Thursday, August 9, 2012

Home is where...?

Tuesday night of this week was “National Night Out” – where communities gathered to be neighborly and to work with local law enforcement to protect their homes.  Beyond security where people live validates the adage “Home is Where the Heart Is” which originated with Pliny the Elder in AD 76.  Cavemen (and women) earned their moniker even earlier than that because of whetre they created shelter.  Where one lives symbolizes so much of who we are.  My recent move to St. Paul, MN from Los Angeles, CA proved the theory.
Neighborhoods help define individuality by the types of shops, cafes and amenities there are – or are not.  I have been fortunate that even in the most challenging times in my life I’ve always had a place to stay.  They’ve varied in quality and I’ve experienced enough sketchy situations to be grateful for what I now have.  Not everybody has that luxury.  According to the National Alliance to endHomelessness there are 636,017 Americans who are homeless. 
There are some homeless who choose the lifestyle – not having responsibility for material goods, freedom to move about – whatever.  This group is statistically quite small.  20- to 25% of homeless have a serious mental illness.   Untreated mental disease is a huge problem that the health care system and the legislative process hasn’t addressed.  The majority of the homeless population, then, doesn’t have shelter due to other circumstances.

According to the U.S. Census there are 132,232,000 homes in the US – 18,843,000 (nearly 19 million) are vacant.  
Fannie Mae and Freddie Mac are the divisions of the Federal Government that guarantee the majority of U.S. mortgages – and this week posted a $5.1 billion profit after U.S. taxpayers bailed out the agencies to the tune of $193 billion.
It would be simplistic and naïve to think that with 19 million vacant homes (that the U.S. taxpayer owns a majority of via Freddie and Fannie) and 600,000 homeless that there might be a public policy solution to both issues.

Government should not be in the business of guaranteeing mortgages – that’s what banks are for, and government should have broad regulations against fraud.  When the Government promises to pay a mortgage if the homeowner doesn’t, there’s no consequence to the bank for a faulty credit decision.  Without any consequence banks have little incentive to be thorough in their lending practices.  Hence financial meltdowns.

This bad policy dates to the New Deal, and changing this fundamental policy that every President since Roosevelt has enthusiastially endorsed doesn’t seem like a productive way to address the issues.  Government shouldn’t be in the mortgage business, but it is now and it will be for the foreseeable future.

Since the Government owns foreclosed and abandoned properties by virtue of having guaranteed mortgages that didn’t get paid, there is an inventory of vacant properties.  There are also hundreds of thousands of Americans who need shelter.  There has to be a way to take those who need shelter and those houses that need occupants and matching them up.  A simple roof over one’s head won’t solve many of the deeply entrenched psychological and economic challenges that the homeless constituency face.  It would, however, be a start. As long as Government is already this engaged in people’s lives, they might as well be effective at it.  Or they should get out of it completely.
My philosophical ideal is that the private sector should solve these issues. I’ll vote and blog and beat that drum to help try and change minds and policies.  Until something radically changes, the fact is the U.S. Government owns a majority of the mortgages of the 19 million vacant properties and can’t figure out a way to house 600,000 citizens.  If that isn't an indictment of the two political parties, I'm not sure what would be.  At the very least it turns the ancient saying around:  Where is home?

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