on standardized tests, but the economic literature is full of articles on both sides of the question.
For example, Federal Reserve Bank economist Daniel Aaronson examined the issue in 1999 and concluded that at least “some of the homeownership effect [on child schooling] is driven by family characteristics associated with homeownership, especially residential stability.”8 This conclusion suggests that the children of those families would have done as well, or nearly as well, even if those particular families had rented their homes. But in 2001, New York University sociologist Dalton Conley used multigenerational data to show that homeownership makes a major difference to children in African-American homes. Homeownership, says Conley, “matters not only for the immediate well-being of families, but also for the life-chances of the subsequent generation.”9 Similarly, after reviewing a wide range of variables, policy analysts at Johns Hopkins University concluded in 2003 that “homeownership is beneficial to children’s outcomes in almost any neighborhood” and that “children of most low-income renters would be better served by programs that help their families become homeowners in their current neighborhoods instead of helping them move to better neighborhoods but remain renters.”10
What is clear is that most of the benefits of homeownership mentioned by Haurin accrue to the homeowners and their families, not to society in general. This fact suggests that governments have little reason to subsidize homeownership except to the extent that they subsidize other programs, such as education or poverty reduction, that might be more cost-effectively achieved through homeownership programs. Haurin suggests, for example, that increasing homeownership can increase children’s test scores at a much lower cost than investing in the educational system.11
Haurin left out one major benefit of living in a society with high homeownership rates: a high level of economic growth. Peruvian economist Hernando de Soto believes that nations that make it easy to own homes grow more rapidly because homeowners can easily start small businesses by borrowing against the equity in their homes. “The single most important source of funds for new businesses in the United States,” de Soto notes, “is a mortgage on the entrepreneur’s house.”12 This fact doesn’t necessarily mean governments should promote homeownership, but they shouldn’t stand in the way, as many governments of developing nations do by maintaining large areas of land in public or communal ownership.
Homeownership also has a political component: Many believe that homeownership makes people more fiscally and socially conservative, suggesting that Republican or other conservative parties have an interest in boosting homeownership while Democratic or other liberal parties have an interest in boosting renting. “No one who owns his own house and lot can be a Communist,” said homebuilder William Levitt. “He has too much to do.”13
In fact, the relationship between homeownership and social issues is probably imaginary. Researchers at the University of Louisville found no correlation between homeownership and attitudes toward civil rights, women’s rights, or gay rights.14 The relationship between homeownership and fiscal issues may be more realistic: European nations with high rates of homeownership tend to have much lower rates of social spending. However, it isn’t clear whether the high homeownership leads to lower social spending or the low social spending leads to high homeownership.15
Homeownership and Property Rights
Economists sometimes describe property rights as a “bundle of sticks.” One stick represents the right to use the property. Normally, property owners have this right unless they rent or lease the property to someone else, in which case the renter or leaser has this stick. Another stick is the right to sell the property. Although we normally take it for granted that someone who owns a house has the right to sell it, that hasn’t always been true. During some periods in the past, some nations have limited the rights of property owners to sell their land in order to keep most property in the hands of a small aristocracy.
Ownership of all possible sticks in the property rights bundle is known as an allodial title. Since the government usually reserves to itself the right to tax, regulate, and take property through eminent domain, it is rare for anyone other than a government to hold an allodial title. However, in 1997 the Nevada legislature, which was apparently in a libertarian mood, allowed homeowners without a mortgage on their home to claim an allodial title to their house and land by paying a fee to the state equal to 5 percent of the value of their property. This fee would relieve them from ever paying property taxes on the home and would also protect their home from being taken by creditors or through eminent domain proceedings. If the owner sells the property or bequeaths it to an heir, the buyer or heir must again pay 5 percent to keep the allodial status. Nevada repealed the law in 2005 so it is likely that the number of Nevada properties that have allodial title is limited.16
The combination of sticks that we call “homeownership” has evolved over a long period and is still—some would say unfortunately—evolving today. Landownership by anyone other than a chief or sovereign has been rare in human history. Most hunter-gatherer societies had no concept of landownership at all. Early agricultural societies were probably run by chiefs and, eventually, kings who held effective title to all land and granted its use to individuals in exchange for favors or support.
Homeownership in Ancient Times
Ancient Greece was not a nation but a group of city-states, each of which had its own laws and customs. Many of those city-states, including Athens, allowed and encouraged private ownership of farms. Farm ownership was vested with families, not individuals, and lacked one of the sticks we generally associate with private ownership: the right to sell the land. Instead, the land was tied to the family in perpetuity (or, in actual practice, until a foreign invader changed the system of property rights, generally by putting most land in the hands of a few people).17 This system of private ownership proved to be very productive, and farm productivity notably declined when it was replaced by a system of absentee owners over large areas.18
Ancient Rome, too, had a system of private property rights that probably contributed to that empire’s success. Unlike the Greek system, owners could sell their property, which may be why the best lands were eventually held by a few powerful families.
Medieval Homeownership
Roman rule of Britannia influenced English property law for several centuries after the fall of Rome. That law, which became known as the Anglo-Saxon common law, gave landowners the right to sell their land and to will it to whomever they wished. When William the Conqueror successfully invaded England in 1066, however, he overturned those laws and declared that all land in the kingdom belonged to him.19 He thereby introduced the feudal system to Britain in which he as king would grant lands to his lords. They in turn would divide lands among their vassals who would each manage a piece of land known as a fief. The vassals and lords paid rents, promised military service, or provided other services to their lord or king.
Feudal land grants came with reservations, two of which were primogeniture and entail. Primogeniture required that only the eldest son could inherit the land (in some countries, but not England, the eldest daughter could inherit if there were no sons). Entail prohibited landowners from selling their land. In effect, the land grants were to families, not individuals, and these reservations kept most land in the hands of a few aristocrats.
One alternative to primogeniture is known as gavelkind, in which land was equally divided among all the children (or, at least, all the male children). Gavel meant “payment” in Middle English, and English land courts typically accompanied a decision about payments by striking a rock. Today, gavel has come to mean the hammer doing the striking. In any case, although gavelkind might seem more just than primogeniture, it also meant that properties became more and more chopped up into smaller pieces. Primogeniture prevailed in England for any estates where the owner died without a will until 1926, whereas Wales relied on gavelkind, which some say is one reason why England was able to conquer Wales in the late 13th century.
The strongest resistance to William’s changes came from the county of Kent. To avoid bloodshed, William agreed to allow Kent to keep the Anglo-Saxon rules (leading the county to adopt the motto invicta, meaning “undefeated”). Thus, the Anglo-Saxon rules allowing individual