“Because Public Housing Is Better?
Hat tip to William for pointing out this strange plan from San Diego City/County:
A San Diego city-county task force is considering ways to buy empty homes — before speculators and investors swoop in — and reserve them for lower-wage workers, many of whom were shut out of the housing boom when home prices rose out of their reach. (In December 2005, the median home price in San Diego reached $500,000.)
Jim Bliesner, director of the City-County Reinvestment Task Force in San Diego, is proposing that a nonprofit group or a local housing agency purchase homes priced under $400,000 that have been on the market for six months or more. “It would be turning lemons into lemonade,” he says.
Mr. Bliesner worries that speculators will convert some low-priced, foreclosed houses into low-quality rentals. “A speculator is not going to have much of a margin to rehab these houses or upgrade them,” he says. “We want to fix them up and stop neighborhood blight.”
Mr. Bliesner says he proposed the idea of a bulk purchase of foreclosed homes to Washington Mutual Inc. executives Friday, and “they didn’t say no.” The Seattle bank said the discussions were “very preliminary” and no details have been discussed.
The task force is examining ways to finance such a purchase by floating a bond or attracting private investment from banks, which might partly satisfy the banks’ federal community-reinvestment requirements, Mr. Bliesner says. Some of the houses might be set aside as affordable rentals, says Tony Young, a member of the San Diego City Council and co-chairman of the reinvestment task force.
This one is odd for a couple of reasons. First, if they are only purchasing homes that have been on the market “six months or more”, it hardly sounds like speculators are rushing to “swoop in.” Consequently, prices are likely to fall further. Why reserve homes with declining values for “lower-wage workers” when higher wage earners aren’t willing to buy them?
Then there is the question of why San Diego providing “affordable rentals” is better than speculators providing “low-quality rentals”? Since when has it been shown that public housing is better for stopping “neighborhood blight”?”