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Source link: http://archive.mises.org/11283/housing-upside-down/

Housing Upside Down

December 18, 2009 by

[In 1947, Arthur W. Binns, president of the National Home and Property Owners Foundation, wrote the following short essay for American Affairs, Vol. 9, No. 1, p. 37.Download PDF]

Very seldom do the proponents of public housing say frankly that they believe in the socialization of property. They talk of there being a place for public housing. They talk of just a little public housing. There may be those who believe honestly that it is possible to have just a little public housing. It is no more possible to have just a little public housing, than it is possible to have just a little cancer.

He who advocates public housing as a permanent national policy advocates the permanent nationalization of all property. Let us stand on this issue and on this base make our decision.

The question is properly asked, ‘What is the alternative? How may a good house be provided for every American family in the shortest length of time?’

The answer to this question lies in the second, third, fourth, and fifth-hand house.

I believe it to be completely absurd to reverse the whole normal process of distribution by supplying new houses on the lowest level of consuming power.

We could never have achieved the miracles of distribution which have been achieved in this country by this inverted process. Always we have distributed the new article, the most advanced article, to the man who is best able to buy it. By the simple process of depreciation, this new product has then passed from hand to hand until the very poorest man in the whole community had a product many times as good as the one which he originally had, before the first purchaser started the thing off at the top.

It is obvious that only a minute percentage of our whole population can ever have new houses. One only has to consider the fact that a very small percent, perhaps 1 percent or 2 percent, of the total houses in the country can at any one time be new, so that most of us, no matter what our incomes may be, or our standard in the community may be, occupy used houses throughout the majority or all of our lifetimes.

Just for fun, I made a search in my own family not long ago and I find that on neither side of my parents has there been a new house in the family for over three generations.

If we are sincere, therefore, in desiring to provide a good home for every American family, in the shortest possible length of time and if we are not seeking, in disguise, to sell national socialism under the cloak of housing, the thing to do is to pour into the top the greatest number of new houses for those who are in the market for them.

When our builders succeed in providing 100,000 new homes for people who can afford them, for perhaps seven, eight, or ten thousand dollars’ purchase price, they automatically provide 100,000 new homes for people less able to pay — homes, not new in construction, but new to the family who will occupy them.

Housing, you see, is like a taut chain — when you lift the top link, you lift every link in the chain.

{ 4 comments }

billwald December 18, 2009 at 11:06 am

The US is still rich enough to provide people who are legitimately disabled because of physical or mental problems with public housing. My gripe is that people who are disabled and will never be able to support themselves do not need to live in the states, the counties, and the cities with the highest housing costs.

Why should people in Seattle – $450K median house price – build public housing inside city limits when the same tax money would buy twice the housing units in Spokane or four times the units in 40 other states? An old person who lived here for 40 years, OK, but I suspect half of our welfare cases are “aliens” who came here because our welfare system pays well.

People who came here to get on our welfare system don’t want to live in North Dakota? Breaks my heart!

I would love to live in San Francisco but can’t afford it on my pension. If I was on welfare I could “afford” to live in any large city in the US.

It also gripes me that half the working people in the Seattle area who pay the taxes that go for low income housing are, themselves, making less than 20 bucks an hour. The guy making 20 bucks an hour is subsidizing the guy making 8 bucks an hour flipping hamburgers or clerking at 7-11. The guy who owns the 7-11 pays a little more in property taxes but no where near what it would cost him to pay a living wage to his employees.

I propose this problem could be resolved with a minimum wage of 25% of the numerical average of the median and mean wage in each metropolitan area.

bob December 18, 2009 at 11:55 am

Here in New Orleans this principle was shown quite clearly.

Our public housing projects are mostly admitted by failures by the vast majority of people. Some have recently been torn down.

Brad Pitt and co. decided that in post-Katrina it would be a smart, charitable thing to build those who lost their homes or are otherwise poor brand new “green” homes in the 9th ward, an area prone to severe flooding.

While this seems like a nice gesture and is making actual progress, it seems backwards. I don’t see how the recipients can afford the property taxes. I see it going badly in the long-run.

billwald December 18, 2009 at 12:30 pm

Sort of changing the subject . . . but agree 100%. Correct me if I am wrong. but I suspect that many of the lost houses had been in the family for a generation or so – they were not making house payments. A mortgage company would have required sufficient insurance to cover their loss. (If a guy “buys” a house with zero down and loses it, he hasn’t lost anything.)

I don’t think the majority of poor people will ever move back because they can’t afford to. I think NO will be the next “Phoenix” real estate bubble for retired people. Look and the condo prices in the downtown area. If I was 30 years younger and had the guts I would have tried to buy up square blocks of destroyed houses.

Vincenzo Vanhoozer July 7, 2010 at 1:53 pm

You cannot believe how long ive been googling for something like this. Scrolled through 5 pages of Yahoo results couldnt find diddly squat. One search on Bing. There you are!…. Really have to start using it more often!

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