Mitt Romney – Wall Street Journal Plan to Foreclose Homes, Throw Out Homeowners and Turn Units into Rentals Runs into Reality

Even in the Nation’s Tightest Rental Market Landlords Will Not Put Rentals on the Market

People like Mitt Romney who have been successful in one facet of life naturally assume that they know everything there is to know about every other facet of life.  (For example, Mr. Romney has made a lot of money buying companies, loading them up with debt and sometimes driving them into bankruptcy).  This is what drives Mitt to the Presidency, the strong conviction in his own mind that somehow he is qualified because he made of lot of money (using other people's money).

Evidence of Mr. Romney’s naïveté is evident in his housing recommendations.  Mr. Romney thinks that the economy and homeowners would be better off if maximum rather than minimum number of foreclosures took place.  The idea is that these housing units would then come back onto the market as rentals.  Mitt’s ideas have been endorsed by the editorial pages of the Wall Street Journal, although their motivation may be more a desire to see middle and lower income homeowners on the street.




The problem with this idea, which sounds good in theory, is that not only are there not enough potential landlords out there to buy, renovate and rent the housing that would come on the market, some potential rental units in the nation’s tightest rental market are not even being put on the market.

Although the vacancy rate in Manhattan hovers at 1 percent, at least some of the landlords of these sealed-up buildings — hundreds of them exist in pockets across the city — are deliberately keeping their buildings mostly vacant, content to earn income from first-floor commercial tenants rather than deal with the trouble and expense of residential tenants.

What, a vacancy rate of 1% and landlords are keeping rentable units off the market.  How can that be?



Nicole Bengiveno/The New York Times

Several buildings in East Harlem have

bustling storefronts, yet the residential units

above are empty, some for decades.



In some cases, city housing officials say, landlords are waiting for a revived economy to raise rents so that it makes financial sense to repair plumbing and electrical wiring. In other cases, landlords are “warehousing” apartments for the moment that a deep-pocketed developer comes along, as has happened in the blocks just north of

96th Street  East Harlem’s southern boundary. In still other cases, it is simply mystifying that apartments would be left vacant for decades, particularly since East Harlem has been a magnet for Mexican and other Latino immigrants, as well as young strivers looking for cheap space.

See in Mitt’s world, and the world of the others who say foreclosure and re-renting is the way to solve the housing crisis he simply does not understand the difficulty of maintaining and operating rental housing.  Of course, if you have lead a wealthy, pampered life of privilege from birth you probably won't know anything about rental housing.  But that ignorance will not stop you from making policy decisions that result in homelessness of millions of people, none of whom you know or care about.