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What housing crisis?

A pending home sale in Palo Alto, CA
A pending home sale in Palo Alto, CA
AP Photo/Paul Sakuma, file

If we stood in 1980 and looked back forty years, what we'd see is a relatively stable homeless population. If we jumped forward to 1985 and looked around, we would all of a sudden see a homeless population that had multiplied well over what it was just the last decade. In the book, A Right to Housing: Foundation for a New Social Agenda, this very same point is made. The writers argue that such a phenomenon can't possibly be attributed to millions of people instantly becoming irresponsible (see page 317 of the book), but other structural causes.

The nation's recent "dilemma" concerning falling home prices has been discussed often by politicians, scholars and consumers alike. What is problematic about the discussion is that very few are calling attention to the underlying structural problems inherent. The housing bubble created over the past two decades or so was not sustainable. In fact, it was quite dangerous. That explosion in homeless population in the U.S was directly correlated with a slashing of the federal housing budget by the Reagan administration, a trend that has continued to this day.

The sudden decrease in affordable housing in the 80's left many people in the market without any choices. As a matter of fact, in today's world, there is no single city in the U.S where a person can earn minimum wage and actually afford market rent, as determined by H.U.D. At the same time the housing budget has continually been under assault, the federal government has been adamant about expanding it's biggest welfare program: the homeowner's tax credit. The price tag of this grand welfare program alone is greater than all other federal housing programs combined. Ironically, it is often these very same people, those living off the country's largest housing welfare program, that have the audacity to complain that the poor are a drain on the system.

So now housing prices continue to lag with minimal, at best artificial, signs of recovery. But perhaps it's worth asking ourselves whether or not prices should return to their former "bubble" state. In the absence of affordable housing for those who need it most, could it be a positive thing for prices to fall a bit more over the next few years? After all, the values we've come to expect over the last decade or so were very much artificially inflated. Those prices only helped the banks and speculators who quickly bought and sold. Further, it is an intrinsic belief that our homes are to be used as a tool to build wealth that got us here. Maybe, just maybe, we should return to a belief that our homes are just that- homes, not investment products.

Tune in tomorrow for an exclusive interview with Georgia's Independent candidate for governor, Al Bartell


  • Alisa 5 years ago

    Very interesting article D'Juan. Many good points to consider. I am one of the "lucky" few who have inherited a mortgage that is greater than what my house is worth, thanks to the "bubble and burst." I certainly could use some of that affordability now, as I'm sure many others could.

  • stan 5 years ago

    It never ceases to amaze me how socialists pervert the free market with taxes, regulations, inflation and favor-trading; then blame the free market when the things they did cause economic chaos. Your supposed solution to the problems caused by the eradication of property rights is to confiscate yet more property. Just like Washington Democrats borrowing to get out of debt and spending more to balance the books. INSANITY, thy name is liberalism.