It's been a staple of neoliberal social policy, from the New Deal to the New Frontier to the New Feudalism:
According to a report released today by the Urban Strategies Council, a nonprofit think tank, real estate investors have purchased---usually with cash---42 percent of the 10,508 homes in Oakland that went into foreclosure between January 2007 and October 2011. Many of these investors are turning the homes into rental properties and charging rent that is significantly higher than the monthly mortgage payments many families would make if they purchased the homes [...]In neighborhoods hit hard by the housing crisis, it would be cheaper for many families to buy a foreclosed home than rent an apartment. The average price of a house in those neighborhoods is less than $150,000. Monthly payments on most 30-year mortgages at that price are usually less than $1,000, while rents on many West Oakland properties approach and exceed $2,000.
But banks have been reluctant to sell to buyers who purchase with loans, preferring the ease and speed of a cash transaction.
In its report, the Urban Strategies Council argues that banks and the government-controlled financial institutions Fannie Mae and Freddie Mac could be doing more to help families buy foreclosed homes. Among its recommendations: Expand programs that give owner-occupiers and nonprofits a “first look” at foreclosed homes before they go up for auction.
So our government gives banks the green light the steal homes for $2 grand a pop, the banks flip the homes to generate quick cash, and whole neighborhoods become private-equity fiefdoms overnight. Add them all up, and it = more massive transfers of wealth from poor and working-class individuals to corporate entities, with the government essentially collecting a broker's fee. And as a special added bonus, most of the residents get priced out of their neighborhood (and West Oakland is an extremely poor neighborhood). Where to relocate them? Well, there's always this place.
I guess this just goes to remind us that there really has been a lot transformative change that's occurred to our economy over the past few years. I don't think, however, that it's quite the kind of transformative change our President was talking about when he was campaigning for office four years ago. Maybe someone could have a word with him about it.
---Vitelius
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