For starters, the ability of regular folks to buy a home is a relatively new phenomenon in the timeline of American history. "As recently as the 1930s, fewer than 40 percent of adults in American households owned their homes," says Robert Hockett, a law professor at Cornell University in Ithaca, N.Y., who studies organizational and financial law and economics. Only after the Hoover and Roosevelt administration made regulatory changes in the home mortgage industry did the homeownership rate go up.
The housing bubble also exaggerated the rate. From a high of 69.2 percent in 2004, the share of Americans who own their home has fallen to 66.4 percent, which is still a percentage point or two above the rates that predominated from the mid-1960s through the mid-'90s. Renting, meanwhile, appears to be on the rise. With some 39 million rental households already, the United States is poised to add another 3.6 million households by 2020, according to a recent study by the Joint Center for Housing Studies at Harvard University in Cambridge, Mass.
The debate over which is better for community well-being – renting or owning – comes down to stability. The long-held notion is that owners have a stake in the community and therefore contribute to making it a safe, clean, and pleasant place to live. According to Mr. Hockett, this theory is overblown.
"Lots of people rent because they can't afford to buy, but that doesn't mean that they aren't responsible members of their community," he says. "What really matters is whether they think of themselves as stakeholders. What determines whether you think of yourself as a stakeholder is how long you plan on staying. If you are there for the long haul, you're a stakeholder. If you're transient, you're less so."