The nation's apartment owners are quietly celebrating what they say are a couple of recent victories - one at the Republican convention and the other in the nation's newspapers as the issue of "rent vs. buy" is being reopened.

The National Multi Housing Council, which has been after both parties to tone down their pounding of "home ownership" as the key to American success, is applauding GOP platform wordage that respects apartment renting.

Says the NMHC, "the Republican platform notes that while home ownership is desirable, 'at the same time, a balanced national housing policy must recognize that decent housing includes apartments, and addresses the needs of all citizens, including renters.'"

Members of the NMHC and National Apartment Association joined Realtor executives and Home Builder officials last week in Philadelphia to participate in a number of events, including a luncheon for party nominee George Bush. Apartment leaders also will be attending the Democratic convention in Los Angeles where they hope for similar success.

As important as the party platforms, the NMHC says it has recently bagged public relations victories across the country with the appearance of news stories questioning the advantages of owning a home vs. renting one.

The group specifically hails a story in the Washington Post by Ira Carnahan that challenges many of the negative clichés attached to renting.

"If you've ever rented an apartment or a house, you've probably had people tell you that you're making a mistake," write Carnahan. "Paying rent, they say, is just like throwing money down the drain. The truth isn't so simple.

… "Renting makes sense for lots of people, economists say, especially those who expect to move within three or four years. The notion that renting is universally short-sighted and financially foolish is wrong."

The story details that individual circumstances and needs dictate whether ownership is better than renting, and urges those in need of shelter to do their own math.

It notes that a common argument for ownership is the mortgage interest deduction.

"That might seem like a strong argument in favor of buying," the writer says. "But it's not as strong as you might think.

"For one, the mortgage interest deduction lowers your tax bill only if your deductions exceed the standard deduction, which is $4,300 for single filers and $7,200 for joint filers. And even if your deductions do exceed the standard amount, you may not save that much.

"Assume your deductions total $10,000, all due to buying a house, and that your tax bracket is 28 percent. If you file a joint return, your tax savings will total just $784 a year ($2,800 x 28 percent). Why so little? Because you could have taken the $7,200 standard deduction even if you had not bought a house."

The article also points out that, "renters who are thinking about buying also need to consider how much they value the convenience of renting."

It also suggests that downpayment money invested in the stock or bond markets may have a better return that housing appreciation.

Published: August 8, 2000

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