Monday, July 18, 2016

Solutions 2016 :: Housing

This is where I have decided to add all my comments about Solutions 2016, Heritage Foundation's report on issues for this election.  This blog post is for the chapter on Housing, pages 49-51.

I am not a government expert, so my comments are from my point of view and based on my limited experience with life and the government.  I read as much as I can, but I don't read a lot of the details of all the bills going through our governmental process, including the Dodd-Frank and some of the other government agencies referred to in this chapter. 

I hear the names Fannie Mae, Freddie Mac, and FHA (Federal Housing Authority) in the news, but they are just another government reference, like the IRS and Homeland Security and the EPA (Environmental Protection Agency).  There is so much government that doesn't seem to directly affect my day-to-day life, I can't keep up with it all.  I suppose I run on the same foundation as all these government offices, "crisis mode."  When I need to know about it, I will search it out. 

This is how so many of our laws, rules, regulations, and restrictions get passed... everyone in the country is trying to survive and doesn't have time to check it all out every single day.  We are left to suffer the consequences.

Groups have formed, like the Heritage Foundation, to try to deal with this time commitment, and they are mostly funded by the wealthy because their profits are tied to these decisions.  They are also trying to survive.  This isn't just a Republican process, the Democrats have their own groups, so do other large interests.  If I had money, I would be doing the same thing.  I think you would, too.

I just want to make sure you know that my opinions are about the issues I see, and this may be a Heritage Foundation document, but it could be any other political publication -- even your daily news, in print or on the TV.  Bias is part of the information process.  We have to try to sift through all this data as best we can... and make our decisions as best we can with that information.

In this chapter of Solutions 2016, there are many references to subsidy applications and government guarantees that bind the tax structure.  We have committed our tax income, or maybe I should say it has been OVER committed, and now Washington is struggling to deal with the consequences of their actions in the past.

I have some of my own opinions about the housing "bubble" we continue to struggle through, but this report says it was caused by government policies that the public sector would not have been involved in.  That may be true, but it was the banks that sold the mortgages.  (I have said elsewhere that I believe someone got the bright idea to sell mortgages like they have sold student loans, but it didn't work the way they thought it would.)  It was the banks that needed to be bailed out... the BIG banks.  A lot of small banks were left to die.

I had to wonder in those days why the banks didn't just work with the homeowners... flex with the crisis... give them more time at the same interest level, or make it better.  Banks had a choice, in my view, to help their homeowners survive their financial struggles so the banks would not have to suffer theirs.  People who had been successfully making their payments suddenly were hit by outrageous interest on their home loans... it didn't have to end in foreclosure, but it did.  Someone profited by this whole crisis... which speaks more to our moral issues than our financial difficulties.

It may have been impossible for the banks to flex with the situation because of regulations about lending, I don't know.  This is one of the things in my "have no idea" files.  I did think that the selling of these loans made the real people in those homes into just a line on a computer printout.  It is easier to force legal rights on people you don't know personally, people who are just a piece of paper.  If they change anything, I think they should change the ability of any financial institution to pass on their loan agreements to anyone.  The ones who make the loans would need to service the loans they make, building their relationship and history with them, and being able to flex when necessary.  I think that would create better decisions and less failure and loss for everyone.

Another issue I see in the conservative viewpoint is with government regulation of business activities, which they seem to think is "intrusion."  If we were all moral individuals and ran our activities in a moral fashion, there wouldn't be a need for laws governing them.  Too much regulation is a hindrance to accomplishing business goals, which includes jobs and profits.  Sometimes these efforts to make the world a better place have a different motivation... to get rid of the competition, to make it easier for them, to control their part of the universe... etc... you get the idea.  In my small efforts to start a business on my own, from a poverty background, I have found the expenses to be very difficult.

When I was living in Hollywood in the early 1980's, some of the people who lived in the neighborhood tried to support themselves by making and selling food to their neighbors.  I imagine that is how they survived in their home countries, and I doubt the health department existed there.  It was wonderful.  I thought it was like the early cart vendors on the corners of busy locations.  They were doing their best to provide for their families in their circumstances.  Not bad people out to poison anyone, just starting from nothing and trying to build a new life.  We have become too regulated when every action to improve one's life is tied to some form of tax income so the government can have a piece of it.

Conservatives hate government housing programs because the people who live in them are just a line on a computer printout.  They have no meaning to them, so they are seen as blights on the taxes they want for their own purposes.  I don't like to live in subsidized housing either... but it is all I have access to at my income level.

I have personally experienced years of housing struggles, with evictions and homelessness, in projects and in programs... they all have their problems and those who benefit by the government's funding to create them.  I call them "planned poverty" because you have to be poor when you sign up, you have to stay poor to qualify when (years later) you finally get contacted, and you have to stay poor (or commit fraud) to keep living in them to remain in the same neighborhood, schools, jobs, and more.  I don't consider subsidized housing to be a good choice for spending tax dollars to "eradicate poverty."

With the tiny home movement, I have been advocating for home ownership for low-income families, homeless individuals and families, and disabled persons.  I have share several of my concepts in other blog posts and at Facebook.  Ownership will bring stability to anyone... and poverty households, especially those with single parents, young children, and those who seem to slip through the cracks of our country's vision for changing the world of poverty, need stability most of all.  It allows them to stay in one place, to have security, to build a life that won't be lost with the next financial crisis.  Tiny homes can be had for a very small investment, and the payments can be made affordable to those who need them.  Using the same 30% of income that subsidies require turns this housing outreach into a profitable investment.

So many options are available, but the government doesn't see them.  All their plans are based on the past models.  I think loans are an election pay-back vehicle, so there may be motives behind these choices.  I really don't know.  Maybe it is too hard to change the way the government works.  I know I had years of failed efforts in trying to do it.

The amounts listed in this chapter are enormous.  One of the ending facts stated that about 5 million people receive housing assistance at an average benefit of $8000 each.  The details are missing so it is hard to judge what the money was spent on. 

In my proposed tiny home biblical loan with a limit of $50,000 over 15 years, the payments would be less than $300 a month... which is affordable for many low-income households, but if there is a financial crisis, the government can flex with it. 

That $8000 expense per person mentioned in the Heritage report would equal over 2 years of homeownership payments, and would be income rather than an expense to the government.  I am guessing that $8000 barely makes one year of subsidized rent payments for the smallest (and usually worst living conditions) apartment in any urban setting. 

In an ownership program, the monthly payments by low-income households would be income for the government.  At the end of the repayment period there would be a small profit for the effort to change a family's life dramatically.  Multiply that small profit by the 5 million participants that go with the $8000 estimate and you have more money to invest in poverty housing. 

This seems like a better idea than budget battles every year to increase tax allocations for poverty housing efforts, with nothing to show for the investment at the end of the year or when a problem rises up to send a family back into the homeless cycle again and again and again....

Subsidies or income, recycled poverty or stability, which do you think are better ideas?

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