The Rent Is Too Damn High — And It Doesn’t Have To Be

[eridani]

http://billmoyers.com/2014/12/01/housing/?utm_source=General+Interest&utm_campaign=f4a3eb8686-Midweek12031412_3_2014&utm_medium=email&utm_term=0_4ebbe6839f-f4a3eb8686-168317741

The rent is too damn high, and here are some reasons why: Demand for rental properties is way up. Millions of families lost homes in the crash. Others, who might have been able to secure a loan to purchase a home when the banks were handing mortgages out like candy are now unable to meet stricter lending requirements that were put in place after the bubble burst. According to Census data, today’s home ownership rate is around four percentage points lower than it was before the Great Recession.

Supply isn’t keeping up. The crash brought new housing construction to a screeching halt. Typically, builders add around a million housing units per year to keep up with population growth. But between 2008 and 2010, we added only a half million units, and two million more in the three years since then.

<snip>

But the Section 8 housing program has faced a series of cuts, including deep reductions as a result of the sequester. And when tenants leave project-based Section 8 housing, they lose the subsidy. So they tend to stay put, and there are long waits for apartments to open up. What’s more, there aren’t enough tenant-based vouchers to go around, and that waiting list is long, too. And then many landlords refuse to accept the tenant vouchers.

A simple change to the Housing Act requiring landlords to accept the vouchers would resolve the latter problem. Increasing the program’s funding — or at least restoring it to pre-sequester levels — could help deal with the former.

Then there are outside-the-box ideas that could make an impact. Economist Dean Baker has long advocated that families who lose their homes to foreclosure be granted a “right to rent” their properties at market rate for an extended period of time. This would help on the demand side of the equation by keeping people in their homes rather than moving into rental units while those bank-owned properties sit idle. It’s been endorsed by experts from across the political spectrum — and a bill has been introduced in Congress — but so far the idea has gained little traction within the Beltway.

[LiberalElite]

1. When I see more and more

"luxury" rentals going up in NYC I think to myself "more housing for people who don't need it."

[Odin2005]

5. I've read that It's essentially fake housing for foreign speculators.

[Travis_0004]

2. If somebody can not afford their mortgage, how can they rent their house at market rates?

Market rate rents are almost always higher than the mortgage payment. A landload does not have some tax benefits homeowners have, and they have to make a profit on top of rent.

[Trillo]

4. You're not supposed to make sense.

Seriously, it's a great question.

[pipoman]

3. The bipartisan agreement that led to the bubble burst

Is what caused the problem in the first place. The Democrats and Clinton administration pushed an agenda to loosen mortgage requirements. ..reduction of down payment requirements, debt to income requirements, and credit rating requirements put people who really had no business buying homes at all or a lower valued home into difficult financial situations. The rethugs had been trying to reduce regulations on banks regarding cash reserves and other lending requirements. The deal was made to accomplish both and the results were disastrous.