Read the linked article

Photo taken from CURE website

Star Parker is a smart, flame-throwing, unapologetic conservative. She has experience what it is like to be a single mother on welfare. Her opinion column in today's Deseret News, entitled: Leaders should at least be honest with taxpayers on economy, gives insight and provides a voice of warning in the midst of the recent housing crisis. She bemoans the culture of conspicuous consumption and government intervention with mortgages. She founded CURE, a black conservative think tank that espouses personal responsibility, one of the values at the heart of the mortgage crisis affecting millions of families.
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How did we end up here?

President elected Obama announced his $75 billion plan (on top of the 400 or so billion in losses absorbed by Fannie Mae and Freddie Mac) to help about 7 to 9 million homeowners. If you split 75 billion equally among those 9 million homeowners, each one would get just over $8,000. How is this going to work? Many of these homes that are in danger of foreclosure cost hundreds of thousands of dollars. In light of that, what will $8,000 do? Apparently, there is more money at the president's disposal-I heard at least a couple hundred billion or so.

How did we get here in the first place? During the 19th century, people moving to the western frontier built their own homes. Shelter is one of the basic human necessities. How are we, in the 21st century, on the verge of evicting millions of homeowners, essentially depriving them of this right to shelter? How did housing, which used to be a simple one-room structure built of rough-hewn trees, get so complicated?

What is government's responsibility in guaranteeing shelter? That depends on who you ask. 1)Some would say that it is to provide every person a very comfortable standard of housing.
2)Others would say government should provide only a minimum standard of housing.
3)Yet others say each person is responsible for their own housing.

With this latest bailout, it seems our country is moving frighteningly close to number 1. I fall somewhere between 2 and 3. People need housing, and we should be able to provide this in what is still the richest nation on the earth. However, if we provide everyone with a very comfortable standard of housing, there will be no incentive for them to work to attain that standard and contribute to society. This latest bailout is a nasty redistribution of wealth. The whole premise of this country is that people have the liberty to earn the standard of living that they desire. Inherent in this premise is the unavoidable aspect of RISK. We cannot eliminate this element of risk. Risk and reward go together like peanut butter and jelly.

This mortgage crisis is complex. It started with cheap money, which led to speculation. This speculation, coupled with government coercing lenders to make sub-prime loans (hey, everyone deserves a very comfortable standard of housing, right?) to many who could not afford the monthly payment is at the root of this problem. What kind of sense does this make, to get families into homes they cannot afford? It spells bailout. President Obama said today that people need to live within their means. Where is the motivation to do this when government shields people from the consequences of doing just that? Would we be in this crisis if we simply provided less-fortunate people with adequate housing, instead of prematurely moving them into being homeowners? Homeownership assumes risk. The government cannot assume this risk for all homeowners. My sister has been married for 5 years. She and her husband have 2 children, but they are still renting an apartment. I am 36 years old, married for 5 years, and I have never owned a home. I would love to own a home, but I am not ready to assume the risks associated with homeownership, and I don't expect anyone to assume them for me.

Yes, there are some people who are in need of help, that have truly fallen victim to this mess. Yet, government is not going to come to the rescue of the people that really played by the rules, that did not buy more home than they could afford.

Legislation being considered

New housing legislation is being considered during the current session of the Utah Legislature. Teachers, vastly underpaid (click & scroll down) and under-appreciated, may get help in making a down payment on the purchase of a home. The proposed 1.5 million dollar program would provide loans of up to $15,000 for the purchase of a home. If the teacher teaches 5 consecutive years in the state, $5,000 of the loan is forgiven. This is part of an effort to keep quality teachers in the state.

Property tax relief income limits may be raised, aiding already burdened homeowners. Is the property tax burden high due to the large family sizes? Larger household size means that there are fewer households to share the tax burden, so each household has to pay more. Lower property tax bills mean more funds can be used for other household expenses.

Here's the bill mentioned earlier that would assist mobile home owners with relocation expenses. It would pay for all or part of the expenses using tax revenues. I wonder how many mobile home owners there are in the state. Part of the argument against this bill is the potential of it to spreading. If mobile home owners receive financial assistance for forced relocation, can displaced apartment renters make a similar request for help?

Mobile Housing

"Mobile Homes" by Faye Passow
http://mnartists.org/work.do?rid=146162

Mobile homes are not safe, and not just in cases of extreme weather. A mobile home park is in danger of being displaced by an apartment complex in South Salt, with residents weary of what they would do if this happens. This article notes that people who live in mobile homes are economically disadvantaged, and have limited options if the land on which they are parked is sold. Traditional homes that are displaced due to construction projects, whether for roads or buildings, have more recourse-their homes are not meant to move. Therefore, as happened to my wife's grandmother, the displaced homeowner is compensated at fair market value for the loss of their home. Mobile home owners, on the other hand, who usually rent or lease the land on which they are parked, are expected to find a new place to "park" their domicile, without recompense.

A similar incident of displacement, cited in the above article, happened a couple of years ago, with the private sector pitching in to help residents find new homes, as there was no where in the current location to park their mobile ones.
Recent legislation, cited in the article about the mobile home park in South Salt Lake, mandates a minimum 9 month warning for mobile home owners about to be displaced. The article used the term "bittersweet" when referring to this legislation. The bitter part is that municipalities will not be allowed to protect mobile home parks with zoning regulations. Some legislators, though they appear to be in the minority, are proposing to give financial aid to displaced mobile home owners, to help them with the costs of relocating or acquiring a traditional home. Others are not as sympathetic. One Utah legislator appeared to trivialize the mobile home owners' plight, comparing their desire for relocation aid, with his desire to "go to Disneyland."

It appears that mobile home parks, which house people of lower income brackets, are not popular with legislators. Mobile homeowners in Oklahoma were given 35 minutes warning before a tornado struck. Their counterparts in South Salt Lake will likely be given 9 months warning before displacement. Is either enough time to prepare?

$900 Billion and counting

Considering the muslim influence of his heritage, does the President eat pork? No, he just sponsors it. President (elected!) Obama and congress' stimulus (simulated) plan is in the senate, where details are being finalized. The current version includes a 10% (of the home value) home-buyer tax credit, up to $15,000. Wow, I could pay off the taxes I owe with that credit! Too bad I don't have a job. Hmm, I guess that won't work; I'll just have to stay in student housing, which is still affordable. When my wife, Emily, and I lived in Minneapolis, our rent for a 1-bedroom apartment was more than what we pay currently for a 2-bedroom apartment. However, the average wage in Minneapolis, which is much higher, more than made up for the difference. I fear the implementation of new temporary government programs (not the tax cut) meant to fix things like the housing market may have a long-term negative effect on the earning power (and housing-obtaining power) of the common citizen. My father, a financial coach, said, "Once a government program is in place, it is impossible to get rid of." How much of an impact will this new tax break have on the housing market? I think that depends on what happens with the rest of the "porculus plan" (term used by Rush Limbaugh).

Private Sector/Public Sector

The founder of Habitat for Humanity has just passed away. The efforts of his organization have helped thousands of people, and decreased the financial burden (however small) on the government in helping people get affordable housing. From the other end of the spectrum, lawmakers are working on legislation to help the housing market and homeowners. The Democrats are looking for a quick fix, and the Republicans are looking for an indirect quick fix. The ugly truth is that many homeowners will still lose their homes. The article points out that in order to qualify for the Republican plan, homeowners need to be "creditworthy." If homeowners are delinquent with mortgage payments, doesn't that pretty much destroy their credit?

The job market and the housing market are tied together. Those that are losing their jobs are more likely to lose their homes. Without an improvement in the job market, how will the housing market benefit? A quick fix may just delay the inevitable.

More government control in the housing market makes me cringe. Government meddling with Fannie Mae and Freddie Mac, in the way of encouraging bad loans, largely contributed to this mess. Anyone that can just go print more money should not be entrusted to keep roofs over people's heads; let's leave that to the private sector. I wonder if Habitat for Humanity's participatory program helps future homeowners feel more "invested" in their homes. We value what we have to work for. Things that are given to us for nothing we place little value on (Earl Nightengale, The Strangest Secret). I don't have an answer to this dilemma, but I don't think the hard choices should be postponed for the seeking of political polish.