I walked by the house of a Macarthur “Genius” Fellowship recipient the other day. The idea of the fellowship is that by giving $500,000 to a creative person, the person will do additional creative things. This particular recipient hadn’t, as far as I knew, changed anything that he was doing or planned to do. In the ten years since his Macarthur award, he had upgraded his housing situation, however. The current house, in a comfortable West Cambridge neighborhood, is probably worth at least $3 million and the MacArthur’s $500,000 is about what his neighbors are spending on a kitchen/bathroom renovation.
It occurred to me that the foundation might be making a mistake in giving any awards to people who live in Boston, New York, or California. A person who lives in an area where a comfortable house may be obtained for minimal $$ is likely to spend a $500,000 windfall on something interesting. A person who lives in an area where a house that would be considered “nice” by Midwestern standards starts at $2+ million is going to turn the money into real estate. As noted in “where to live for early retirees”, home ownership makes people boring and, probably, owning a fancier house with a $500,000 kitchen/bathroom renovation makes an already boring homeowner even more boring.
Philip… “…home ownership makes people boring and, probably, owning a fancier house with a $500,000 kitchen/bathroom renovation makes an already boring homeowner even more boring.”. Wow IMHO an observational Home Run…
My own personal observations (“home ownership”) led me to become a renter-gypsy in my retired life. Right now, I’m in the Bunkhouse ($10/night) at Soar Truckee for 2 weeks glidering. My upscale/neato L.A. apartment I use as a “hotel” meaning I’ll leave it at any time, for any length of time, “no regrets”. My cheapo Mammoth apartment ($450/month) is the ski-house. If *anywhere* strikes me as more fun/interesting, I move. All “stuff” is stored in large, clear-plastic, boxes-on-wheels. Car is PT Cruiser cheap/efficient.
Next month is a week in Driggs ID (soaring) and a week in Bozeman (dirt bikes). I never thought of living this life while a home owner.
On the other hand, Richard Stallman is also a Cambridge-dwelling recipient, who hardly seems to have squandered the funds on real estate…
Homeownership has its benefits. Two that pop into my mind at this late hour are the appreciation in value and a stable base for kids to grow up in. I’ve rented a lot and there is something very different to not have yet another “boss” (landlord) to be standing over you. In 4 years when the youngest goes off to college? No telling what we might do! One idea talked about is buying a smaller, much cheaper place and a decent plane, then spend a lot of time traveling the country. All paid for with equity from the boring lifestyle we arf now living..
But oh boy if someone gave me $500k to play with, the parts I would buy and things I would build!
Admittedly, the suburbs where many of us homeowners live are somewhat boring. I would move back to the city (Washington, DC) in a heartbeat if I weren’t so darn dependent on the public schools.
But having had an Egyptian landlord (rather laissez-faire) in Cairo and a Swiss landlord (insufferable, but it’s a country where it’s illegal to mow the lawn on Sundays in many cantons — naturally, the first day of the week my husband tried to accomplish this task when we lived there, so within 3 minutes there was a phone call from the landlord who lived adjacent), as well as an American one (incredibly cheap, so that if his son-in-law was unable to fix something, it usually remained broken), I would never trade home ownership for being a tenant, if I had a choice financially.
As Bruce Springsteen once noted, there are nice people on every block and there are obnoxious ones, too. Same probably applies to homeowners in terms of whether they’re the ones you want to talk to at cocktail parties.