To understand how American democracy has worked, and why its future may be limited, it’s critical to look at the issue of property. From early on, the country’s republican institutions have rested on the notion of dispersed ownership of land — a striking departure from the realities of feudal Europe, east Asia or the Middle East.
From Jefferson and Madison’s republic of yeoman farmers to the suburban homeowners of the postwar era, the notion of dispersed property ownership shaped our democracy. The founders understood the role of small property owners in ancient Athens and the Roman Republic, as well as contemporary examples in such places as the Netherlands. Those who own something — a house, a farm, a small business — tend to be far more engaged with their communities than those who rent or work merely for wages.
This era may now be coming to an end. In the United States, the proportion of land owned by the nation’s 100 largest private landowners grew by nearly 50 percent between 2007 and 2017. In 2007, according to the Land Report, this group owned a combined 27 million acres of land — holdings larger than the entirety of New England.
At the same time, more people, particularly the younger generation, seem destined to be lifetime renters. Their parents and grandparents may have witnessed a dramatic rise of homeownership, but by 2016 home ownership among people aged 25-34 has dropped from 45.4% in 2000 to 37.0 percent in 2016.
In California, the drop in ownership among young adults is even more precipitous, a 30 percent decline since 2000 in Los Angeles, helping push our region’s homeownership rate to the lowest of any major metropolitan area. California’s African Americans and Latinos also have seen their opportunities shrivel; homeownership rates are now 30 percent in L.A., the Bay Area and San Diego, compared to over 40 percent in a rival large metropolitan area of Texas and Florida.
The decline in bourgeois aspirations
The shift to ever more concentrated property ownership threatens the future of liberal democracy.
To be sure, this right was long limited, particularly for the working class, and particularly African Americans. But over the last few decades ownership opened to an ever-larger segment of the population. Now, with fading chances for home ownership, minorities and less than affluent millennials once again will face a formidable challenge in boosting their net worth. Property remains key to financial security: Homes today account for roughly two-thirds of the wealth of middle-income Americans; homeowners have a median net worth more than 40 times that of renters.
If kept out of the ownership market, the economic position of the new generation will likely remain perilous. Indeed by 2030, according to a Deloitte study, millennials, by far the largest adult generation, will account for barely 16 percent of the nation’s wealth. Boomers, at a time they will be entering their 80s and 90s, will still control a remarkable 45 percent of the nation’s wealth.
The decline in the opportunity horizon is already generating an ever more feudalistic mentality among the young, including those from wealthy families who look forward to entering what one writer calls “the funnel of privilege.” In a country whose mythology disdains the power of inherited wealth, millennials increasingly count on inheritance for their retirement at a rate three times that of the boomers. Among the youngest cohort, those 18 to 22, over 60 percent see inheritance as their primary source for their wealth as they age.
The end of consensus
Historically both liberals and conservatives favored expanding, or at least preserving, homeownership. Administrations spanning the period from Herbert Hoover to George W. Bush embraced the idea, not just for economic reasons, but as a progenitor of democracy. “A nation of homeowners,” President Franklin D. Roosevelt believed, “of people who own a real share in their land, is unconquerable.”
The Hudson Valley plutocrat’s self-styled successors, sadly, have increasingly abandoned this notion. Modern day progressives are increasingly hostile to both single-family homes and ownership, calling such things both inherently racist — despite the clear interest of minorities to buy such homes — as well as socially irresponsible and insufficiently aesthetic.
The environmental movement embraces an agenda of “smart growth” that seeks to force the often unwilling into small apartments closer to dense urban cores. The environmental magazine Grist envisions millennials as “a hero generation” determined to escape their parents’ material trap of suburban living and work that, incidentally, also produced them. One magazine editor proudly declared herself a part of the GINK generation (as in “green inclinations, no kids”) that she said meant not only a relatively care-free and low-cost adult life, but also “a lot of green good that comes from bringing fewer beings onto a polluted and crowded planet.”
Even parts of the business community, including oddly the California Association of Realtors, also have backed measures to force densification of middle-class, single-family neighborhoods, although it’s hard to see how more rental apartments and fewer owned single-family houses will employ many of their members. Some free-market advocates also support deregulation of urban markets, even if the more affordable option, housing on the fringe, is sharply regulated.
Some large Wall Street interests, also favor the demise of homeownership. For them, the creation of a “rentership society,” turning the independent middle class into renters for life, would assure a steady profit for the owner class, a rent appropriate to a medieval landlord.
The political implications
The decline of widespread property ownership undermines the long-recognized predicates for democratic politics. Survey data among millennials — the group most effected — already shows a substantial shift toward a socialistic mindset. In the 2016 primaries, the openly socialist Bernie Sanders outpolled Hillary Clinton and Donald Trump combined. A 2016 poll by the Communism Memorial Foundation found that 44 percent of American millennials favored socialism while another 14 percent chose fascism or communism. By 2024, these millennials will be by far the country’s biggest voting bloc.
If not addressed, our politics will become ever more dominated by a race between parties to see who can give the most away to the modern-day peasantry, who, having nothing, will have less reason to guard the property rights of others. Only a policy agenda that recommits us to creating new opportunities for ownership, largely by building on the urban fringe as well as underutilized commercial areas, can reverse this trend over time.
The political base for this change certainly exists, besides the current owners. Among those under 35 who do buy homes, four-fifths choose single-family detached houses. According to a recent National Homebuilders Association report, over 66 percent, including those living in cities, actually prefer a house in the suburbs.
“Young people,” wrote Montesquieu in the mid-18th century, “do not degenerate; this only occurs only after grown men have become corrupt.” In endorsing policies that restrict suburban development, and deflate homeownership, we are systematically turning the next generation into modern-day serfs, who either will have to beg for alms from their betters or, if properly motivated, overturn liberal democracy with something, likely more authoritarian, that promises a better deal.
This piece first appeared in the Orange County Register
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Joel Kotkin is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. He authored The Human City: Urbanism for the rest of us, published in 2016 by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He is executive director of NewGeography.com and lives in Orange County, CA. His next book, “The Coming Of Neo-Feudalism,” will be out this spring.
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