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I would be interested in the history of that. Homeownership seems very American to me, but subsidizes not so much [1]. And books or links, that you can recommend?

[1] I'm aware there are many subsidizes in the US, for instance in agriculture. Still, it seems to be less than in Europe. There are subsidizes for homeownership in Germany but more people live in rented accommodation.

The biggest difference between the US and somewhere like Germany is the price of land. While land can be expensive in certain highly desireable places, it is possible to buy habitable land in the US for what is a derisory amount of money to a European - often less than $1,000 per acre. This drives the cost of home ownership down to levels that can be aspired to by many people. There is a lot of homebuilding as a result, which also keeps costs low.

In comparison, buildable land in a European village or small town can be $100,000/acre - not that you can find an acre to buy anyway. Even if you could afford the land, you would then have to find the same amount again to build the house - so it is much cheaper to rent.


Sorry, you wanted a reference. This older story:


It captures some of the US pro-home-ownership arguments lower in the article.

Edit #2:

Yeah, there are places in Europe cheaper than Germany, but $700,000/acre does not surprise me. I should have added that construction standards are very different between Europe and the US which also accounts for the low cost of housing. In many (most?) parts of the US houses are made of simple timber frames and hence are simply and quickly erected - I have seen houses (the outer shell obviously) go up in as little as two days. In Europe a lot (most?) of housing is made of brick, a more laborious process.

Your price for buildable land in Europe is way off. The average price for land that is ready to build on in germany is around 129€ ( http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/In... ), resulting in about $700,000/acre. Towns are quite a bit more expensive.

Ho-lee crap!

Around here, $10k/acre is considered expensive.

Think you'd have to look at the term "buildable"... the US doesn't try very hard to prevent urban sprawl with it zoning rules. The EU, in comparison, may restrict zoning and in particular restrict the conversion of agricultural land into housing tracts.

An acre is ridiculously large for building a house on. 1/10th of an acre is what an average Belgian free-standing house is build on these days, in the Netherlands it's even smaller.

I'd jump at any chance to buy an acre of land zoned for residential construction for only 100k, even in the most 'rural' areas here ('rural' being relative, even very rural here is still suburban by US standards).

The single biggest subsidy for homeownership in the US is the mortgage interest tax deduction, where you can deduct interest payments on the first $1,000,000 of debt on your first or second home.

Yes, interest deduction is a big subsidy, but also roads, cars etc are highly subsidized. I'm on my BB so I can't provide good sources, but if you google subsidies of driving americans etc you will find a lot.

In Europe, they charge very high vehicle and gas tax to make up for the roads and keep people from driving. In the US we allow much less wealthy people to drive. Neither is correct, but we in the US highly subsidize commutes.

IIRC The US Highway system is cash positive. It is true that the US gas-tax is much lower than just about anywhere else. The easiest way to lose the next election in the US is to propose raising the gas-tax.

I imagine the homestead exemptions (terminology?) are a close second. Most places you get a property tax break on property you live in. Landlords, and therefor renters get to make up the difference.

Agreed. Another one is Fannie Mae and Freddy Mac, which work together to stabilize the home mortgage market, resulting in lower mortgage interest rates than would otherwise be the case.

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