A Good Housing Idea Has Some Traction

July 22nd, 2011 at 10:30 pm

I still like this idea of avoiding decreasing the overhang of unsold housing stock by putting foreclosed homes on the rental market instead of the housing market.  So glad to see it getting some attention.

Note that according to the piece, Fannie and Freddie would sell foreclosed homes to investors who would agree to keep them on the rental market until the housing market improves and home prices start rising again (then the investors could sell them if they chose to).  So the US gov’t isn’t the landlord, which is a useful policy wrinkle.

Maybe try this out in a few places where the housing glut is most severe, like Florida or Nevada.  It’s often useful to start with a pilot program in a few places with new ideas like this—typically, we learn important lessons early on re implementation.


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4 comments in reply to "A Good Housing Idea Has Some Traction"

  1. foosion says:

    Why is the govt not being a landlord a useful policy wrinkle?

    If there are investors who would buy houses in order to rent them out, and they’re paying market prices, why do you need a govt program – they can just buy on the open market? If they’re paying less than market prices, why is it better to subsidize these investors rather than just hire management companies or manage directly?

    If the govt had been just holding the houses, selling or renting them out would just increase supply, which is hardly a great policy to reduce a housing glut

  2. Peter Baldo says:

    Single family dwellings are normally built to be occupied by their owners. They are fairly fragile and high-maintenance. Single family dwellings intended to be occupied by renters would be built differently, I think.

    Renting out foreclosed homes may lead to a rapid deterioration of this housing stock, and a decline in value. Investors may be better off just holding the properties.

  3. jo6pac says:

    Sounds like the good olds of the S&L were tracts of homes were sold to investment groups to be rented out. It’s amazing there are no knew ideas out there. Why not just leave the people that are in the house in place? Help the citizens and not the investment class, they’ve done enough for Main Street already.

  4. c l albers says:

    A small thing, but putting a time along with the date of the posting of an item is helpful to many readers. Helps put the comments in context re timing of events and more current information.