of financial stability to successfully own a home. And there's a certain percentage of a population that does not have that stability even in less fractured financial times. When young people start out, when one's income is not at a certain level, when you are moving and uncertain exactly where you want to live, renting is the way to go. But home ownership? That continues to be the American Dream and a good solid investment when the time is right. We won't see that disappear.

What Wall Street is talking about is a family's shrinking financial ability to own home (long term housing prices rising faster than incomes), but there is another issue that leads to the same conclusion. We are continually getting more people, but the land is not proliferating to keep up. In fact, we have the same amount of land we had since annexing Alaska and Hawaii. Therefore, living situations HAVE to become more dense. The most buildable land is already under buildings; what's left is increasingly marginal. Add to that the fact that we (as a people) have a growing appreciation for having some preserved land around us, and the physical reality will have to be increased housing density - i.e., multifamily buildings.
Secondly, the "American Dream" is largely a marketing fabrication of the real estate industry. We have been constantly told by them that we are not rich unless we own property. ...that we cannot have a stable community unless we have the "pride of ownership." Neither of these are absolute truths - though they both have slight tendencies toward it. If they were absolutely true ,then how do we account for the now blighted neighborhoods where hundreds of "homeowners" have fled? Can we truly say that those who lost their entire wealth (home equity) in the recent housing crash are ANYricher than those who lost theirs in the stock market decline?
We need to recognize that increasing population requires the responsible among us to quit trying to market 2500 sf of house on 6000 sf of land as "the American Dream." If THAT is the dream, then it is time we all woke up.Nehemiah Stone

Both of you make excellent points, thank you. I would add a couple of thoughts:

1. The "American Dream" has morphed into a "right." This is the thinking that got us in big trouble, facilitating the purchase of homes by people that could not afford them. I would add that if you are essentially being given something, it's not much of a dream to work hard to achieve.

2. Nehemiah is spot on with the observations about density! It is somehow culturally bred into Americans that density is bad. We need to change that thinking. I have been bloodied up more times than I can count in a rezoning meeting just because I wanted higher density - often times, the product I ultimately delivered was higher value than the single family stuff that surrounded it!

Cheers!

Here's the URL that started this discussion:
m2hgroup.wordpress.com/2009/08/18/renter-nation/

Best,

Marty

With the ongoing recession and economic slump caused by real estate downfall it seems that is not far from reality. This does not only affect the US but the whole world who's also relying on US economy and the dollar. I hope that this situation would be better soon for the good of all.