Our Lot: How Real Estate Came to Own Us,  By Alyssa Katz, Bloomsbury USA, (June 2009)

When I moved down to South Texas in 2005, I quickly learned the newly minted gospel of Rio Grande Valley real estate. One, the McAllen metropolitan area was an indisputable boomtown, its growth fueled by NAFTA and ample sunshine. Two, you could live the good life here on the cheap; spacious, tile-roofed houses were continually springing up, generous loans were easy to get, and property values were certain to rise. The region’s most powerful political players were developers, and local boosters never tired of citing a statistic that the region ranked among the five fastest-growing metropolitan areas. I never did figure out where the statistic came from.

McAllen doesn’t appear in Alyssa Katz’s book, Our Lot: How Real Estate Came to Own Us, but it might as well have. Like the sprawling suburbs and exurbs around Sacramento, Fort Myers, and Atlanta that Our Lot examines, McAllen has the key elements for a house-building binge: year-round warm temperatures and sunshine for continuous construction, cheap, flat farmland easily converted into subdivisions, and seemingly unstoppable population growth. Like people all over America, its inhabitants not only bought into the manufactured ideal of homeownership, but were strivers excited by the prospect of owning ever bigger and more elaborate emblems of their success. The mantra, as Katz puts it, “buy a home, refinance, trade up, repeat.”

Perhaps because I come from a place—Western Massachusetts—where this bigger-newer-better attitude is generally frowned upon, I am tempted to start holding forth on the virtues of personal responsibility, delayed gratification, old-fashioned thrift. Katz, though, is more sympathetic to the beleaguered borrower, and she makes a strong case for who’s mostly to blame. “The U.S. government and its business partners marched the nation into a delusion,” aggressively promoting the idea that everyone could and should own a home and that homeowners and investors and fund managers stood to gain from the risky lending practices this attitude engendered. Instead, these practices “realigned the American economy into two nations, one of creditors and another of perpetual debtors.”

Katz begins her book in the 1960s and 1970s, when the problem was not investors throwing too much money at people who couldn’t pay it back, but, rather, declining to loan to poor people and minorities. Community activists helped outlaw this “redlining,” and by the 1990s, the country had veered much too far in the other direction. The Clinton administration, as well as many academics, championed homeownership as the answer to innumerable social ills. With almost no government oversight, and, Katz points out, remarkably little media or public scrutiny, “subprime lending joined malt liquor and the lottery as a corner industry that sold the promise of escape” to the very people most vulnerable to that sales pitch. After decades of being told they weren’t responsible enough to handle a mortgage, many Americans were elated finally to be told “yes.”

Much of Our Lot has been examined in snippets elsewhere, but Katz skillfully weaves disparate concepts into a remarkably clear and cogent narrative. Her examples are vivid and on point, and her prose notably lively, given the potential for getting mired in wonky financial jargon or bureaucratese. She devotes a riveting chapter to the particularly scandalous borrowing and lending practices in Atlanta, where many homes went through the foreclosure mill five, six, or eight times, and fraud destroyed property values in entire neighborhoods. “In Atlanta,” Katz notes dryly in one of her many zingers, “if it had a gate, a pool, and a name, it was infested with mortgage fraud.” Katz also provides a particularly strong account of the rise of publicly traded mega-homebuilders of the 1990s and 2000s and their role in helping the housing market spin madly out of control. As shareholders demanded ever-higher volumes of sales, the builders resorted to shoddy workmanship and creating a glut of housing in far-flung and undesirable locales.

Ultimately, Katz concludes, the success of the housing market can be judged not by how much it props up home values, but by the extent to which it provides affordable, housing in places people actually want to live. Instead of using “the inestimable power of government” to extract maximum profit from housing, we ought to channel it for the public good, which, in Katz’s mind, includes creating robust protections for renters, protections that were largely gutted in New York and elsewhere during the 1990s. In an epilogue that would have been more effective had its material been presented earlier in the book, she notes that the last time the government, in the wake of a profound financial crisis, forged a set of standards for the mass construction of housing, it created postwar suburban sprawl. That sprawl is the very opposite of what we need today, she argues.

The suburbs are indeed a social and a political creation—not the organic representation of some innate American desire to own a one-family home, a two-car garage, and a well-manicured lawn. And Katz is correct that government could, in theory, structure incentives differently, nixing the mortgage interest tax deduction and somehow encouraging us to inhabit the kind of mixed-use, walkable neighborhoods that make urban planners salivate. The question is, now that we have so assiduously cultivated a hankering for lots of our own, can we muster the political will to create a new habitation ideal?