Gov't Housing with a twist?

[greencharlie]

How could the Federal Gov't help with housing?

Use the power of economy of scale...

WHAT IF a non-profit Gov't organization contracted with a builder(s) to lay down huge tracts of houses? And the resulting price might be... $40,000 for a single family home? Have these communities connected into the nearest big city with public transportation and give incentives for malls, stores and shopping to set up shop.

I REFUSE to believe that if you have 10 BILLION in the bank, cash... you can't contract someone correctly to build affordable housing. If you go into Home Depot to buy a Moen faucet it's $75... now go to the factory that makes them for Moen and offer to buy a MILLION faucets... you think they'll be $75? How about $9? I BETCHA' they can build a really nice 4+2, 2000SF house for $40,000 that would allow families to have a home AND have a place for their older retired parents...

And then finance the homes, interest free... 120 months @ $333 per month...

This would help the coming retirement bomb.

What am I missing?

[leftofcool]

1. Several things missing.

You are not taking into account the price of the land on which to build these homes. All land is owned by someone or the government or the state. You may be able to get the building materials for 40K but have you considered electricians/plumbers etc...? These people have to be paid a fair share. And then, there would be the problem of sub standard building materials....

[greencharlie]

3. public land? nt

[OneTenthofOnePercent]

2. Increase supply... lower the market price.

You would end up hurting the local market prices in which people currently reside. If you owned a $130,000 2000sf home and the government is selling brand new 2000sf homes 1 mile down the road... your home you bought for $130k+ is worht SIGNIFICANTLY less now. Most current homeowners would find themselves underwater very quickly and you would see a new HUGE wage of forclosures and people "walking away" from thier mortgages.

Building houses to make them affordable ignores all market effects from doing so. TERRIBLLY short sighted and would give us a financial situation much worse than we are in now.

Did you know that banks are currently sitting on alot of the defaulted laons and not sending the homes into forclusure to keep them OFF the housing market for that very reason? This makes sure the price of homes stays more valuable and the bank can recoup more of the defaulted loan. If you supplied mass cheap housing and banks' real estate invenstments (and current homeowner's investment) would diminish.

To address your point though... yes it could be done. Probably pretty easily.

[greencharlie]

4. maybe...

I was thinking more like 10-20 miles outside of a major town... connected with public transportation.

For example... go to Dallas and then look 20 miles to the East. It's darn near 100% farm and ranch land. Maybe some gov't land mixed in there too...

[OneTenthofOnePercent]

5. Why not build large apartment complexes and just charge ~$350/month?

Why houses? Apartments are far more efficient in terms of housing people for the least amount of money.
Then people could live as near to where they work as possible.

[greencharlie]

8. true...

but the allure of a single family home is important, too... but absolutely, a huge Soviet-style building is possible, too.

[ieoeja]

11. Now you're talking about "the projects". Which proved to be a horrible idea.

The unintended consequence of that is segregating poor people. It ultimately perpetuated the poverty. Worse yet, the youth seeing themselves in such bleak surroundings form gangs. Many of the gangs of today are an unintended consequence of the idea you propose.

Housing First is a good idea. But you have to blend that housing in with everyone else.

[ieoeja]

6. You're talking about HUD.

Which had an $80B budget in the '70s and a $20B budget today. And none of that budget goes towards the creation of new housing any longer, only towards the maintenance of existing homes.

So you are not actually suggesting anything radical. Just a return to what we did pre-Reagan.

[NoNothing]

7. We already have a surplus of housing stock

And tract housing is incredibly wasteful, compared to, say, a high-rise complex. Are you factoring in the costs of fresh water for lawns? And sewage and runoff? Road maintenance, car pollution, police and fire coverage, all those other externalities?

This idea is especially silly for retirees, many of whom end up selling their homes and moving into apartments or condos, because they can't or don't want to keep up with the physical demands of home maintenance.

[greencharlie]

10. I meant good for retirees, meaning they could live with family. nt

[kctim]

9. Why not

just spend half of that $40,000 and just remodel the govts first attempts at housing?