Building Crisis


That housing prices have held up in the midst of the stock market downturn is considered a blessing by many economists—and by the nearly seven in 10 families that own their homes. But it's a cause of concern for local pols and academics who worry for a living—and seek federal subsidies as a solution for every problem.

In May, the U.S. Conference of Mayors descended upon Washington, D.C., in an effort to call attention to a purported housing crisis. From 1991 to 2001, the mayors fretted, household income increased by 45 percent while the price of homes jumped 52 percent. "We have to be able to answer the question, where are our children going to be able to live?" Nicolas Retsinas, head of Harvard's Joint Center for Housing Studies, told USA Today.

If the mayors get their way, those kids will be living in federally subsidized housing. Yet no crisis exists. Over the same decade that housing allegedly became less affordable, homeownership rates increased in every region of the country.

[Ran with graph, "A Home of One's Own," showing the percentage of households owning a home, 4th quarter of each year from 1992-2001]