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June 16, 2008

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Clarice

To focus on one of the many points made, what is the real fairness in subsidsing housing for able-bodied, healthy work-aged citizens?

The reason I ask is because unless we give a house located in the most sought-after area to everyone who asks, it seems unfair to leave anyone behind.

And aren't those who would be left "behind" the working people who paid for their homes without government support?

No one asks these unpopular questions, but either we give a house to everyone, locate them wherever they choose, or everyone should have to work for what they can afford.

Freemarket

I think that Clarice's questions are right on target.

JessieX

Ditto on Clarice and Freemarket.

Here's a trend prediction: Expect to see affordable housing FOR Millennials become a government priority, on the local, state and national level. Millennials are just pushing at the edges of young adulthood, with their eldest 26 in 2008. The generational trend is that whatever age bracket/life experience Millennials (Hero archetype) occupy, is where government money and adult attention goes.

So, as a GenXer, I think the whole affordable housing conversation needs to be revisited. The Silent Gen, ages 66 above in 2008) are the wealthiest generation alive. It's time, methinks, for their generation to show some kindness and sensitivity and return many of their entitlements to the public till.

Not much of anyone cares about the welfare of Boomers, except Boomers. GenXers know that institutions, on the whole, won't be there for them and they are not, as a generation, the recipients of public dollars and good will. And, Millennials, well, their life course is that whatever age group they touch becomes important vis-a-vis institutional dollars.

So, I certainly don't expect much of anyone to understand or agree with what I'm saying today. But tuck this Trend Alert into your brain somewhere. I'd bet money on this trend coming forth with full power in the next five to ten years, as Millennials come of age, marry and start families.

As long as you understand that affordable housing for *all* will not be the issue. It will be affordable housing specifically for Millennials.

That's my two yuan.

Oh, and bringing it all back to politics, the politicians who understand this trend will do well. Those who fight it, won't. (Prediction #2)

Hayduke

No homeowner pays for a house without government support.

How is it fair for the federal government to spend close to three times more each year on housing for wealthy homeowners than it does for all of its "subsidized" housing programs for the less well-off?

People gotta live somewhere, even perfectly healthy people who make $7/hr cleaning toilets. I certainly don't think everyone has an unfettered right to live wherever they want, but I find it hard to argue against a community creating housing opportunities for those who help support it.

Freemarket

I would rather see fairness in the housing market than subsidy. The mortage interest deduction that HD refers to is an unfair subsidy. Subsidized housing for some and not others is unfair. The lottery system of allocating subsidized housing is unfair (and unethical).

A fair market will produce a fair outcome, yet government is intent on making that impossible. I think "fairness" is a good argument against a "community creating housing opporunities for those who help support it".

O'Cleary

I would rather see fairness in the labor market than the housing market. Sanitization of restrooms is critical, as is trash removal; I'd argue more critical than any CEO job (based on one person's experience with restrooms and boardrooms).

If we're to remove the deduction for home interest then banks must stop the outrageous front loading of interest known as ammortization schedules.

Freemarket

O'Cleary, I will be happy to borrow all the money you will lend me that uses some sort of amortization method that does not "front load" interest. Be the change you want to create. I think you will very quickly see the fallacy in your thinking when I am arbitraging you.

O'Cleary

FM ..the change you want...

WTH. None of us can be the change - maybe you have been under a rock or otherwise not hearing the news. Personally, all my income goes toward paying off the real estate. As for lending money, what gives you the idea that I have money to lend to people who can't live within their means, temporal or otherwise?

Freemarket

"As for lending money, what gives you the idea that I have money to lend to people who can't live within their means, temporal or otherwise?"

It was your mastery of both real estate finance and labor economics.

Hayduke

How is government (elected by you and I, by the way) "intent" on making the housing market unfair?

What would you do to correct this unfairness?

Freemarket

I won't repeat examples of unfairness that appear in three other comments, one of which is your own. But the intent of government to make the housing market unfair is clear from their actions. To fix this unfairness requires the gov't to give up their practice of redistributing wealth.

Just curious, what do you think Stacey Spann or anyone else has done in Ho Co to make the housing market "fair"?

O'Cleary

Now, it's been a while since I borrowed money for a car so maybe things have changed. But as I recall, a finance fee is assessed that is based on an annual percentage original balance and term, and the same part of the payment goes toward principal each month. If you pay the loan off early, you strip out the remaining interest amounts and multiply the monthly principal times the remaining number of months.

That is not what mortgage payment/amortization does - amortization refigures the principal and interest each month based on the new principal and remaining periods in the loan. When constrained by a payment amount added to enormous number of periods, the payment splits very little, ridiculously little to the principal and a ridiculous amount to interest.

Instead of amortizing the mortgage this way, it could be handled like the car loan - predetermined portion to principal and interest throughout the life of the loan. Why not?

Who is Stacey Spann?

Hayduke

I don't think the intent is to make the housing market unfair. You may perceive the result as such (and, indeed, in many cases it may be), but perspective matters a lot in this discussion. These instances of "unfairness" are perfectly rational responses to circumstances -- e.g., annual housing allocations are the result of existing residents feeling overly-burdened by the pace of growth and the impact it has on their lives. The intent is clear, and it's clearly not about making the housing market unfair, though that may be a consequence; whether it's the right policy decision is a whole other question.

More broadly, government is not an abstraction and discussing it as such serves largely to obfuscate the fact that its direction, leadership and policies can change at regularly scheduled intervals.

Also, Stacy Spann is the director of the county's Department of Housing and Community Development, the department charged with working "to provide affordable housing opportunities for low and moderate income residents of Howard County."

Clarice

The intent may not be unfair, but when government subsidizes housing costs the result is unfair; unfair to those who work and pay for homes without the government, and unfair to those who could use assistance but are left behind.

Either everyone gets a home located where they choose, or no one does. That's fair.

Marshmallow Man

Your author here...

I saw in yesterday's fishwrap that Courtney Watson has decided to not include New Town zoning in her proposal. Could've told her that wouldn't have flown!

Hayduke

Clarice,

I hate to fall back on pedantic clarifications, but I wasn't arguing with FM about results. I was arguing intents. Regardless, I don't think the results situation is quite so black and white. After all (and not to beat a dead horse), the mortgage interest deduction has for decades tipped the results of government intervention in the housing market to the most well-off members of our society. I don't want this to devolve into a class-based battle, but to argue that subsidizing housing for the less-well-off is in some universal sense "unfair" to the rest of us is at least a bit disingenuous given the full context.

On the continuum of unfairness in housing, it's renters who are the most royally screwed by governmental housing policies, but I don't often hear voices crying out for their rights.

Freemarket

HD, it was clear from Clarice’s comment that he or she understood quite clearly your arguments about intent. But that is not what this is about. Personally, I found your focus on intent to be very strange and distracting from the real issue. No one knows the intent of politicians (or anybody else for that matter), and it really doesn’t matter because results are much more important.

Government intervention in the housing market creates unfairness. Some of this unfairness goes to the well off, some to the less well off. This does not mean that everything is a wash and fairness is magically restored. Clarice raised a very good point.

Hayduke

I hate to say "you started it" but you started it.

"A fair market will produce a fair outcome, yet government is intent on making that impossible."

And: "But the intent of government to make the housing market unfair is clear from their actions."

And now you're moving the goal posts. Again, I'm being pedantic but you gotta say what you mean. For instance, you could have said: "A fair market will produce a fair outcome, yet government intervention won't allow a fair market." Or some such.

But, whatever. At the foundation of this discussion is a core disagreement between the two of us that we'll never budge on. We have different conceptions of fairness, too, which is another reason we don't really talk to each other as much as we talk past each other.

Freemarket

I don't think you are being pedantic so much as you are side stepping the issue. But, as you said, "whatever".

O'Cleary

There is another reason to resist the temptation to "help" people by giving away real estate paid with taxpayer's money. The recipient of this "help" looses the relationship between work and acquisition. We've then taught them dependency with all the trappings, it's human nature to learn from experience. When we give "help" in this way we neutralize people's ability to control their own destiny. Shameful mistake to feel good about ourselves - it's an easy policy to support and difficult to resist "helping" when we know we can.

We're a free country - people CAN be what they decide to be, proven time and again. But we have to let them be free in order to allow this lasting and fulfilling method of achieving control over one's own life circumstances.

Planting people from unaffluent circumstances into affluent-looking (mostly debt-ridden) environments does nothing for long term prospects including the children of those "helped".

Here is where post-secondary education support would do much more than a real estate lottery.

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