Federal Government Housing Rental Program
A friend sent me a question via email today asking my opinion on a housing related question; thought I'd share:
Question:
"Randy, what happens when the majority of America walks away from their home knowing that it is toxic waste? How does America respond to that? It's going to happen and the Government knows it. Will they reset values? There is no end to this. Just talking. Wondered what your thoughts were."
My Response:
Agree the housing market is completely toast (bottom is still several years away), and this will lead to a tectonic/deep-rooted transformation to the American dream and desire of owning a home. Ultimately, it will take generations to forget the massive pain this ponzi schemed housing marked brought to millions of Americans... However, people will still need a place to live, and the banking system/US Gvt will be stuck with TENS of MILLIONS of foreclosed homes... With few qualified buyers however, the Gvt will have no option but to get into the "rental business" .... and during the course of the next decade, you will see millions of people who were previous "homeowners" transition to Gvt "renters"... Over time, it will become the "new norm" for America.
As a matter of fact, it's already starting: Obama Administration Aims to Flip Foreclosures to Rentals
Feel free to share your thoughts...
posted by Randy @ 10:13 AM
11 comments
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11 Comments:
With few qualified buyers however, the Gvt will have no option but to get into the "rental business"
in Canada I cannot imagine the Federal Government being the landlord. I don't think things in the States are that much different. It just cannot be done.
In the States there are a lot of "accidental landlords". They are home owners who cannot sell but say some income is better than none. They discover all the laws that protect the renter, the renters that don't pay on time and the ones that wreak the place. The landlords that survive are hard and smart. How is the US Federal Government going to do this?
I don't have an answer just yet 45North, but hypothetically speaking: Could use a hub/spoke relationship starting with a new National housing office that sets standardized rental policy that is implemented via state and local offices; inventory would come from Fanny/Freddy and or a myriad of other future (TBD) nationalized banks...
Cheers
Randy
Hell, the OBama Administration might even want to appoint a new Housing Czar to come in and put solutions in place; like assembling a network of experts from across the US that will aid in developing an accurate picture of the current real estate supply and demand dynamic for every location (as we know, real estate is local)...
Another thought: It would be a great way to offer housing subsidy programs too... Just think, the Gvt will provide cheap rental housing and all you have to do is vote for the creators/implementers of this policy...
Tens of millions of homes? I doubt it.
It might help to know how many actual homes carry a mortgage, then how many are going underwater, then how many of those will eventually revert back to banks.
There are pockets of disastrous housing numbers,in some cities but tens of millions?
I don't think so.
Seems to me the bankers and the fed set the whole show up to where they get all the houses and property without having to face up to what they actually did. It's just beautiful. They get the houses and get the taxpayers to foot the bill via freddy and fanny and other various slight of hands.
Kind of like the inflation scam.
Must be great fun to be able to make up rules and money and call it 'gods work'. Wow!
2 > 1 ?
my wife and I went to Guadalajara last week, we (and everybody else on board US Air Flight 191) stopped in Phoenix. Until then the furthest south I had been was New York City.
Mexico was just great! Beautiful and friendly. If I lived there I would learn Spanish.
The Leader of Her Majesty's Loyal Opposition in Canada, Jack Layton just died. Very shocking.
This comment has been removed by a blog administrator.
What happened to you? Why is the page not being updated? I really enjoy it and have been reading it for a long time.
Hi Randy,
Your post dated December 2005 is not allowing comments, some I am posting this here.
T H A N K . . Y O U ! ! !
Thank you for the sanity of your blogs posts in the now seemingly bygone era of housing bubble insanity.
I wish you were on the Federal Reserve back then ... instead of, say, Timothy F. Geithner.
Federal Reserve transcripts from 2006 have just been released. Following is a link to the NYTimes.com reporting on the transcripts:
http://nytimes.com/2012/01/13/business/transcripts-show-an-unfazed-fed-in-2006.html
EXCERPT:
The transcripts of the 2006 meetings ... clearly show some of the nation’s pre-eminent economic minds did not fully understand the basic mechanics of the economy that they were charged with shepherding. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in economic forecasting models that turned out to be broken.
“It’s embarrassing for the Fed,” said Justin Wolfers, an economics professor at the University of Pennsylvania.
END OF EXCERPT
Randy, nothing will surprise you in this retroactive view into the flawed "group think" that resulted from a failed vetting process designed to keep purge or keep out dissenting voices from meaningful positions of power.
God only knows what hell is yet to follow from Timothy Geithner now being elevated to Treasury Secretary.
Regardless, thank you again for your writing.
This release of the Federal Reserve minutes (sadly) vindicates that you were right.
I, for one, thank you for helping me understand way back then when the Greenspans, Bernankes and Geitners of the world would all have said you were wrong.
Best regards,
g
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With few qualified buyers however, "the Gvt will have no option but to get into the "rental business" .... and during the course of the next decade, you will see millions of people who were previous "homeowners" transition to Gvt "renters"... Over time, it will become the "new norm" for America."
If this should happen, the government's control, and therefore factual ownership of all real estate (factual ownership is already implicitly established via coercive property taxes) will be made explicit, and the US will be identical to the Soviet Union in this regard.
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