Pride of Ownership
For a long time I have pondered the lease versus buy decision involved in home ownership. I have owned many homes, both primary and secondary. For a long time I have said to anyone who would listen, that multiple home ownership is a false idol and should not be coveted. I found myself saying that again today about the ownership of a pied-à-terre. I like to do the math for people to show them that it never makes sense to own more than one residence at a time. I am sure that people find my reaction to be disingenuous since for much of the last twenty-five years I have owned three or more homes at a time. It is logically hard to discredit a practice you actively engaged in for years. I actually still “own” two homes, so who am I to talk? But I will stand on the concept that this is a topic I am particularly well versed in and that my history should lend credence to the dialogue.
To begin with, the pied-à-terre as a construct only has convenience to commend it. I am almost certain that with rare exception the cost of maintaining a modern apartment in a city (by modern I mean fully and functionally wired for internet and cable TV) far exceeds the cost of taking a fine hotel room in that city when needed. Convenience is a matter of judgement and experience. If you get boxed out of a hotel room just once, you will probably swear that it is more convenient to own the pied-à-terre. But I suspect that boxing out rarely happens and that the last minute decisions that cannot be accommodated are few and far between. Don’t test me on the “convenience” of keeping clothing there because history will prove that you never have exactly what you want to wear in clean and serviceable manner if you do not live there to maintain that clothing in that way. I will posit the notion that the premium for such a “convenience” is approximately 2X the cost of a good hotel. And then there is the experience of the last fifteen months of COVID when we would never have used a pied-à-terre. You can claim that a Pandemic is an unusual event, but there is always some extenuating circumstance that likely creates that change in plans and the 2X moves up to 3X or 4X at least.
The same fundamental cost math applies to second homes, but a stronger case can be made on the basis of family values. What that means is that as people age and have the wherewithal to afford a second home, they often justify it on the basis that it will be a magnet for the kids who have flown the nest and be a gathering place for the family. I will not negate that concept in the least. I am sure that very often is the case and I will equally agree that one cannot put a price on the emotions of family gathering. In addition, second homes are often especially useful for city dwellers who need space to escape to every or almost every weekend. I find this one of the more rational bases for a second home but would suggest that there is a dangerous line that can be approached and crossed in this. If you get to liking your country home too much (which has probably happened on an accelerated basis during COVID) you may unknowingly move into the territory of more properly calling your city residence that ill-fated pied-à-terre
I have almost run aground on this topic and the cause of that sandbar is the notion of pride of ownership. No matter how much logic and economics I can throw at this issue, I cannot ignore the pride of ownership factor in this equation. I am a big believer in pride of ownership. I can spend hours sitting and staring into the void reaching out from my home or homes and feeling good about the fact that I am sitting one something I own. I have no idea what causes this feeling, but it is very real and quite palpable. I am convinced that pride of ownership is responsible for more underutilized and unproductive assets in the world than any other factor.
Many more enlightened people take note of the fact that any of us at any time is at best temporary residents of this world and ownership is just an illusion we use to make ourselves feel more powerful in the vastness of the universe. The truth is that we control very little in our lives compared to the randomness of events. Ownership of real assets (note that we consider property “real” estate in the Anglo Saxon tradition) is supposed to make us feel that we have some degree of permanence to our lives. I don’t actually think we need true permanence, but rather, permanence to the extent of our natural lifespan. We can fall into the trap of thinking we can control our world beyond the grave. Estate planning tries to do that, but unless you are Rockefeller or Ford (and even their foundations probably are coming to the end of their lives sometime soon), you probably can’t control things longer than your children’s lives. And here’s the thing, your children and their children will most likely resent you rather than think fondly of you. Perhaps the worst of it is that the property that you treasure and imbue with all that pride of ownership is often no more than your personal white elephant or albatross.
So, I now have two properties that I enjoy and will admit to extremely high sense of pride of ownership about both. The Ithaca house, Homeward Bound, is a source of pride because I recreated it from a derelict and have “owned” it for twenty-five years. It is a link to my upstate New York roots. It is tied to my mother, my children, my grandchildren, and to my personal Wonder Years at Cornell. It is also the perfect bucolic Eastern country property with summer fireflies and winter howling snows. That makes it very different from my hilltop out here where my pride has to do with panoramic Western views and elaborate and blooming gardens, increasingly of my own making. I have only owned the house for nine years and lived in it for a bit over one year, but it feels like home to us and is expected to be our retirement home in which we age out. Nevertheless, it is Ithaca, which I will see again in a month, that epitomizes the best of both worlds. Why? Because I have all the pride of ownership one could have in a long-held property, but it is only a leasehold, with the University owning the ground lease in perpetuity. It makes me think that all property should be in leasehold versus freehold, except with humanity, the country or maybe the planet holding the ground in perpetuity. But hey, that’s the reality anyway. Both properties will be here long after me and mine and even any memory of us will exist. As it should be. My real pride is in understanding and accepting that reality, and that I can own forever.