And So I Go: Yesterday, Today and Tomorrow

Yep.  Barney Frank, Chairman of House Banking Committee is at it again trying to regulate housing .  It wasn’t enough that he and Senator Dodd between them caused the mortgage bust that we are still suffering from but now he is changing his mind and going in another direction.  We can hope that he decides to retire from the House before his newest ideas have an opportunity to take root.   (sigh) that’s something like wishing on a falling star and believing in the tooth fairy.

Unfortunately neither the tooth fairy, Easter Bunny  and not even God will help us when Frank gets a wild idea and in his arrogance pushes it thru  into actual policy regardless of past history and  experience showing all of us but him that his idea stinks.  BB

Don’t Need More Rental Subsidies

Posted by Tad DeHaven

At Tuesday’s congressional hearing on the future of Fannie Mae and Freddie Mac, Rep. Barney Frank (D-MA) said that “It’s a mistake for the government heavily to subsidize home ownership.” Coming from one of the biggest cheerleaders for federal home ownership subsidies, and an architect of the housing meltdown, a conversion from Frank would be welcome.

Unfortunately, Frank followed the comment with a call for more rental housing subsidies:

“We are much better off trying to subsidize rental housing, because when you put people into decent rental housing, you do not confront the problems we have seen putting people inappropriately into home ownership.”

Frank is correct that tying oneself to a mortgage is much riskier than renting. The federal bias toward homeownership has been predicated on its alleged civic virtues, but there’s no virtue in being a slave to an expensive mortgage, especially when one’s house is worth less than the note.

But the government’s dismal experiences with rental subsidies, including public housing, demonstrate that more federal interventions are unwarranted. In addition to abolishing home ownership subsidies, the federal government should also abolish rental subsidies, as a Cato essay by Howard Husock argues.

The following are some key points from the essay:

• Before federal subsidy programs were begun, and before the widespread use of detailed housing regulations and zoning ordinances, private markets did a good job of provided housing for lower-income Americans. During the period from 1890 to 1930, for example, vast amounts of new working-class housing were built in American cities. Data from that period show that a significant percentage of residents of poor neighborhoods did not live in overcrowded tenements, but instead lived in small homes that they owned or in homes where the owners lived and rented out space.

• Since the 1930s, the federal government has funded one expensive approach to low-income housing after another—without seeming to notice that the new approaches were made necessary less by market failure than by the failure of past public policies. Public housing projects erected to replace slums soon became severely distressed, housing vouchers meant to end “concentrated poverty” instead moved it around, and the low income housing tax credit program provides large subsidies to developers and few benefits to low-income families.

• A major social benefit of private and unsubsidized rental and housing markets is the promotion of responsible behavior. Tenants and potential homeowners must establish a good credit history, save money for security deposits or down payments, come with good references from employers, and pay the rent or mortgage on time. Renters must maintain their apartments decently and keep an eye on their children to avoid eviction. By contrast, public housing, housing vouchers, and other types of housing subsidies undermine or eliminate these benefits of market-based housing.

• Federal housing subsidies are very expensive to taxpayers. In 2010, the federal government will spend about $26 billion on rental aid for low-income households and about $8.5 billion on public housing projects.

Just so you understand that what Frank says happens you might want to prepare yourself to perhaps contact your Congressman about this and the insanity of it.  Here are a few more articles packed full of information about the subsidized housing and why it too is a ever growing cancer eating away at our national budget and encouraging behavior that keeps people in poverty.

Give aways never work.  NEVER!  They merely put, and keep, people on the government dole.  And it could be argued that housing subsidies are racist.  yes, racist!  Take a look around the public housing or neighborhoods in your town with a lot of low income rental which in all likelihood  are in the Housing Subsidy Program from HUD.  I will lay you 10 to 1 that the faces you see are mostly black.   As Star Parker says in her book, “Back on Uncle Sam’s Plantation”   the people you see aren’t ever likely to get ahead or get out of poverty.  It’s just easier to let someone else pay your way.

Be truthful with yourself and ask yourself if someone came in and paid your rent or helped with your mortgage would you  give it up and stand on your own two feet, or would you take that “free” money?  Most of us would rationalize that “Heck yes, if they want to give me money then why not take it!?”   Few would look beyond and see that taking someone else’s money is stealing.   BB