More on housing finance – class status
I want to add another aspect to yesterday’s post concerning ways to make housing finance easier and cheaper that goes beyond just interest rates or down payments or unearned rentier income. It’s the issue of class status.
A high cost of housing is a form of red-lining that very efficiently separates economic classes and allows for clear displays of status. While segregation is no longer allowed based on race, there’s an obvious link as any visit to an American city will attest. But even if class today is completely based on “merit”, it’s undeniable that we still live in a hierarchical society.
A meritocracy simply means that jobs are filled based on qualifications; it doesn’t at all speak to what degree, if any, income should vary. Meritocratic socialist egalitarianism and a vastly unequal hierarchy based on “merit” are both internally consistent forms, although it’s nearly impossible to square the latter with democracy.
So, any significant leveling of inequality, especially in something as status related as housing, represents a direct confrontation with the existing system of meritocratic hierarchy. Lifestyles and neighborhoods that were once affordable only to a certain “meritocratic” income class would suddenly become available to lower, less “merit-worthy” workers.
I wonder how many liberals there are out there who often speak against inequality in the abstract but would oppose ideas such as discussed yesterday because they would directly confront the usefulness of housing as status.
There can be little doubt that the housing interest rate extraction industry based on Wall Street serves functional purposes beyond the simple channeling of rentier income. And that the status quo has very deep roots.