Home ownership used to be an endemic aspect of the American dream, encouraged through government policy. In the wake of the 2008 economic recession, the Obama Administration reversed this policy toward home ownership in favor of Americans renting homes. In 2011, Forbes reported "the Obama administration is now on record as believing that homeownership is not the right aspiration for every American family." This shift is apparent in the decline of home ownership since its peak at 69 percent in 2006, where it hit its lowest point last year at 62.9 percent since 1965. For millennials, this rate has hovered around 31 percent over the past few years, compared to 43 percent in 2005 and 39 percent in 1995. A Harvard study conducted in July 2017 found that 40 million Americans can't afford the homes they live in, especially as rental costs have outpaced inflation.
Under the tax plan recently proposed by House Republicans, the National Realtors Association warns that the tax policy will continue this trend by increasing taxes on middle class homeowners. Bloomberg reported on November 10, "One of the Realtors’ examples: Under the plan, a family of four with an income of $120,000 would receive a tax cut of $3,408 if they rent their home. If that same family bought a home with a mortgage, their taxes would go up instead -- to the tune of $226."
The tax policy is designed to generate capital for the wealthiest Americans, while leaving behind everyone else. The New Yorker reported on November 10 on the design of both the Senate and House Republican tax bills. Each include "slashing the corporate tax rate from thirty-five per cent to twenty per cent and giving a big tax cut to Donald Trump and other owners of unincorporated businesses." This design places more money into the wealthiest Americans, which will drive income and wealth inequality, and increase economic burdens on Americans, beginning with the upper middle class. "First, it's going to push capital into capital rich cities and hurt rural areas," Fellow at the Open Markets Institute Matthew Stoller explained on Twitter in regards to the implications of the tax policy. "This is because the superrich and corporate headquarters are in cities. And just a few cities. They will get more capital, everyone else will starve. It will also push money into the hands of those who have it and don't use it, while taking it from those who use it and don't have enough." The capital gains from the wealthiest Americans deter entrepreneurship and investment start-ups in favor of corporate mergers, further monopolization and concentration of wealth. The rigors of this system will be increasingly felt by millennials and younger generations trying to make it in an economy that is increasingly designed for them to financially struggle.These trends are making things like home ownership something of the past.
Millennials are already burdened with stagnant wages and mounting student debt making home ownership increasingly unattainable. CNBC reported in May 2017 that 68 percent of millennials have less than $1000 saved, and 44 percent have nothing saved at all. Roughly one-third of Americans ages 18 to 34 live with their parents, a trend that is predicated on financial necessity. Job growth over the past decade has primarily stemmed from the gig economy, offering little job security, low wages, and no benefits. More than 20 percent of millennials live in poverty, compared to 1980 levels at 14 percent.
Instead of addressing the structural problems that are causing immense wealth and income inequality, putting younger generations at a risk to struggle more financially than their parents, millennials are often blamed under stereotypes; from the infamous "avocado toast" statement made by an Australian billionaire earlier this year on CBS' '60 Minutes,' who made his fortune after receiving a $34,000 loan from his grandfather, to the basement-dwelling millennial comment made by Hillary Clinton during her 2016 Presidential Campaign. Liberals push these stereotypes under presupposed beliefs that millennials are too materialistic and conservatives push them in line with attitudes against entitlements and a social safety net. Rather than structural obstacles impeding financial stability for millennials, the reason for these trends are scapegoated on millennial personalities. The early 20th century Horatio Alger rags-to-riches myth, that pulling one up from their bootstraps to economic enlightenment is tangible, lives on in these attitudes and perpetuates the political failure in addressing these issues.