Don't worry about prices, make neighborhoods liveable

I saw an article recently discussing the topic of the percentage of the U.S. population that own their own homes and the run-up of that figure that the author thinks contributed to the current real estate bust. The author makes the case that historically the U.S. has run at about 75-76% of the population owning their own homes, but during the early 2000's there was a Federally backed push to increase that figure that eventually lead to about 79% of Americans owning a home.

The article when on to make the case that the extra 3% were actually people who couldn't really afford to e homeowners and that they make up the majority of the foreclosure wave that has hit the housing market. The article postulates that the easy money policies of the Clinton and Bush years that was put in place to increase home ownership in fact contributed directly to the bust. The author makes the case that a certain percentage of the population will always find home ownership to be out of reach.

I suppose that this is basically true, because it is based on basic facts – about 25%of the population don’t earn enough at their jobs to afford to won a home, at least not the home that they would like. With many homes in the Detroit area selling for under $10,000, you would think that almost anyone could afford to buy those homes. However, most of those homes are in sad shape or in areas that many people just don’t’ want to live. I think that is a key issue that needs to be attacked by local governments. If a city/town/area has viable housing stock, but is so crime ridden that no one wants to live there, that is a problem that can be solved with better police efforts and other programs. If they don’t solve those problems, cities will find themselves becoming urban wastelands.

There are currently huge stocks of affordable urban and close-in suburban housing in many areas of the country that are going to waste because potential buyers see them as undesirable places to live, either because of crime issues or maybe because the school systems are sub-standard. If city, county and state governmental bodies would tackle those issues, maybe we wouldn’t have a housing problem in those areas. The prices are right and FHA programs are in place to loan buyers the money to fix these homes up. Now we need now is local governmental action to make the locations right, too.

Are you experiencing the same issue in other parts of the country? How are your local governmental bodies handling these issues?