Wednesday, April 04, 2007

Affordable Housing

My local newspaper included an article today entitled, "State Mulls Housing Bailout", which focused on a potential emergency bailout by State of Minnesota housing officials designed to assist homeowners facing foreclosure because of their risky mortgages. The article went on to note that the State of Ohio's Housing Finance Agency plans to issue $100 million in taxable bonds for re-financing "1,000 sub-prime and exotic mortgages into conventional fixed-rate loans."

I can't help but think that the combined impact of the numerous government agencies involved in the housing market partially caused this current mortgage meltdown. Here are some random examples and thoughts regarding government intervention in the housing market:
  • Taxes - if the government REALLY wants to achieve the goal of affordable housing WHY should our monthly mortgage payment be a taxable event?
  • Affordable Housing - perhaps the numerous affordable housing programs run by various governments fundamentally undermined the market forces that manage supply and demand of housing thus these programs probably moved people into housing they could not afford.
  • HUD - the federal department of Housing and Urban Development built thousands and thousands of public housing units, many of which we have demolished in recent years, which no doubt undermined the personal pride and self-reliance that comes from home ownership. As these people left the public housing projects how many of them purchased homes for the first time after having lived a subsidized life in our nanny state? It is this very nanny state that undoubtedly left these people unprepared for actual homeownership since they were programmed to be wards of the state, not homeowners.

Free housing comes with a price,


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