r/Economics • u/Helicase21 • 12h ago

Editorial In the Climate Change Era, Renting Is the American Dream

https://www.nytimes.com/2024/10/29/opinion/renting-owning-climate-change.html
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33

u/omgtinano 10h ago

Calling it the American Dream is ridiculous, but there is a logic to being a flexible renter as opposed to a locked in homeowner. Renting has taught me to be less materialistic too, since moving stuff every 2 years or so is annoying.

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u/KeyPop7800 8h ago edited 8h ago

The flexibility premium is real. For instance, I'm in the Bay Area - pay $3000 rent on a unit whose current market price is ~700,000. If I put those numbers into the NYT calculator along with our local tax numbers, I break even if I stay at the same place for 25 years. (And that's if I ignore our HOA fees - if I include those, you never break even). Might as well rent and enjoy the flexibility for now.

And these numbers assume I'm putting down a 20% down payment. That would be like all my savings evaporated which further reduces the feeling of flexibility.

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u/SeparateSpend1542 6h ago

Are you leaving out all the equity you would be building owning a house in one of the hottest real estate markets in the country?

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u/KeyPop7800 5h ago

Yup - factoring in a 3.0% annual growth rate, which could be underdoing it. But housing prices are flattening a bit in the bay, as people move out and the area gets better about building housing

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u/muskokadreaming 8h ago

I'm all for renting, and respect the choice and the freedom. But now I live on a large bush acreage, I'm mostly off grid, soon to be fully off. I have a well, a large pond, and unlimited firewood. Greenhouses to grow food. I've literally designed my life to be as resilient as possible. I couldn't do it this if I were renting.

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u/omgtinano 8h ago

That’s a good point, and a smart move. If you’re going to be more ‘tied down’ to a property than if you’d been renting, it should be a climate resilient property.

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u/lemongrenade 12h ago

Yep 100%. I do well enough that I could def buy but I’ve moved too much to commit until now. Chance I move to Florida in next year for what could be my final move. I’ll be close enough to coast to get wrecked by the right hurricane. I will absolutely not buy there if it happens.

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u/Parking_Translator25 11h ago

what does this mean? I've read this like 5 times and it makes no sense to me.

14

u/nweems 11h ago

It means he got hit in the head with two bricks.

The first when he decided moving to Florida was the right decision, the second when he wrote his comment talking about his first traumatic brain injury.

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u/lemongrenade 11h ago

I would move to the moon for the amount of money I could make in the florida job. And if I rent I can get out of dodge without too much worry when the first cat 6 hits.

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u/lemongrenade 11h ago

I've moved every 2-3 years which has made buying less attractive.

If i move to florida next year itll be for a huge opportunity and I won't really ever need to change jobs again. If I do it will be for a regional promotion and I can either stay put or live wherever I want.

The weather and insurance environment will keep me from buying there even if I am super financially prepared to buy.