POLITICAL observations & opinions

* Instead of trying to sell all those foreclosed homes, why doesn’t some entrepreneur assemble a package and rent them, turning wasted assets into productive ones

Posted by Lew Weinstein on May 25, 2011

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A New York Times editorial (5/25/11) …

  • … nearly two years after the recession officially ended, the housing market is still in trouble.
  • sales and construction have been flat for two years, while prices, driven down by foreclosures, are plumbing new depths.
  • This isn’t just bad news for homeowners. Selling and building of houses are one of the economy’s most powerful engines.
  • Until the market recovers, the entire recovery is imperiled.

read the entire editorial at … http://www.nytimes.com/2011/05/25/opinion/25wed1.html

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LMW COMMENT …

  • Maybe it’s time for a different idea.
  • Instead of trying to sell all those foreclosed homes, why doesn’t some entrepreneur assemble a package and rent them, turning wasted assets into productive ones.
  • The banks (and whoever else) holding the mortgages don’t have the resources and skills to organize such a program, but they could (and should) support it by taking their deserved “haircut” on the excessive mortgages they extended during their period of excessive greed.
  • The government could offer rent subsidies on a sliding scale based on income. What are the potential benefits of such an approach?
    • The housing market would be freed of unsellable properties which are depressing sales of all properties.
    • Some businessmen could make a profit.
    • Some poor people could have a decent home to live in.
    • Homeowners would have a better chance to sell their homes.
    • Workers could afford to move to wherfe there are jobs instead of being stuck in unsellable homes.
  • I’m sure there are issues I haven’t thought of, but why not put it on the table and see if it makes sense.

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