The Never-Ending Housing Bailout Continues

Thursday, February 25, 2010 , , , , 2 Comments



Suddenly my crappy little overpriced hideout in San Francisco doesn't seem all that crappy.

There was no heat or hot water, so for weeks Mary Fountain would fill a bowl and put it in the microwave, then strip off her extra layers to sponge herself clean.

Upstairs, her longtime neighbor, 70-year-old Geraldine Davis, peers skeptically out at her balcony, hesitant to step onto the cracked concrete. The last time the city inspector came by, he told her he was afraid to walk out there.

This Bronx apartment building, where city housing violations have increased from 82 to nearly 600 in 16 months, is among thousands of rental properties from Los Angeles to Harlem showing a creeping decay as housing values collapse and funds for repairs dry up.

As landlords find themselves owing more than their properties are worth, some have simply walked away, leaving garbage to pile up. Others have disappeared into bankruptcy, with unpaid utility bills. Some have tried to reduce their losses by neglecting basic maintenance.

"There are 100,000 apartments teetering on the edge" in New York City alone, said Harold Shultz, senior fellow at the Citizens Housing and Planning Council. "And depending upon the way various winds blow, they could fall over."

(via KTVU)

It's cool, all we need is another bailout and everything will be fine, right? It's only 100,000 apartments. In NYC alone. Um... $1.5 billion? For what exactly?

RealEstateRama:

President Obama announced a plan to provide five states hit hardest by the continuing housing crisis with funds to assist distressed homeowners. Nevada, Arizona, California, Florida and Michigan will share $1.5 billion based on a formula to be created by the Treasury Department. According to the White House announcement, the funds would be able to be used for a variety of activities, including assisting homeowners who have lost their jobs with their mortgage
payment, and assisting homeowners in refinancing underwater mortgages.

While these are worthy goals, homeowners in these states are not alone in their need. The National Low Income Housing Coalition encourages the White House and the targeted states to address the very real problem of renters losing their homes in foreclosure.

NLIHC estimates that 40% of the households who lose their homes due to foreclosure are renters whose landlords have defaulted on their mortgage. After eviction, many of these families face the very real possibility of becoming homeless.

Don't necessarily buy anything that comes from the NLIHC, they're complicit in Barney Frank's bizarre backdoor bailouts (Open Market):

As described by a press release from the National Low Income Housing Coalition (NLIHC), a group that has long pushed for the [Affordable Housing] trust fund, “The bill as passed … diverts half of the money intended for the housing trust fund in its first year and 25% in its second year. After that 100% of the funds go into the housing trust fund.”

Although Frank has been described as angry about the compromise, the fact is the committee has already given him about four-fifths of what he has always proposed. The NLIHC press release calls the Senate Banking bill a “milestone” and boasts that “the National Housing Trust Fund Campaign has moved one step closer to accomplishing its core goal: establishing a housing trust fund at the federal level with a dedicated source of revenue.”

It's exciting that the nationalized housing project is working out so well for everyone. Even more stunning, the government continues to believe that it is best equipped to serve as financier, maintenance man, and landlord. Really guys?

So actually, even if these troubled "homeowners" (who should in fairness be called debtors) got some help from the government, would you really want to call it help?

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.