writing » Owning a Home & Generational Wealth

27 Aug 2022

As recently as last year, I thought I would never own a home and I was at peace with that. My wife and I lived in Oakland, where even small two-bedroom houses cost a million dollars, and we had modest savings. We are both paid well for what we do (working in education), but the cost of living in the area means it’s difficult to save money and certainly impossible to save up for a down payment. Then there are always devastating costs lurking, like when our dog was mauled on one of our regular nighttime walks and we suddenly had a five thousand dollar vet bill.

There is nothing wrong with not owning a home. I don’t think people have a right to property. People have a right to shelter. All scarcity (shelter, food, medical care) is an indictment of our cruel economic system. But I am privileged, I can pay rent, and afford good food, and afford fun vacations. We would never accumulate persistent wealth, and I don’t think my generation will get to retire (we will simply die on the job like honest drudges), but I was not living a bad life.

Then several things happened which decreased our ties to the Bay Area and created a desire to move to Oregon, where my wife’s family is from. On top of this, her grandfather died, leaving us a substantial sum of money. Grandpa worked on the railroad his entire life and retired at a regular age. He died an actual millionaire, owning two properties. This life path is denied my generation, as there hasn’t been real wage growth since the 1970s and housing costs have grown at a greater rate than inflation (thanks to the invention of housing as a financial instrument). Thus why I never thought I’d own a home.

With my wife’s inheritance, we asked some friends in Portland for a realtor recommendation, and we got a great realtor. He in turn recommended someone at my bank who was great with our mortgage process. My wife has summers off so she was able to fly up to house search with my Dad’s help, who is semi-retired. We found a great house and offered a substantial down payment thanks to the inheritance and financial assistance from family. Our interest rate is reasonable because my credit score is good, and it’s good because I never had to have that much debt as an only child who carried only moderate student loans. The mortgage and various paperwork was impossibly complicated but I have an education in numbers and we have relatives who are property owners to offer advice. Finally, I work on the computer side of libraries, so I’m able to work remotely, and my institution allowed me to move while keeping my job.

Returning to the main thread—Basically, a dozen things went right, and privilege paid off. None of the observations above would make homeownership possible without the inheritance money, though. The generational wealth of a working class GI generation man was essential. We have other friends our age with similar stories; someone died and that’s why they own a house. Our other homeowner friends tend to have exceptionally well-paying jobs or extra family support.

I do not understand how it is possible for people without generational wealth or an extensive support system to purchase property in America in this age.

Even with the interitance, we couldn’t stay in Oakland. I love Oakland. It is the greatest American city. It has a revolutionary energy. It has the best graffiti and murals in America (San Franciso is the only city that can compete). It has the most diverse population in the country, about a quarter each Black, Latin, White, and Asian, though that’s becoming less true as the Black population is displaced. Oakland has the best weather in the country. While other areas were oppressed by a sweltering heat wave this summer, it was 75 degrees with a slight breeze every day in Oakland for months on end. SF can be cold and foggy; Oakland is always sunny. Despite the outrageously perfect weather, there are no mosquitos, no real bugs of any kind. My friends will tell you I get angry describing the lack of bugs. It’s not fair. Every other place has its discomforts, whether it’s brutally cold winters or inescapably humid summers, but they also have insects that eat you and must be constantly battled. Oakland does not have bugs. It doesn’t make sense that bugs don’t like perfect weather.

I love Oakland, but we couldn’t stay. Even being able to perform an interstate move with three pets, and my wife’s job starting before we could move in, we managed because of our resources. The argument “if you can’t afford it (or don’t like it) there, then move” only applies to people who can afford to move. The way that security deposits work (you don’t get your old one until 21 days after you move out; you must make your new one before you move in) are stacked against renters. It is not possible for so many and so many families don’t have generational wealth and fewer and fewer are poised to create it given our country’s increasing wealth inequality.

But Eric, what can be done? We can make actually affordable housing, not a mere handful of below market units in a massive complex. We can make it illegal to use real estate as an investment. We can have exorbitant taxes on houses beyond the first. We can put people without housing into empty hotel rooms and empty houses (we already did during the pandemic, it works). There’s no shortage of things to do. There is a shortage of motivation from people in power, none of whom experience these problems. What’s more, home ownership is a major structural force in America’s class society. Since it’s the primary way that the middle class builds wealth, the middle class is ultra invested in property ownership, which leads to values that reinforce conservative politics. The idea of abolishing private property is terrifying to people whose identify is centered around homeownership, even though it is private property that is largely responsible for keeping people homeless, malnourished, and ill. There are solutions, they are just not palatable to either the ruling or middle classes, which explains a lot about the obstinacy of suffering in America.