This diary is going to be controversial and piss a lot of people off, but I had to write it. Mostly because I don't hear anybody, anywhere, talking about this.
My wife and I don't own a home. We've been renters all our lives. In Los Angeles, where we live, housing prices have rocketed up every year we can remember. Until last year. We've been saving and saving for years, hoping to be able to afford to buy a home someday. We rented a small place, socking away money. We diversified, putting some of our savings in CDs and such, and some in stocks, putting together a nest egg that would some day allow us to buy a house we can afford.
Over the past year, as housing prices have plateaued and even dropped a little, it gave us hope that we would be able to buy a house some day. The rising tide of foreclosures, increasing the supply of empty houses, has made that price drop happen.
Now we read that a 75 billion dollar housing subsidy plan is necessary to stem the tide of foreclosure. I do feel for people who cannot afford to keep up their mortgage payments because of lost jobs, health care expenses, and the like. I feel for them, and if you're in that situation now and reading this, know that I do have empathy. But here's the thing. There are a lot of renters who are in a similar situation: lost jobs, health care expenses, etc., who have also been taken underwater on whatever investments they had.
That nest egg that my wife and I have been saving? In the past year and a half, as housing prices in LA have dropped about 20%, the inflated housing market bubble created a financial crisis, one that caused our non-housing investments to drop 50%.
Nobody is offering to help us recover value on our investments that are way underwater. The mainstream media tends to view investments in stocks as "speculation" and investment in a house to be some sort of right, a part of the American Dream that cannot be allowed to lose value. Well, it was speculation in housing that has tanked the rest of the economy. Now we are all paying for a plan that will slow losses from people's investments in real estate.
Who suffers? Those of us who don't own real estate. We are paying to keep home values inflated, and forever out of our reach.
The lobbying groups for the landed class are incrediblely strong, joined in this case by such other powerful groups as the National Association of Realtors. But the 33% of us who aren't landowners have no organized lobby group, no way to get our concerns heard. Those who run the media, news anchors and executives alike... I guarantee you all of them own houses.
I am not some libertarian-right-wing market-above-all guy normally. I campaigned hard for Obama and think he's doing a great job, actually. But this constant talk, from every corner, about how we as a nation need to help distressed homeowners stay in their homes at any cost continues to rile me up.
Why is it being done? To help people who were taken advantage of by predatory lenders? No way. It's to help the large percentage of people who own their own homes and are just nearby a foreclosure. As the Washington Post laments today, "each foreclosed home reduces nearby property values by as much as 9 percent."
We renters are 33% of the total US population. We don't own real estate but want to be able to afford it someday. The only investments available to us were ones that you could buy for less money: stocks, bonds. Now, after those investments have tanked, we are paying to keep home values high. Why? Because our voices are not being heard. We have no lobby group, we have no presence in Washington, we are not seen as important or contributing members of society. I actually heard a radio program recently on NPR where someone was saying something like "homeowners are more active members of their community, homeowners are more stable, better neighbors, etc."
Enough is enough. I've never been a community organizer, but Renters Must Unite! We are citizens too, and it makes no sense to me that we must pay for other people's investments gone bad... nobody is offering to pay for ours.
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UPDATE: Thank you all for the great discussion, both those who agree and disagree with what I'm talking about. I would just say that, for those who disagree with me on the grounds that this plan is necessary because of the juicing it will provide to the overall economy... there are many ways the government could spend $75 billion extra dollars to help the economy. It's all a question of priority. Helping ease the dotcom recession by handing out money to suffering dotcom investors would have juiced the economy, but it wouldn't have felt appropriate. Similarly, keeping home prices propped up just seems to me to be a wasteful way to "help" the economy in the short term, and it's a method that disproportionately helps a certain group. And yes, the group that benefits here is a group that I am not a part of, so I understand the commenters who make fun, saying that I'm just bellyaching that I'm not getting my share of cash.
But just think about this: $75 billion would go a long way to paying for a new Single Payer Health Care system, one that would take a burden off of all tax payers and help juice the economy, creating millions of jobs, helping struggling businesses, and keep people in their homes by removing a financial burden that many face. It would allow the natural forces of supply and demand to keep functioning in the housing market, and would benefit all Americans, regardless of their status as landowners.