Mortgaging the American Dream: Joshua Specht on the Rise & Fall of US Homeownership

Andrew Keen (0:00)

Hello, my name is Andrew Keen. Welcome to Keen On America, the daily interview show about the United States.

Hello, everybody. As always, I'm talking to you from San Francisco in California, where there's a housing market boom, wealthy AI workers are sending San Francisco house prices soaring, according to the BBC. There's even a mansion shortage, given all the money around in the system. A lot of people are very concerned. The mayor of San Francisco has declared a rent emergency, at least according to the New York Times, the AI housing frenzy.

The price of housing and rent isn't only an issue in San Francisco. Something similar is happening in New York, where housing affordability is drawn by partisan attention. In other words, property values are political, they're economic, and perhaps they get to the core of all the promise. And problems with the American Republic. That's certainly a theme in a new book by my guest, Joshua Specht, who teaches in Indiana, and is talking to us from South Bend, in his new book, Property Values, The Rise and Fall of the American Homeowner. As I said, Joshua is joining us from South Bend, Indiana. Joshua, as we joked earlier, housing prices in San Francisco are quite different from South Bend, where you're talking from. Why is that? Why is housing so expensive on the coast, particularly in San Francisco and New York?

Joshua Specht (2:14)

Yeah, I think this question gets at the heart of what I'm trying to explain in my book, which, of course, is a long history of this, but it helps to explain what you just asked. I really liked how you referred to the promise, how do you say, the promise and problem of the American Republic?

Andrew Keen (2:27)

Yeah, all the promise and all the problems.

Joshua Specht (2:29)

Yeah, I think that really gets the heart of what I'm saying. To answer your question more narrowly, it's expensive in places where exciting, important things are happening, where people want to live. So that's the first thing, right?

There are places of opportunity often have these challenges. Now what the book tries to tease out, though, is in addition to those challenges in specific places, but there's a particularly American story to housing, where one's claim to housing, where the ability to own housing, is often understand to be central to the success or the legitimacy of the American kind of state or nation. And that means that we've prioritized a particular model of ownership that can be very supply constraint.

Similarly, I think that in the 20th century through today, home value became many Americans most valuable asset. Now, this is a little different if you're having a mansion shortage. But when it's something that valuable to most Americans, right, their home value is the biggest number they deal with in their life, well, they're going to take steps to protect it. And they take steps to protect it by constraining housing supply. And you get problems like you have in San Francisco. It tells you a lot cheaper here in South Bend, but it's gotten a lot worse since COVID certainly. So it's a problem basically everywhere. And the last thing I'll say is as the book suggests, when it is a problem and people feel like they can't afford their housing, which is a problem for society, for politics, for culture, and for our economy.

Andrew Keen (3:54)

As you say, you're a historian in this new book of yours, Property Values, The Rise and Fall of the American Homeowner is a history of American land, American homeownership. To what extent should we be understanding all this, Joshua, in terms of the colonial origins of the settling of the United States, the appropriation, of course, of land from Native Americans? Is this the cornerstone, the beginning, the foundation of understanding American homeownership?

Joshua Specht (4:29)

I'd say so. I think you don't, if you're just worried about housing prices in San Francisco, say, or anywhere expensive today, how much do you need to appreciate that history? Well, I think to understand America, you need to understand that what made all this possible was taking past quantities of land and there's a lot that helps explain American prosperity. Now, what's key to what you asked though, that I think is really important, is the colonial legacy of how we thought about the meaning of land ownership.

Because the theory that underpins a lot of America from the colonial period, from the revolution to today, is the idea that to have a functioning, thriving democracy, you need to have widespread ownership of land or a home, is the modern way of thinking about that. That theory is not uniquely American. That theory goes back to Europe. It goes back to before the United States existed. The problem was, if you're in Europe, you can't do much with that theory unless you're already wealthy or you're an aristocrat. There's not a lot of land to go around.