More Tenants? More Rights!

2739044670_102bbef9d9-1Toronto Given the housing and foreclosure crisis in the United States, it was not surprising to see that homeownership rates have fallen rapidly in recent years.  The Wall Street Journal published an estimate saying:

The nation’s home-ownership rate is also falling, to 67% of U.S. households in 2010, after topping 69% in 2004, according to the Census Bureau, with further declines expected. Each 1% decline represents one million households moving to rentals, housing experts say.

Conservatively that means 2 million fewer homeowners in the USA.  Where are they going?  Into rentals.  The same WSJ article estimates the following:

Renter households now top a record 37 million after increasing more than 3.5 million in the past five years, partly due to the foreclosure crisis. Green Street Advisors expects an additional 4.4 million rental households to be added by 2015.

Part of this increase is fueled by the transfer of owners to renters and part of it is undoubtedly fueled by the tightening credit markets that will produce longer term rents, particularly among the young in expanding markets.

It is hard not to think about tenants in Toronto.  At best only 50% of the city is composed of homeowners and estimates are only a little better than 60% in the greater Toronto area.  In the neighborhoods where ACORN Canada organizers virtually everyone is a tenant in one high rise complex after another.  The longest running organizing campaign not surprisingly has been the effort to win what we call, “landlord licensing,” which would be a process of licensing (and de-licensing) based on inspections (which would lead to repairs and improvements) and finally assure our tenants safe, decent, and even affordable housing.  In this long running battle the real estate interests cry like stuck pigs at our every proposal, but there has been sure and steady progress.  Last year winning a better auditing and inspections process, even though far short of licensing, according to the City of Toronto housing department led to $100 million in landlord upgrades and improvements.  Now ACORN Canada is trying to secure another small, but significant victory in this guerrilla campaign where a box would be required in the lobby of all major apartment complexes where the audit reports and improvements would be available to any tenant seeking to rent creating a transparency that would hopefully steer tenants towards better properties and shame landlords into making needed repairs.

There’s no way to imagine cities with burgeoning numbers of tenants who will no longer be seeing apartments as way stations to homeownership but increasingly as permanent addresses and not realize that the long imbalance where landlords have held the upper hand and tenants in most cities and states have been virtually stripped of any rights, as a time bomb ticking.  New construction of apartment blocks is being accompanied by rental inflation, so there are bound to once again be calls for controls if (when?) greed laps past demand, but perhaps even more urgently there will need to be tenant rights campaigns, like the ones in Toronto, to secure basic housing decency for the millions and millions who now understand that apartments are central to the urban future.

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Come On! Private Banks Poaching Fannie Mae

subprime mortgage securitization
subprime mortgage securitization

New Orleans On ESPN’s Sportscenter during the seasons they have a feature called “Come on!” in which they feature unbelievable or bonehead plays.  We need that in other fields of public life and politics.  Reading about the efforts of banks like Wells Fargo and JP Morgan Chase along with the various trade associations to try to get their noses under the Fannie Mae and Freddie Mac restructuring tent to shill a profit by issuing government secured mortgages, I could only thing:  Oh, come on!  How ridiculous!!  These are the same banks that just brought us the Great Recession due to their irresponsible lending and securitization schemes, and now they should somehow be allowed to profitably issue government mortgages.  Though by now we all ought to be used to the way that Wall Street thumbs their nose at all of the economic realities that all of us face, this is wildly unbelievable.

Reading the New York Times article by Louise Story, it was clear this was another predator’s ball with not only Wells and Chase at the trough, but also Goldman Sachs, Credit Suisse, and Morgan Stanley.  All of this reminds me of the scam that the Obama Administration stopped in recent years of allowing private interests to wildly profit as the middle men brokers for federally offered student loans.  Banks were making out like, well how else can I say this, bandits.  Stopping this sticky fingered scandal saved huge amounts of money, but now they are baaaaccccckkkkk with something perhaps even more outrageous.

The other backassedwards part of this is the problem of misdirected blame that still falls in the direction of Fannie/Freddie for supposedly bringing down the house by loaning to lower income citizens without looking at affordability or sustainability.  I understand the ideological need to blame the poor, but it’s important to point out that there is still no factual evidence that these loans, that should have been encouraged by the government, had anything to do with the mess.    Not only would we be throwing out the baby rather than the bathwater, but it seems we would be institutionalizing the bathwater and leaving the baby homeless, so to speak.

There’s probably a debate worth having about how many and how much of the “middle class” need to have federally guaranteed mortgages through these vehicles, but it seems obvious the we will need even firmer support for working class families in the future to have a chance at home ownership in we ever get out of this recession.  We need to slap away the hands trying to pretend this is all a cookie jar, and tell them to not only mind their own business, but maybe even try to get better at it than they have been (let’s see banks portfolio more mortgages on their own before they claim to know how to issue others), and keep federal institutions trying to solve the puzzle of adequate and affordable housing for all Americans again.

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