Economic Prescription: Get Rid of the Foreclosures
Posted by Steve Kleber on Jun 03, 2011
Welcome to the Kleber & Associates blog! Here’s the latest on Economic Prescription: Get Rid of the Foreclosures
This morning on CNBC’s Squawk Box, former Federal Reserve Chairman Alan Greenspan said one of the main keys to getting the housing market back on track will be to reduce the number of foreclosed homes in the channel.
With approximately 4 million foreclosed or acutely delinquent homes in the US, we can only imagine what the situation would be if they all flooded the market simultaneously. It’s my opinion, however that the banks can only process some 900,000 properties a year. So what are we to do with this distressed inventory? Should we continue to sit on the sidelines and hope that things will improve? No! We need to continue to think creatively as a community about proactive ways we can bring ourselves out of this situation. I’ve come up with a few ways to get these homes off the market while benefiting communities. For example:
- FEMA could purchase the homes near disaster areas such as Tuscaloosa, Alabama and Joplin, Missouri to provide temporary housing for victims instead of bringing in FEMA trailers. Homeless residents could then have the option of buying these homes from the government once they are in a position to do so.
- Neighborhoods or city governments could buy homes and clear the land for community gardens or parks.
- Corporations could buy homes near their buildings to provide employee housing as part of a benefits or relocation package.
- Non-profit organizations or city governments could buy the homes for homeless shelters.
Let me know what you think of these suggestions and what other ideas you may have for putting distressed properties to good use!