First, an estimate on how many "really bad mortgages" there are. The 2006 census says there are 126M housing units, with 66% ownership rate. 83 million people "own" their houses. I'm having trouble finding up to date information, but in June 2008 about a million were in foreclosure. Probably more by now. That's a percent or two of the 83M which seems reasonable.
As of 2007, estimates are that New Orleans is still missing 40% of it's pre-Katrina population, which was roughly 200,000 households. So 80,000 former New Orleans households are (possibly) still looking for a place to live.
Part of our stimulus plan should be for the government to buy out roughly 50,000 of the foreclosures, then offer this housing at moderate cost to those still displaced by Katrina who have not "landed on their feet". By removing 5% or so of toxic mortgages from the market, this will help put some floor under the housing market, boosting property values. If we guess that these mortgages are underwater by $100,000 each, the total up-front cost to the taxpayer is a mere 5 billion. The housing is in areas that already have their infrastructure, so we recover some of this expense by lower costs rebuilding New Orleans. And when the next big hurricane hits the Gulf Coast, this plan will save money and lives.
What's best, we are using "underwater" housing to help those whose housing was actually underwater. :-)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment