Earlier this week, the Wall Street Journal published an article reporting that in the five-year period between 2016 and 2021, “the number of renter households making $150,000 or more a year rose by 87%.” In other words, a growing number of America’s highest earners are either unable or unwilling to become owners of property.
The reasons given for this are varied. In some cases, high-earners are priced out due to higher home prices coupled with increased interest rates, making renting a more attractive option. In other cases, potential buyers are unable to find a home that meets all of their criteria, or prefer to rent as they settle into a new city. Still others are resistant to the relative immobility and responsibility imposed by homeownership.
In response to this turn, large investment companies have apparently begun shifting to meet the demand for rental properties, both by buying and building properties—including single family homes—intended for renting.
The immediate repercussions are obvious: higher earners in the rental market push up the rental market prices, squeezing lower income renters, while corporations buying or building homes to rent reduces the availability of housing for purchase.
The longer-term meaning of these events are perhaps less obvious, but arguably more dire for the health of the republic.
Since at least Aristotle, political theorists have recognized the importance of a strong middle class in order to maintain a stable political order. For Aristotle, both the very rich and the very poor were ill-equipped to lead a political community due to their lack of virtue: the very rich tend toward arrogance, luxury, and corruption, while the very poor tend toward petty criminality and irresponsibility. Furthermore, because of their radical social differences, the very rich and the very poor have difficulty entering into genuine civic friendship.
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The middle class mediates between these extremes because, as property owners, they are naturally resistant to the envy and leveling tendencies of the poor, while also keeping in check the excesses of the rich by the fact that they must work to maintain their property and make it productive. In this sense, the stabilizing, virtuous moderation that the middle class provides is grounded on broad-based ownership of property. As students of ancient philosophers such as Aristotle and Cicero, the framers of the American Constitution presumed that a strong property-owning middle class was essential to the project of American constitutionalism.
To be sure, artificially propping up property ownership through government programs, subprime lending, and consumer debt is a dangerous as the 2008 financial crisis demonstrated. But the built-in assumption of the government policies that contributed to the crisis is worth noting: property ownership matters.
As I have argued in these pages, the current threats to our constitutional order come primarily from our increasingly infantilized citizenry, incapable of self-rule. By building both a culture where citizens are no longer inclined to own property and an economy where they are no longer able to, we place our entire constitutional order at risk.
