Category Archives: Housing Crisis

House Hunting

The Trib reports that the Duluth City Council wants to address the issue of homelessness. I found these two paragraphs pertinent:

“According to the Maxfield study which was done in April of 2014, at that time it was determined that we needed approximately 2,482 units of rental housing for people who earn 50 to 80 percent of median income. Of those 2,482 units, we’ve only actually successfully created 336,” he said.

“We’ve just barely touched the need for that particular group, and that contrasts with the need for full-market-rate apartments,” Anderson said. “It was determined that we needed 1,092 of those units. Well, guess what? We’ve overdone it there. We’ve created 1,318 units.”

Perhaps tonight when I attend the Mayor’s State of the City Address at Lincoln Middle School at 5:30 she will address the issue of homelessness in Duluth. I wish her well. I think other Mayor’s and City Councils have done the same in the past.

At the moment the Duluth Schools have some empty buildings that a few developers have looked at for “market rate” housing. That’s for people in the market who can pay full freight. However, as someone who serves lunch once a month at the Damiano Center and whose wife comes home with stories from the CHUM Shelter and who regularly hears about students in our schools who have no home I’m well aware that the growing economy is still leaving folks behind who can’t afford market rate housing. It will be so much better when the Ryan Plan goes into affect replacing Obamacare so that those without insurance can return to scavenging health care in our emergency rooms.
or as Scrooge said “If they would rather die,” said Scrooge, “they had better do it, and decrease the surplus population.”

And while they are doing it they can live on the streets. God forbid America’s 2,043 billionaires would have to pony up more taxes to even things out. At least President Trump’s taxes can go down now that he’s dropped a billion dollars in the ranking.

Banks (worldwide) caused the sub prime housing bust…

…Not lending to poor Americans in the ghettos. I can believe this:

Indeed, this might be the biggest obstacle to pushing the false narrative. How did U.S. regulations against redlining in inner cities also cause a boom in Spain, Ireland and Australia? How can we explain the boom occurring in countries that do not have a tax deduction for mortgage interest or government-sponsored enterprises? And why, after nearly a century of mortgage interest deduction in the United States, did it suddenly cause a crisis?

More bursting bubbles

From Megan McCardle who, if you get the end, seems to worry about the consequences of government inaction in the U.S. as well as in Ireland.

the looming Mortgage War will pit recent house buyers against the majority of families who feel they worked hard and made sacrifices to pay off their mortgages, or else decided not to buy during the bubble, and who think those with mortgages should be made to pay them off. Any relief to struggling mortgage-holders will come not out of bank profits – there is no longer any such thing – but from the pockets of other taxpayers.

Sounds a lot to me like the Savings and Loan crisis in the Reagan years.

Subprimed

Who is responsible for the mortagage mess? The seeds were sown in 1999 at the end of the Clinton years. Barnie Frank was a cheer leader for the changes. He’s in political trouble today. Then the Republicans killed Glass-Steagall also in 1999.

This is the concluding paragraph of a premonitory story written in 1999:

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

The Virtue of an extinct breed – the Housing crisis foretold

I found this comment about one of my favorite Congressmen, Iowa’s Jim Leach, in a piece by a long time critic of the Federal Government’s inattention to the looming Housing Crises. Of course, sensible Repubicans like Jim were largely hounded out of the Republican Party.

Jim Leach, a Republican former representative from Iowa, … argued two decades ago in Congress that the government-chartered mortgage companies, Fannie Mae and Freddie Mac, were unfairly insulated from the real world.

They were not subject to the same financial standards and tax burdens as their competitors, he warned, and if they ran into trouble, an implicit government guarantee to back them up meant taxpayers would be left with the losses.

“There are times in public policy making that one can feel like Don Quixote,” Mr. Leach said of his repeated legislative battles to rein in the two companies’ growth.