Homeownership Has Always Impacted American Democracy

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25-03-2025

Model homes sit vacant in the center of a 750-home housing development where construction was halted November 20, 2008 in Rio Vista, California. Credit - Justin Sullivan—Getty Images
Land and property ownership have colored American politics since the very beginning of our democracy in New England in the 1600s. Broad land ownership challenged the economic and social divisions that prevailed in Europe. It helped foster political equality among white men settlers, because most of them met the property qualification to vote. Land would become a cornerstone of the effort by America's Founders, such as William Penn, Thomas Jefferson, and James Madison, to distribute power across society, which they saw as integral to protecting liberty and democracy.
Today, however, democracy is facing challenges in part because the pathways to real estate ownership are increasingly out of reach. The homeownership rate in the U.S. has dropped from 69% before the 2008 economic crash to roughly 65% today. Even more troubling, the dramatic increase in home prices since the covid-19 pandemic twinned with supply constraints have put the housing market on ice. Over 70% of Americans who planned to buy a home in 2024 could not do so.
These trends are exacerbating economic inequality. They're also pushing people away from political participation. Scholarly research shows that homeownership enhances the tendency to engage in politics, from participating in city council meetings, to donating to candidates, to turning out in local elections. Deliberative and participatory local democracy of the sort that has a long pedigree in America is withering as a result.
Small-scale farming became a mainstay of the economy in colonial New England. Settlements were initially laid out as fairly compact townships with modest plots of land to enable farmers to support themselves. The public land survey system systematized settlement at the end of the 1700s and stipulated a method for subdividing townships into sections and lots. Land speculators and companies carved up large territories into family-sized plots to sell at affordable prices to the growing ranks of settlers and their many children. Because land in New England was divided equally, so were property taxes, access to education, and, ultimately, political power.
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The result was a form of participatory governance and local democracy. Town hall meetings with votes on local considerations and laws became emblematic of this style of democracy.
After the Revolution, American self-governance in the North became fundamentally rooted in ideals about average citizens participating in a locally rooted democracy even as the plantation system and slavery prevailed in the south. Early political figures and observers pointed to small-scale landholding and the farmers who toiled that land as a bedrock of democracy. As Jefferson put it, small farmers 'are the most vigorous [citizens], the most independent, the most virtuous, and they are tied to their country, and wedded to its liberty and interests, by the most lasting bonds.'
The early American republic built that principle into policy as the U.S. acquired land through conquest and treaty-making. The government doled out millions of acres of land in small plots as bounty to soldiers enlisted to battle Native Americans, fight in the War of 1812, and confront Mexico in the Mexican-American War.
The model of subdividing tracts of land into small plots eventually expanded to the Midwest and was replicated through the 1862 Homestead Act, which granted settlers 160 acres of land in exchange for a promise to farm it. This law turbocharged western settlement. Settlers embarked on hundreds of experiments in local democracy, even as they also dispossessed Native Americans from the land in the process.
These forces helped spur democratic innovations that eventually spread: Western states led in the movements for women's suffrage, the direct election of senators, and the use of the secret ballot.
Despite that, widespread land ownership was not universal in the post-Civil War U.S., nor did it live up to democratic ideals for all. In the West, settlers and the U.S. government repeatedly stripped Native Americans of land, which consigned them to shrinking reservations. The government also refused to afford Native Americans the vote. Meanwhile, in the South, the dashed promise of Reconstruction strangled the possibilities for land ownership. Initially, Union General William T. Sherman had promised freed slaves '40 acres and a mule,' in the hopes of breaking southern land concentration and empowering newly emancipated Blacks as fully free citizens with valuable economic resources.
But that promise crumbled and President Andrew Johnson ordered most land confiscated by the Union returned to its white owners. This consigned most former slaves to sharecropping. It deprived them of the resources necessary to escape from Jim Crow segregation and repression. It also meant that they were shut out of the opportunity to acquire land and greater freedom through homesteading in the West.
As the U.S. became an increasingly urban country beginning in the 1910s, the focus on land ownership for many Americans came to be channeled through what was on top of the land: housing. Home ownership began to define the American Dream. It enabled people to build a family and intergenerational wealth.
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The World Wars and the Great Depression helped to forge this link. Labor and supply constraints during World War I caused a housing shortage that stirred public concern over the spread of both disease and communism. The United States Housing Corporation tried to tackle the problem by financing and directly building homes at a large scale for wartime workers.
But it wasn't a long-lasting solution. Instead, many Americans again struggled with homelessness in the early years of the Great Depression. Shantytowns known as 'Hoovervilles' (named for President Herbert Hoover) sprung up as makeshift housing.
After defeating Hoover, President Franklin D. Roosevelt created the Federal Housing Administration (FHA) in 1934. The FHA sought to expand homeownership at a massive scale by insuring private mortgages to make them more widely available, stimulating home construction through building subsidies, and protecting lending institutions.
The Servicemen's Readjustment Act, better known as the GI Bill, was the next major effort to spread homeownership and accordingly expand Americans' stake in democracy. Passed just after D-Day in 1944, the bill aimed to provide a pathway to the middle class for soldiers returning from war. It offered support to go to college or start a business, as well as home loans and loan guarantees.
The GI Bill intended to help reintegrate veterans into civilian life and give them a successful and vested interest in American democracy. It also sought to avoid a repeat of the discontent among World War I veterans, which culminated in a dramatic march on Washington and a tense standoff with active duty troops. The GI Bill fostered the construction and purchase of millions of new homes and helped fuel robust post-war economic growth.
And it came at a time of broader anxiety over housing—which could have left Americans disillusioned with their government and disengaged had it not been addressed. Frustrated by slow homebuilding, zoning restrictions, soaring rents, and construction bottlenecks in the post-war era, President Harry Truman declared that, 'The lack of adequate housing marks a glaring gap in our achievements toward fulfilling the promise of democracy.'
While the success of the GI bill spurred greater civic engagement and political participation, the effects of these federal housing policies were uneven. Black veterans, for example, faced myriad obstacles to using the GI Bill to access housing benefits. States administered the benefits, which meant that racist practices—especially in the Jim Crow South—undermined Black access to housing. It also had limited effects on women.
That had implications for American democracy. The inability of Black veterans to access home loans left them segregated and sidelined from democracy even after the Voting Rights Act. Practices like redlining deepened that marginalization. Obstacles to home ownership left Black families poorer and less educated than whites, disparities that helped to drive lower rates of voter turnout among Blacks in southern states than in the rest of the country until the 1990s, and lower turnout than whites until the 2008 election.
The large gap between Blacks and whites in homeownership remains, and beginning with the 2008 financial crisis, home ownership has also become increasingly out of reach even for many white Americans. The lull in homebuilding following the financial crisis along with onerous zoning restrictions and land regulations have fueled an ongoing housing shortage. Inflationary pressures and supply chain disruptions during the pandemic exacerbated the problem.
With home prices and rents soaring, many Americans are now deprived of the opportunity to build generational wealth through land and home ownership. The rise of institutional investment in housing has also made people more vulnerable to eviction and to neglectful or abusive landlord management practices. Such practices disproportionately harm Black Americans. The resulting housing instability has driven down voter turnout and decreased civic engagement.
Rekindling the spirit of democracy rooted in property ownership and the American dream is going to require a building boom and more affordable housing. And it necessitates renewed attention to supporting minority communities, which have long been marginalized from the broad home ownership that is so integrally linked in democratic participation.
Michael Albertus is a professor of political science at the University of Chicago, and author to Land Power: Who Has It, Who Doesn't, and How That Determines the Fate of Societies. You can follow him on Twitter/X @mikealbertus
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