Forbes: Federal Policies Are Making Houses Unaffordable

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via forbes:

The Senate Banking Committee held two hearings on housing finance reform last week, proving once again the truth of that old adage: The more things change, the more they stay the same.

If the Senate witnesses looked familiar, that’s because they were. Many of them had testified in the House last December, and virtually all have long been on record supporting an expanded federal role in housing finance. They want more federal subsidies, more financial guarantees, more regulation, and more standardization. They also want to impose more fees on homebuyers to pay for ill-defined plans to make housing more affordable.

What they most definitely do not want is anything that resembles a true competitive marketplace for housing.

Not invited to the hearings were free-market think tanks such as The Heritage Foundation, American Enterprise Institute, Cato, R-Street, Mercatus, and the Competitive Enterprise Institute. Conservatives, of course, all want less federal subsidies, guarantees, regulation, and standardization. For views such as these, there was no room at the Banking Committee inn.

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If the committee’s antipathy were limited to conservative think-tankers only, there are also plenty of non-think tankers it could have brought in to hear a diversity of opinions on housing finance reform. For instance, the committee could have invited the folks from the Bryan/College Station Habitat for Humanity affiliate.

I visited the Habitat folks a few weeks ago, and it turns out they see the federal government as getting in the way of their mission. They want to provide more families with affordable homes, but federal policies keep making it harder for them to deliver. (Here is a Daily Signal report and video spawned by the Texas trip.)

As Charles Coats, Habitat’s director of homebuyer services put it:

This is not a game, and people are getting hurt by America’s bipolar view of housing. A home can’t both be a safe, wealth-building, ever-increasing value investment and affordable.

At the federal level, policies have been enacted for decades which allow and push people to buy more and more house as an investment good, and at the local level, often the city governments act as if their reason for existing is to protect wealthy homeowners’ investments through stringent zoning, ordinances and building codes which squeeze the already small pool of affordable rental and ownership housing options to the point of extinction. At the same time, these same government entities then continue to throw more and more money at the “affordable housing crisis” that they themselves are responsible for creating!

Charles and his colleagues are dedicated to giving people a firm foundation to improve their lives, thus helping to build solid, sustainable communities. They do not give away houses or any sort of hand-outs. (They call what they do giving a hand up, not a handout.)

They work carefully with prospective buyers to ensure that they are creditworthy, and they require 500 hours of community service, much of which consists of literally helping build other people’s homes. They work together so that habitat homeowners and their neighbors feel invested in their community.

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