Regulatory risk models for building a global economic leader























Desperately Seeking Nuance

By William Devine

May 2003



2010 Note:   The global financial crisis engulfed us in part because we overvalued real estate. As we try to work our talents into more advantageous economic circumstances, how can we--i.e., the government, the housing industry, and the house-buying public--keep ourselves from repeating this error? We can start by dismissing anyone who refuses to acknowledge the difference between a house and the American Dream.

You can't turn around in the real estate industry these days without tripping over someone who believes that buying a house buys you the American Dream.

Fannie Mae, for example, wants you to “achieve the American Dream of homeownership.”

The National Association of Realtors opposes legislation that might decrease ownership of houses because it “effectively [closes] the door on the American dream.”

Angelo Mozilo, Chairman, President and CEO of Countrywide, declares in a speech at Harvard that the company’s mission is to bring people “the American Dream of Homeownership.” The speech is entitled, "The American Dream of Homeownership: From Cliche to Mission."

The Bush Administration calls its plan to help minorities buy houses “The Blueprint for the American Dream.” On page one of the Blueprint, the administration defines the American Dream as the ownership of a house. Congress calls the Blueprint’s central legislative proposal “The American Dream Downpayment Act.”

At first glance, this house-equals-Dream message appears to be an oft-copied but harmless advertising gimmick.

Look more carefully, though, and you see that it coats the real estate industry and the government in a film of dishonesty, and reflects a disturbing disregard for the average citizen’s future.

Consider a family that wants to buy a house. Perhaps one member wants to run a construction firm, raise an educated child, and help an aging father. Perhaps another member wants to write a novel, develop the family’s sense of spirituality, and run a marathon, while a third member wants to make a video with Pooh Bear and be the author of a comic strip.

Will buying a house constitute the American Dream for these people? No, because for each of them, the American Dream is the sum of all of his or her unique aspirations. The genius of America has always been that it’s a land of unmatched opportunity, and the point of the American Dream has always been that it’s what you make it. It’s not a mass-produced item purchased off the rack. It’s a special order good.

Will buying a house guarantee these people that they live their American Dreams? No, because a construction company, a novel, a spiritual life, and a comic strip are not fixtures that arrive attached to a house.

Will these people be precluded from living their American Dreams until they buy a house? No, because their Dreams extend far beyond ownership of a house, and because in America, you can devote effort and attention to helping your father, running ten miles a day, or writing a video script regardless of whether you are white, black, Hispanic, Catholic, lesbian, old or renting.

So when politicians and real estate pros claim that buying a house buys us the American Dream, the only people to whom they tell the truth are those who want to own a house and hold no aspirations related to the cultivation of talents, family, health, education, spirituality, charity or anything else. One suspects this is a limited audience.

Because the house-equals-Dream message carries so little truth, its repetition by the pols and pros carries unfortunate consequences.

Say the family described above really wants to purchase a certain house but after several rounds of counteroffers, the seller still wants $35,000 more than the house is worth. What if an untimely hit of the house-equals-Dream campaign convinces them in the stress of the negotiation that they are living a discount life without a house, and causes them to overpay and to overextend their finances to make the deal?

Or say they buy the house, then paying for it becomes burdensome, but the house-equals-Dream message seeps in enough that they fixate on mortgage payments, let the dreams for the construction firm, novels and marathon slip away, never bother to help with the comic strip, and spend little time with Dad before he dies. In thirty years, they may own the house, but in quiet moments, they may realize that they lived an American nightmare.

And doesn’t business become more difficult when clients wonder if the real estate industry overlooks the harmful aspects of the house-equals-Dream message because the industry believes that its services, offered sans Dream, would not seem to be worth the fees it charges?

Don’t political careers lose sheen when we wonder if politicians package the Dream with proposed minority housing assistance grants to appear to be doing important work, and to mask the fact that proposing to make 40,000 grants of $5,000 apiece is not as important as, say, arranging health care for millions of people who lack it?

Doesn’t George W. Bush’s career lose luster when we wonder why the President, whose job would seem to include stewarding our collective concept of the American Dream, is so willing to whittle it into a sound bite?

The truth is that no one benefits from the house-equals-Dream oversimplification. Perhaps, as both real estate consumers and as voters, we cultivate our dreams best when we are desperately seeking nuance.





Copyright 2017 William Devine.  All rights reserved worldwide.  Disclaimer.