What is My Man Felix Smoking?

I totally agree with my colleague in blogdom, Felix Salmon, that the subprime mess is more messy than Ben Stein allows. But Felix, who I greatly admire, goes too far when he takes on the benefits of home townership in general. The financial benefits of home ownership are myriad--wealth creation, tax deductions, capital gains exclusion, etc. The social benefits are less well known but documented in terms of crime, health, childhood stability, etc. A Joint Center for Housing Studies at Harvard analysis of the data in 2000, for instance, showed the benefits for kids to be myriad, even when adjusting for income, neighborhood, etc. This is not to say, of course, that life in an apartment can't be grand and that life in a home with a mortgage is never miserable. But there are good reasons for home ownership. I've blogged before that our current system, especially the home mortgage deduction, subsidizes something that doesn't need a subsidy and we ought to think about getting rid of it, although probably not at a time of massive default. Anyway, the financial and social benefits of home ownership explain why so many people want in. Fix the subprime mess and make sure it doesn't happen again but don't pretend home ownership is irrelevant. Even if home ownership weren't given so many tax subsidies it would still have an intrinsic appeal.