Many organizations and governments are again touting homeownership as the path to economic security and wealth creation. I have my doubts. The wealth generated for people who own homes is not wealth out of thin air, nor is it wealth out of moral superiority. It is wealth out of exclusion and externalized costs. Every day, the gap among homeowners, and renters, and unhoused people grows, and the structure of wealth accumulation depends upon this gap.

As we, as a society, come to realize that we cannot continue to subsidize single family homes and their development pattern that requires large amounts of infrastructure, huge amounts of driving, and an impoverishment of cities, the single family home will lose value. This is hard to believe, given the exponential increase in home prices, but it will happen. As has been said by many others, the suburbs will largely collapse of their own weight, of their permanent debt burden. See growth ponzi scheme. Some will survive by changing their form and becoming small towns within the bigger city, but most will not. Detroit is the fate of most suburbs.

So, when the reckoning comes, and the American dream of homeownership comes to an ignominious end, what then is the alternative?

I’d like to propose small business ownership as a better model. No, I have no illusions that small business ownership is easy, or that it is any quick path to wealth. The business owners I talk to would find this laughable. But the wealth that is gradually accumulated is real wealth for the owner and real wealth for the community. It does not need subsidized infrastructure. It does not need an expensive transportation system and associated harms. It may need a small boost from the government, at times, but largely it survives and thrives by being part of an ecosystem of a healthy (and wealthy) community.

Some people claim that homeownership is the way to erase the disparity in wealth between white people and people of color. I’ll let the people of color speak for themselves, but for me, nothing about the current system or the proposed system of widespread homeownership looks likely to erase the gap. In fact, though it may bring a few people from the renter category into the homeowner category, it will very likely cast the rest downward into struggling renters and unhoused. If the government spends money to increase homeownership, as seems the politically preferable action these days, what then of the unhoused? What then of renters? What then of people who live in substandard and deteriorating housing, whether they own it or rent it?

I believe that government should stop subsidizing, and stop promoting large developments and large businesses. Large developments and large businesses seek government support in order to make what they do more profitable, but it is at the expense of the rest of us. This is nowhere more clear than in our transportation system, which was designed, and continues to be designed, to support large corporations and large shopping areas (malls), to make possible long distance commuting which is necessary when we separate single homes from work, shopping and recreation, and which destroys both the general environment on which we depend and the local communities that suffer from this system.

All efforts should instead be focused on small businesses. What do they need to succeed? What small government actions would support them? In this, I am completely aligned with the Strong Towns message: