Mood of the Market
Mood of the Market
On the British Broadcasting Corp. website the other day, this headline caught my eye: "Social tenants in England to get wider home swap choices."
From what I gathered in the article and the research I gathered in fewer than six degrees of clicks outward from it, social tenants are those who live in government-funded or assisted housing in the U.K. -- the equivalent of residents in American housing projects.
So, I read on about the British government's new "housing swap scheme," or plan, in which these social tenants will be allowed to register as interested in moving to another type of social housing, or even to another area, and will be allowed to simply trade homes with other social tenants.
Many tenants and even one of the country's largest private providers of social housing applauded this new plan, which the government has been pressured to create for many moons, apparently. The private housing provider had, in fact, already implemented its own internal version of the program, to resounding success.
Apparently, British social tenants have always been required to stay put in order to retain their government housing benefits. This has caused some households to stay in a long-blighted area, in cities with few employment prospects, or even in homes that no longer fit their families' needs -- in the vein of longtime Manhattanites clinging to $900 rent-controlled apartments.
The government had caved to the rationale that the home-swap program would encourage, rather than discourage, social tenants to move in order to find work, after which they could be transitioned into the private housing market. But one woman who lived in one of the homes able to be swapped by its corporate owner raved about the experience.
The woman told how her oldest children had grown up and left home, and she was still stuck in a too-large place in a destitute area, far away from her younger children's school. She swapped for a smaller home with a young mother just starting to raise her family, for whom the move would put her closer to family.
More importantly, though, the move was a clean slate. She'd lived in the same town for nearly 40 years, had been laid off from her job and had experienced an acute episode of agoraphobia.
"Sometimes you need a new start and this gave me a chance to do that. It was an opportunity to make a change." She elaborated, "Once in social housing you feel like you are going to be stuck where you are forever. What I didn't realize was there is an opportunity to make a change."
And apparently, the move worked. "Since we've moved my health has improved immeasurably and I'm actively looking for a job," the mother reported.
Here in the U.S., we so often assume that housing's interaction with socioeconomic mobility is centered around whether or when one can afford to move from renter to buyer. With the recent recession, though, the popular understanding of that calculus became infinitely more nuanced and complicated.
Many who can afford to buy homes are now electing to rent -- some until the price is right, others indefinitely. Additionally, we've seen that homeownership without equity, without income or with an unsustainable mortgage (balance or payments) can be more economically burdensome than beneficial. For this reason, it's increasingly crystal clear that until the job market recovers, the real estate market will languish.
The idea that the simple location of a rented home -- even a government-subsidized home! -- can so greatly impact your life and your chances of thriving is profound. Maybe it's bigger than that, though.
Maybe it's simply the ability to exercise some level of control over where and in what sort of home you live that these folks find so liberating and powerful, especially when you'd been operating under the impression you were trapped in your status quo.
The private housing company that owns much of Britain's public housing and had pioneered the swap system had an interesting perspective on the subject of housing and its role in its residents' lives, from which we might be able to borrow some insights.
Its corporate credo is tailored around the mission to help people max out their "life chances," German sociologist Max Weber's concept of the opportunities -- the chances -- that any given person has to improve the quality of their life.
Next week, more on how the life chances model rationally fits into a lifestyle-enhancing, real estate decision-making model, and the irrational efforts at maximizing life chances that occur so frequently when we Americans buy, sell and finance our homes.
Daily market update: Sept. 2, 2015
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