On Monday we paid off our house. It seemed like the thing to do -- we love the idea of no mortgage payment, of not being in bed with the banks. I was prompted to take this admittedly loony step (we had a 3.25% mortgage and we are fortunate to have regular employment, so we have been able to afford our payments) by the pandemic.
The crazy stock market during the pandemic got me thinking that money is ephemeral. I freaked out that some savings I had in the form of stock melted away in late February 2020, and I was surprised when they reemerged later. This stock boom just feels wrong given all the suffering of the past 18 months--and it also feels surreal, like it should probably not last. The "money" was in my account, but I recognized that it could be gone tomorrow. Better to put it into the house.
In the meantime, I've not been blogging at all and I was thinking of doing some more writing when I came across this unpublished post from autumn 2015. Still pretty relevant, and although self-indulgent (it takes a tour through my childhood), I want to put it out there into the world. So here it goes, potentially broken link and all!
Neighborhoods, Moving Up and other Stuff
Last week in the New York Times Bryce Covert wrote a really smart piece about "Free Stuff" that got me thinking about real estate.
When I bought my first house, I was a little shocked at the tax implications. Really? I get to deduct all my mortgage interest payments from my yearly income tax?
Yes, one friend explained. Welcome to the Middle Class Welfare Train. Enjoy the ride.
This was not my first experience with bizarre (to me, literal as I am) tax law. In Wisconsin, when I was a graduate student, it became clear that I was eligible for something called a "homesteading credit." Not that I was out on the plains, tilling the soil or anything. But because as a teaching assistant my income was pretty low, the state mitigated the effects on my budget of property taxes paid through rent costs. A nice perk once I understood that I was eligible, though the logic escaped me.
Where do we get our education about how we interact with the real estate and tax worlds? It seems to me that a lot of this information is simply absorbed: through watching our parents and their friends, in some cases eavesdropping on their conversations and puzzling out what any of it could mean; through the visible effects of the real estate market, whether signs in the yard, ads for bank services, or construction and development; and for my generation--and many others, I suspect--from the game of Monopoly.
I have been thinking about this, and about my suburban childhood in a town outside Chicago, because I was visiting my father for our so-called "autumn break," and I took the opportunity to design a Monopoly-style run through our childhood.
Blustery winds swirled the autumn leaves about as I ran from the public library through the town. I went past my grandmother's house and thought about how my parents bought their very first "starter" home, just a block away, in 1962. It was the old kind of tiny house, just over 1000 square feet, but I have no real memory of it, so I ran past my gramma's instead. The house still seems to be home to a family--basketball hoop on the driveway, backyard now fenced in because the new owners built a pool--and the street is quite modest. Our place on Berry Road? Probably the equivalent of Baltic Avenue. Once I was born and my brother was on the way, our family outgrew it.
I continued my run through town, past the train station, the former-bank-turned-restaurant, and ran to our second home, where we moved as a family of five. In my day it was reasonably sized by suburban standards, a three-bedroom bungalow built in 1956 with sloped ceilings and dormer windows in the second floor bedrooms. I remember that we built a porch on the back, and we extended the kitchen part of the way into the garage to gain a dining space. In Monopoly terms? Maybe States Avenue, or St. James Place. With a "house" or two added to symbolize the additions...
(Now the house has doubled in size, with an enormous two-story addition, to over 3,000 square feet. Think St. James Place plus a hotel.)
After passing the house in which I attended nursery school (built in 1886, now a private home again), the hill we used to go sledding on, and my middle school (outfitted with mobile classroom units in the yard which look depressingly permanent), my final run-by was of our last home. I lived there from 1974 through 1983, and I remember what a "step up" it seemed even at the time, because we actually had a dining room in the new house. Marvin Gardens, or Pacific Avenue even?
Juxtaposing these Monopoly streets on my little home town in one way makes no sense at all--I've been to Atlantic City, and let me assure you there was nothing like a Boardwalk in our midwestern town. No hotels. No Trump casino.
But since we all grew up on Monopoly, it seems to me that the idea of manipulating the tax laws and mortgaging property was inculcated in us, and we didn't think there was anything wrong with it. Our parents approved, and we permitted our children to imbibe the same business lessons.
I spent my childhood classifying the neighborhoods in which we lived, some as poorer or starter house neighborhoods, other as fancier, aspirational neighborhoods, others as neighborhoods for the wealthy (with the minimum 5 acre lots that permitted horse ownership).
Our last neighborhood really was aspirational. The house actually had two-story high square columns gracing the front of the house.
In today's American real estate market, everything seems to be shifting. The 1950s developments in which I grew up are experiencing "tear downs," and little bungalows now sit next to larger and larger homes. I was shocked to see that the perfectly nice house in which my brother's friend Quinn lived was replaced, apparently in 2007, by a McMansion. Five bedrooms, 4.5 baths, almost 4000 square feet. It is now a million dollar home, "worth" more than three times the value of other homes on the street.
What are these musings on American suburbia? In part, an acknowledgement of where I come from. But in part, too, a concern that many times in American political discourse we don't acknowledge the meaning of the society around us, including the government benefits we all enjoy. I could always "read" my town, but only now do I recognize the ways in which that aspirational (and judgmental) view of others colored my world, though it didn't correspond to reality. We were all on the Welfare Train, but in my middle class town no one would have admitted it.
If the older homes are being replaced by new, larger ones, has suburbia changed in any way, or are we just mapping Pennsylvania Avenue onto Virginia Avenue?
When I bought my first house, I was a little shocked at the tax implications. Really? I get to deduct all my mortgage interest payments from my yearly income tax?
Yes, one friend explained. Welcome to the Middle Class Welfare Train. Enjoy the ride.
This was not my first experience with bizarre (to me, literal as I am) tax law. In Wisconsin, when I was a graduate student, it became clear that I was eligible for something called a "homesteading credit." Not that I was out on the plains, tilling the soil or anything. But because as a teaching assistant my income was pretty low, the state mitigated the effects on my budget of property taxes paid through rent costs. A nice perk once I understood that I was eligible, though the logic escaped me.
Where do we get our education about how we interact with the real estate and tax worlds? It seems to me that a lot of this information is simply absorbed: through watching our parents and their friends, in some cases eavesdropping on their conversations and puzzling out what any of it could mean; through the visible effects of the real estate market, whether signs in the yard, ads for bank services, or construction and development; and for my generation--and many others, I suspect--from the game of Monopoly.I have been thinking about this, and about my suburban childhood in a town outside Chicago, because I was visiting my father for our so-called "autumn break," and I took the opportunity to design a Monopoly-style run through our childhood.
Blustery winds swirled the autumn leaves about as I ran from the public library through the town. I went past my grandmother's house and thought about how my parents bought their very first "starter" home, just a block away, in 1962. It was the old kind of tiny house, just over 1000 square feet, but I have no real memory of it, so I ran past my gramma's instead. The house still seems to be home to a family--basketball hoop on the driveway, backyard now fenced in because the new owners built a pool--and the street is quite modest. Our place on Berry Road? Probably the equivalent of Baltic Avenue. Once I was born and my brother was on the way, our family outgrew it.
I continued my run through town, past the train station, the former-bank-turned-restaurant, and ran to our second home, where we moved as a family of five. In my day it was reasonably sized by suburban standards, a three-bedroom bungalow built in 1956 with sloped ceilings and dormer windows in the second floor bedrooms. I remember that we built a porch on the back, and we extended the kitchen part of the way into the garage to gain a dining space. In Monopoly terms? Maybe States Avenue, or St. James Place. With a "house" or two added to symbolize the additions...(Now the house has doubled in size, with an enormous two-story addition, to over 3,000 square feet. Think St. James Place plus a hotel.)
After passing the house in which I attended nursery school (built in 1886, now a private home again), the hill we used to go sledding on, and my middle school (outfitted with mobile classroom units in the yard which look depressingly permanent), my final run-by was of our last home. I lived there from 1974 through 1983, and I remember what a "step up" it seemed even at the time, because we actually had a dining room in the new house. Marvin Gardens, or Pacific Avenue even?
Juxtaposing these Monopoly streets on my little home town in one way makes no sense at all--I've been to Atlantic City, and let me assure you there was nothing like a Boardwalk in our midwestern town. No hotels. No Trump casino.
But since we all grew up on Monopoly, it seems to me that the idea of manipulating the tax laws and mortgaging property was inculcated in us, and we didn't think there was anything wrong with it. Our parents approved, and we permitted our children to imbibe the same business lessons.
I spent my childhood classifying the neighborhoods in which we lived, some as poorer or starter house neighborhoods, other as fancier, aspirational neighborhoods, others as neighborhoods for the wealthy (with the minimum 5 acre lots that permitted horse ownership).
Our last neighborhood really was aspirational. The house actually had two-story high square columns gracing the front of the house.
 |
| Only $999,999. Such a deal. |
What are these musings on American suburbia? In part, an acknowledgement of where I come from. But in part, too, a concern that many times in American political discourse we don't acknowledge the meaning of the society around us, including the government benefits we all enjoy. I could always "read" my town, but only now do I recognize the ways in which that aspirational (and judgmental) view of others colored my world, though it didn't correspond to reality. We were all on the Welfare Train, but in my middle class town no one would have admitted it.
If the older homes are being replaced by new, larger ones, has suburbia changed in any way, or are we just mapping Pennsylvania Avenue onto Virginia Avenue?
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