Posted on 02/02/2010 6:45:30 PM PST by TigerLikesRooster
Feb 1 2010, 9:00 am
by Daniel Indiviglio
Barney Frank: The Poor Should Rent, Not Own
In its final installment of the Big Think's "Went Went Wrong" Series on the financial crisis, they interviewed Financial Services Committee Chairman Barney Frank (D-MA). Much of the interview was predictable: Frank mostly explained what anyone closely following the financial regulation push in Congress already knew. But there was one fascinating gem in discussing where Fannie and Freddie went wrong. Frank views ushering the poor to own homes as a mistake and believes they should rent instead.
Frank was responding to the question about how Fannie and Freddie could be structured to avoid moral hazard and a too cozy relationship with the regulators. After stating that we should separate the liquidity creation function from the subsidy objective (which we already knew he supported), he said:
I think the answer is you separate out the function of providing the equity in general for the mortgage market and doing some subsidy and in my judgment, the subsidy again, as I said before, should be focused on affordable rental housing, not in pushing low income people into owning homes that they can't afford.
Can I get an "Amen!"? If someone cannot afford a house, they should not be encouraged to purchase a house. The logic couldn't be simpler. And yet, over the past decade it was utterly ignored. I've never understood why renting is viewed as so shameful or low class. I've rented my entire adult life. I once had a supervisor pushing 50-years-old with a wife and two kids that probably made over a million-dollars-per-year, and he still rented.
(Excerpt) Read more at business.theatlantic.com ...
So what did Barney Frank sit on this time?
Oh wait, hey look I have a opponent in the election.
Talk about politburo, their seat means more to them than life itself.
We must prosecute! we must make it a point to demand from our newly elected oficials to commence hearngs on crimes commited against the American people. Lets make this happen! If we don’t punish those responsible they will continue and set a president for future political criminals
Way to drag the country through a financial hell before recognizing the obvious BAwney
my wife and i were married in ‘73 as well.
Come on Bawney, Roll the Dice a little bit more with Fannie and Freddie!
So our governing(or should I say RULING?)class who pays itself enough to own, now thinks ownership is out of reach? It kind of reminds me that we pay the educrats enough to put THEIR kids in private schools. I want my country back.
ping
Why is it then that Sara is calling for the firing of Rahm and not for the firing of Barney and Chris? Don't get me wrong! I agree with you, but I disagree with the GOP push to solve the real problem......
btt
Meanwhile he has become one of the rich, ruling class elite landowners while never having any job besides that of "public servant".
How does that scam work that all these lifelong elected parasites become wealthy??
And the Democrats' arrogance has many people reaching the point of storming the Bastille with pitchforks and clubs.
Just like Obama, this clown has no inner conflict with saying exactly the opposite what he has gone on record stating in the past.
Their scam is based upon the assumption that we will not break the law. Why don’t we break the law? Because we believe that is what is right, partly, but also because we are still comfortable enough where we are. And there is still more they can take from us, spitting on us while they do, and we won’t do anything. I shudder at the thought of what may happen if/when Financial Armageddon finally hits.
Depends why they’re poor. The hopelessly dysfunctional poor obviously shouldn’t own homes, but it’s not clear that they should be renting either. They should probably be housed in supervised institutional settings.
People who are functional should be nudged towards owning their homes, because renting is a virtual guarantee of continued poverty. On a month-to-month basis, there’s nothing inherently less expensive about renting vs. owning. On a long term basis, renting is staggeringly more expensive than owning.
One big step that should be taken to make ownership a viable option for the functional poor, is to outlaw building code provisions and zoning laws that make it illegal to build, sell, or inhabit very small, modest homes that functional poor people can afford. The standard building code has gotten bloated to the point where it rivals the Internal Revenue code, and many jurisdictions add their own extra provisions to it.
In moderately to very densely populated areas, it’s reasonable from a public health/safety standpoint to require connection to either a sewer or septic system, and to require that attached homes or homes that are just a few feet from another home have very basic fire safety features (e.g. roof jumps for rowhouses, barriers between floors of multi-story dwellings so that fire can’t jump from basement to attic in mere seconds), but beyond that, it should all be thrown out as infringement on property rights. There are very few places in this country where a poor person can legally build themselves a one room shelter from scrap wood and discarded old windows and move in. And I don’t think there’s any place in the country where someone housing their children in such a dwelling wouldn’t be subject to either being forced into public housing or having their children taken away, even if the children were perfectly healthy and well-fed and the home was clean and tidy.
Government regulation has driven up the minimum price of housing beyond what many of the perfectly functional, working poor can afford. Laura Ingalls parents would be arrested and lose their children today, if they lived in the hand-built cabins, sod-houses, etc, that they raised their wonderful family in.
In a rational world Frank would already be swinging by his heels from a lamp post.
>> People who are functional should be nudged towards owning their homes, because renting is a virtual guarantee of continued poverty. On a month-to-month basis, there’s nothing inherently less expensive about renting vs. owning. On a long term basis, renting is staggeringly more expensive than owning.
Foreclosure is an even better guarantee of continued poverty.
Debt is a bad thing for everyone — it is a worse thing for people who are already broke. Renting isn’t ideal, but it is the best option for broke people. It is ideally a temporary option while debts are paid off and a nest-egg saved up ... but, if that never happens, its better to rent forever than to build a mountain of debt that you cannot handle.
Being house-poor is functionally no better than just being poor — except you have the added bonus of owing the bank a big pile of money that you don’t have.
SnakeDoc
Bottom line — a home-ownership should be a blessing ... but, for the impoverished, it is often a burden. Renting is less of a burden, thus a better option in many cases of actual poverty.
Broke people shouldn’t buy expensive stuff.
SnakeDoc
Uhmmm, using Barney and straight in the same sentence. Thought you would get away with it.
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