To own a house in America was once the can’t lose path to financial stability and wealth. Buy all the house you can, with as much as leverage as possible, once was considered the smart thing to do. Now rows of houses sit empty in some cities. In Motown, one in four houses is vacant writes Catherine Rampell for the New York Times.
A foreclosure notice has been served to one in 171 houses in Las Vegas, where some homes had been converted into pot hot houses. College students are moving to the comfort of the suburbs because it’s cheaper than dorm living on campus. Swimming pools are now skate board ramps.
Not exactly what Herbert Hoover had in mind with his “Own Your Own Home” program. Housing was to be the glue that kept American society together. Homeowners had something to lose, so hire all the cops required to keep the neighborhood safe and keep any foreigners away that might want to destroy our way of life and the vast freedoms we enjoy, like white picket fences, and an asset that can be leveraged to the hilt with government-subsidized moolah guaranteed to appreciate always and forever.
But things are different now. Post housing boom and bust, demographic multiplication has suddenly slowed to a trickle, as Rampell writes,
Household formation has slowed dramatically since the recession, as cash-strapped families double up and unemployed recent college graduates are unable to leave behind their parents’ couches. To judge just from demographic statistics, more than a million households that should have been formed in the last few years weren’t, according to Mark Zandi of Moody’s Analytics.
And how long will the 11 to 15 million underwater homeowners keep feeding Fannie, Freddie and the rest of the TBTF brigade? It only took Larry Crowne (Tom Hanks) one class from Dr. Ed Matsutani (George Takei) and a bank that wouldn’t negotiate for him to do a cinematic strategic default (called strategic foreclosure in the film) with no shame or regret.
A new feel-good movie ending: The hero gets the girl (Julie Roberts) and walks away.
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Out of my 20 or so neighbors who all bought in my then-new subdivision in 2007, exactly one family is left. There were two as of last week, but one family moved out this past Friday and are just letting the bank foreclose. Fortunately, most homes were sold to nice (but not as nice) families and so the neighborhood is still okay.
About 1/4 mile down the road, the next housing subdivision is hurting, with lots of renters and a heavy sprinkling of section 8 tenants. Section 8, of course, is an extremely effective government program designed to administer the coup-de-grace to ailing middle-class neighborhoods. Sky-rocketing crime rates at the next housing division worry me a bit. How soon before the section 8′ers figure out there are nice places to plunder just down the road?
Picture an idyllic tropical island, low tax jurisdiction, with an economy based on tourism, with luxury retailers on a tourist shopper dependent strip–and completely gutted government estate one block away. Government owned and Section 8 (” voucher”) housing in our community has been turned into safe houses for criminals preying on tourists. The housing estate is one block from the main tourist area. The criminals knock down handbag-holding female tourists and return to their “fort” with the loot.
One day, while assessing the private FMV of a few of these units, I stumbled upon at least a dozen ladies handbags just inside one abandoned house. Private proposals for the estate have been ridiculed by the local “Housing Authority.” Instead, these bureaucrats wish to aid and abet the destruction of our island’s hospitality industry.
I hope those of you living on the mainland and expats will choose the presidential candidate that has pledged to abolish the Housing and Urban Development (HUD) and many other government agencies.
A few years ago Atlantic Monthly ran a piece suggesting that maybe section 8 housing correlates with increases in crime. The blog and letters to editor section blew up with outraged “housing experts” saying that to even suggest such a thing is rank racism tinged with gross ignorance. lol
HUD needs to be eliminated. Saving nearly $50B is reason enough to end this program. Why do we need to be foder for the socialists or hater-mongers? Just close it down immediately.
I live in a two unit flat. About a year ago, the upstairs tenant moved out and it sat vacant for a couple of months (rent was too high for the market). No problem, Section 8 to the rescue.
Now I have a ever-changing parade of welfare “gangsta’s” parading in and out at all hours. No one works. They sleep, eat and party, trash the yard, make themselves generally obnoxious, park whever they want and dare any white “racists” to do something about it. They leave their heater, lights and music on at all hours, since they don’t have to pay the bill, and dont’ worry about “getting along”.
Naturally, I’ll be moving soon and another section 8 will come in behind me. They pay over maket and guarantee rent and utility payment. Unsuspecting landlords think they are getting a deal.
What irks me above all else are those who think this has anything to do wtih racism. These are people who don’t try because they don’t have to. Anything they get “off the grid” is pure profit. They can buy drugs, but can’t “find” a job of any kind. Why should they? They live in exactly the same appartment I do.
If you need any more evidence of the harm this kind of program does to everyone touched by them, directly or indirectly, you need look no further than the nearest section 8 tenant.
…the NY TIMES just noticed the housing boom & bust story ??
But it is amazing how all the “news” in the world fits exactly into the NY TIMES each day.
But sometimes they can’t fill all the pages, so they add comic strips, séance material from people channeling good old Keynes and ludicrous pulp fiction by writers from the American Enterprise Institute, cunningly disguised as editorials and commentary.
The New York Times doesn’t have a comics section. I’d bet money they’d sell more copies if they did.
Yes, they do.
I agree. The NYTimes and its brethren are usually behind the sites I read by 6 months to 2 years:
LRC, AntiWar.com, Mises.org. The stuff Tim Swanson and Mark Thornton wrote about on China is finally being talked about on the WSJ.
Its amazing how people still believe in the concept of home “ownership.” The fact is that no one in America really ever “owns” their home. Even if you pay off the mortgage,just refuse to pay your property taxes and see who actually owns your house. You may have an equitable interest in your home,but you will never own it. In the end, all 10 planks to the Communist Manifesto have been implemented in America. Maybe its Communism lite, but it is still Communism. The concept of Constitutional Property Rights has faded into history. You have about as much “right” to your property,including the fruits of your labor,as the man in the moon.
You own your home you just don’t own the land it stands own. Don’t pay your property taxes while loading your house onto the back on the semi and leaving that patch of land is a-okay.
So… motorhome then?
About 20 years ago we had a membership in a local camping club. The Wife, 2 kids, and I lived in a 22 foot travel trailer for 3 years, total cost was around $100/month.
If I was young and single I would get a class C RV built on a truck chassis and a swing shift or graveyard job. During the day I would sleep in a city or county park. Or maybe an Alaskan Camper on pickup. (Camper top goes down, easier to drive and more secure when parked)
Many full timers join Thousand Trails or equivalent.
No property taxes on this island, but unless one is a so-called “indigenous islander” one can’t purchase the land fee-simple.
It is the government that perpetuates racism and discrimination while ignoring the U.S. Constitution and the Bill of Rights.
The “blowback” from this government-led ethnic discriminatory policy has not been beneficial to most indigenous islanders.
For indigenous landowners who must borrow money on mortgage (if it is even possible to borrow on property-secured mortgages now), the premium is 400 to 700 basis points above U.S. mainland rates. Needless to say, the island has some of the highest foreclosure rates in the United States–actually displacing many indigenous landowners from their fee simple properties.
The property market has collapsed from 50 to 90 percent with fewer buyers in the marketplace.
For brevity sake, and to windup, it has been a horrible policy.
OK, no one own’s their home because . . . the same argument shoots down the silly claim of self-ownership.
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