The American Dream, Deferred: Contextualizing Property after the Foreclosure Crisis

64 Pages Posted: 30 Mar 2016 Last revised: 19 Apr 2016

Date Written: 2014

Abstract

In a few short years, the American Dream has dried up like a raisin in the sun. Massive foreclosures of the mid-to-late 2000s have left the status of the American Dream of homeownership in serious question. In this paper, I argue that in order to formulate new federal housing and homeownership policy goals, the underlying vision of property rights that informs such policy needs to be examined and re-oriented to one that recognizes the nature of property (specifically with regards to residences) as an interconnected and contextualized regime.

In the decades following World War II, the federal government supported homeownership and egalitarian access to such ownership through legal regimes and rhetoric. The form this promotion took - the push for detached single-family houses - maps a model of property rights that values ownership, separation, autonomy, and a particular legitimate version of the "home." Despite this promotion, just before and during the Foreclosure Crisis of the mid-2000s, the federal government all but abandoned this rhetoric and paradigm by moving towards a different model of property rights that treated the house as a commodity, evaluated like an investment and bound by the four corners of its mortgage contract. From this model, it could comfortably limit people's rights to their homes, especially for the 'irresponsible borrowers' amongst them. The use of both of these models has shifted the operation of property as a regime in the United States to the disadvantage of racial minorities in particular.

After setting out this narrative, I argue that analyses of property rights, and therefore also housing policy, should be broadened to encompass two contextual dimensions. Drawing from the experience of City of Baltimore in the Mortgage Crisis, I argue that property and housing policy should recognize (1) the interconnectedness of property as an institution and (2) the importance of the circumstances in which the investment and contract surrounding a house were made.

Keywords: Property, Mortgage Crisis, Foreclosure Crisis, Housing, Race, Inequality

JEL Classification: K00, K11, D60, I3

Suggested Citation

Gupta, Priya S., The American Dream, Deferred: Contextualizing Property after the Foreclosure Crisis (2014). Maryland Law Review, Vol. 73, No. 2 (2013-2014) 523. Available at SSRN: https://ssrn.com/abstract=2755300

Priya S. Gupta (Contact Author)

Southwestern Law School ( email )

3050 Wilshire Blvd.
Los Angeles, CA 90010
United States

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