This would reduce housing inventory, increase rental housing, get property off the books of the GSE’s, and decrease the deficit - assuming they are sold at something close to market value (maybe 60%) and by contract only available to rent.
It might also provide sort of a stimulus to the economy so opposition might be fierce.
This story just came out today. I like it. Expect it to be controversial.
Housing is governed locally. If an area is not zoned for multi-family dwellings, it’s going to be rather difficult, especially if the local residents fight against a zoning change.
They would be rented out as they were built. Why would a zoning change be necessary?
It’s not building new homes. It’s taking existing, foreclosed homes and renting them out. I misread as multi-dwelling. In any case, if an area is not zoned for renting, that requires a zoning change.
I’ve never heard of an area that is not “zoned” for renting. Do such exist?
I have heard of covenants that restrict renting, such as with a Co-op or Condo. Rentals are approved by the Board, with an eye to keeping rentals under a fixed % of total units.
Sure, but that’s not “zoning”.
I don’t think it will do what it’s being promoted as doing. I can see where it will get the properties off the agencies’ hands, that’s obvious. But it doesn’t do anything for the overall housing market.
Anyone who is renting a unit in one of these foreclosures is not going to be also buying a house elsewhere. To the extent that the program is successful, it will lower the price of rentals, and also lower the price of purchases, since sellers will be competing against more appealing rentals.
Looking at the big picture, there’s only a certain number of people in this country, and they are occupying a certain number of apartments/houses. This is the “demand” for housing. If you do something which increases the number of people occupying houses, then you increase demand for housing. If you just market one segment of the market in a tempting way, then you just help out that segment while hurting the others. Sort of like rearranging deck chairs on the Titanic, as the metaphor goes.
From this perspective, what ails the market at this time is not the large number of foreclosures. The large number of foreclosed houses is a symptom of the problem, not the cause of it. What ails the market is the large number of people living in their parents’ houses or basements rather than living in their own apartments/houses. And this, in turn, in undoubtedly tied to the job market. Turn the job market around, and the housing market will turn around with it. Other than that, nothing is happening.
[There are other factors as well along these lines, including an apparent decrease in illegal immigration, also due to the economy.]
I would add that many of these (foreclosed) houses are in bad shape-Detroit, anybody?
The fact is, a typical American wooden house needs constant maintainence to remain viable-and having people living in them (who do no upkeep) means that many of these houses will be trashed.
I see many abandoned/bank-owned houses, and I’m sure lots of them have bsted pipes, roof leaks, internal damage, etc.
The bulk packaging of these units for rental investment reminds me a bit of the packaging of mortgages for securitization. The devil is in the quality control.