Priced Out

[daredtowork]

152. Housing as commodity

Both Bernanke and Yellen are keeping the economy on life support primarily by making loans very cheap for people doing massive development. This means hiring people for construction. These development projects are sold and resold to investment funds. The property is valued according to area desirability and local speculators try to pump up values. They are abetted by local property owners who want the equity in their own house to grow as much as possible.

By the time new apartments are built, the money sunk into construction already requires high returns, even for "affordable" housing. We have to stop letting private developers loot HUD funds for housing that will turn out to be unaffordable anyway. We need to cultivate more nonprofit and public interest construction on public land trusts to compete with the market. We need rules to tax and recapture windfall profits on rents and plow that back into housing. Policy should be steered as much as possible back toward the American dream of home ownership. Local tax and waiver policies could although so support that.