Test Question 47: Who Owns the Most Residential Houses in the United States?

 That's Easy:  You Do

For sale or rent by distressed owner: 248,000 homes



All this and more is  yours America



And Who is this Distressed Owner?  It is the United States Federal Government of course.  As a result of the housing collapse in the United States, various federal agencies have foreclosed on and now own about a quarter of a million residential housing units scattered across the country.

And What to Do with All This Housing?  Well the obvious answer to “sell it”.  Which then leads to the next question, to whom?  See if all of this housing were placed on the market and sold, it would depress housing prices even more than they are today.  This in turn would increase the number of foreclosures as owners of current housing could not sell their house for the value of the mortgage and the government would end up owning even more housing.

So selling the housing could leave to an even higher inventory of government owned housing, along with all the attendant economic problems of a housing market even more depressed than it is today.  And that is truly depressing.

What about just having the government hold the houses and wait until the housing market gets better. That’s not a bad idea, except there is a huge cost to owning a house, as homeowners all know, and there is a very huge cost to owning 248,000 of them.



Figuratively Speaking - What Unleashing Government
Owned Housing Would do to the Market



“Shielding the market from a flood of government homes might be good for property values and the economy. It’s not such a great deal for taxpayers, who bear the costs when government-guaranteed loans go bad and who pay for maintenance on vacant homes the feds take over”

Well, what about renting them?  Gosh that sounds like a good solution.

It’s not at all clear whether that would work on a large scale. The government would have to spend money to bring the rental properties—many of them old and dilapidated—to code; pay still more to insure the rentals; and build a bureaucracy to manage and maintain them. Even if they do all that, there might not be people willing to move in. In parts of Cleveland and Detroit, for example, some houses are stripped and vandalized the minute they’re vacant. “Some of the neighborhoods, you can’t move into,’’ says Wiseman. “There are so many empty houses, it’s just not safe.”

In fact, some folks don’t stay in a foreclosed house even though they can

“Freddie Mac allows occupants of foreclosed homes to remain on a month-to-month lease until the house is sold. Few do, says spokesman Brad German. “People prefer to take cash for keys and move on.”

So what is a desperate government do now?

Fannie, Freddie, and FHA issued a joint plea to the public for ideas about how to solve the problem. (Give it your best shot: You have until Sept. 15 to submit ideas to reo.rfi@fhfa.gov.)

Democracy in Action!