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December 19, 2008
Keeping Up Property One Owns
Offering assistance to steer foreclosed neighborhoods away from blight is a worthwhile goal, and the collection of initiatives recently announced by Governor Carcieri and Senator Reed seems properly targeted. It does seem, however, that the actual owners of the properties (i.e., banks) get a pass on the whole problem.
Increasing the risk of lending money to homeowners — by increasing the responsibilities of banks should the owners fall aside — could have disagreeable consequences, but I'm not sure why taxpayers should wind up on the hook for other people's economic transactions. Don't stagnant and decomposing houses cost banks money over time?
Perhaps banks could contrive some sort of low-income rental system for maintenance purposes, or maybe the state could develop a rent-maintain-and-fix program.
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I haven't read the whole initiative or what its intent is but if it would allow someone like me to buy a multi-family at a greatly discounted rate, not what the previous owner still owes the bank from a purchase 4 years ago and is $100,000 over the current value, and then give money for renovation, in exchange for creating affordable housing and rent controls, I'd do that in a second.
Give me ownership of the house, give me some money to fix it up, and I'll rent it out under the "affordable housing" laws. That would make sense. Everyone wins. Me as an entrepreneur, and the low-income as having some nice, new affordable housing.
And if that sounds too good to be true, a friend of mine does exactly that, but on a much larger scale. He gets gov't money to renovate multi-thousand units in various locations around the country and makes them all affordable housing and/or section 8.
Posted by: pitcher at December 19, 2008 10:33 AM