Obama the Socialist: The Government Becoming the Landlord for a lot of Americans
The Obama administration may turn thousands of government-owned foreclosures into rental properties to help boost falling home prices.
The Federal Housing Finance Agency said Wednesday it is seeking input from investors on how to rent homes owned by government-controlled mortgage companies Fannie Mae and Freddie Mac and the Federal Housing Administration.
The U.S. government rescued Fannie and Freddie in September 2008 and has funded them since the financial crisis. The mortgage giants own or guarantee about half of the nation's mortgages and nearly all new mortgages.
At the end of last month, the government owned roughly 248,000 foreclosed homes, officials said. About 70,000 of those are listed for sale. But officials expect the number of foreclosures to soar in the coming months.
Many foreclosures have been stalled so attorneys general and federal regulators can investigate whether lenders cut corners and improperly handled thousands of cases. Once a settlement is finalized, foreclosures are expected to pick up again and further depress home prices. . . .
More support for the government as landlord theory comes from other media. This is from Politico:
The administration says that the move will help increase private investment in the housing market, while increasing the availability of affordable housing.
“As we continue moving forward on housing finance reform, it’s critical that we support the process of repair and recovery in the housing market,” said Treasury Secretary Timothy Geithner. “Exploring new options for selling these foreclosed properties will help expand access to affordable rental housing, promote private investment in local housing markets and support neighborhood and home price stability.” . . .
The counterargument appears to have won out here. While the political climate in Washington remains largely hostile to a bipartisan agreement on how to reform the GSEs, the Obama administration may be able to use Uncle Sam’s indirect ownership of a large portion of the housing mortgage inventory to address lingering problems with the housing market.
All this sounds awfully positive. Here is the problem: if renting out property made sense, the federal government is hardly the only entity that could do that.