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The concept of fee-simple home ownership is so straightforward that most human beings – outside of North Korea and Cuba, at least – don’t even think of it as a “concept.” Yet it is the bedrock of our society’s wealth and economic stability.
Privately owned homes provide more than mere shelter. They provide a nest egg for retirement, and a source of mortgage credit for temporarily distressed families or seed capital for small business owners.
They also provide families with a bricks-and-mortar stake within a geographical community. This sense of ownership and belonging in turn leads to numerous sociological benefits. Academic studies show that, as compared with renters, homeowners move less frequently, have stronger social ties with their neighbours, participate more in elections, report higher lifesatisfaction, experience less crime, collect less welfare, and raise more stable, well-educated families.
If there is a community that cries out for all of these benefits, it is Canada’s native population, especially those living on poor, isolated reserves. Yet, perversely, these are the only communities in Canada where one is legally forbidden from owning a house and the land under it.
On reserves, land is owned by the Crown, which permits First Nations to use it for their collective use. Houses typically are built and maintained by bands or bureaucrats – with no economic input from (or equity for) the occupants. It is an artificial, Sovietstyle arrangement.
Whenever a crisis erupts in a remote community such as Kashechewan or Attawapiskat, visiting journalists and politicians invariably are shocked at the poor condition of the homes. But this isn’t because Ottawa is nickel-anddiming Canada’s native reserves. Rather, it’s a function of the economic incentives facing the natives who live in those homes.
Consider, for instance, a typical (off-reserve) Canadian homeowner who wakes up to find a leak in his basement. The carpet, he notices, is beginning to soak through – and there’s a musty smell. Fixing the problem will cost thousands of dollars, but the homeowner eagerly puts down his money, and fast: He knows that once mould sets in, his whole house can become toxic. If he waits too long, the basement may need to be gutted entirely. Even if he doesn’t use his basement as a living space, the homeowner has equity in the structure: He knows that investing in necessary maintenance will pay off when he sells the house.
But now consider the very different incentives facing a reserveresident family with a leaky basement: Why would he plunk down a nickel of his own money to pay for a house that he didn’t build, didn’t buy and doesn’t own?
For the rest of this article, please go to the National Post website: http://www.nationalpost.com/Private+property+better+lives/7068551/story.html