Investors are desperate for safe havens to invest their cash. The Democrats and President Obama have come up with what might be an opportunity that could strengthen the wobbly economy, while providing jobs, and place occupants into currently vacant properties.
Foreclosed properties and vacant houses are a blight on any neighborhood. At the present time, Fannie Mae, Freddie Mac and the Federal Housing Administration have possession of 248,000 single family homes. The efforts have been to sell the properties, but on Wednesday, August 10, the Obama administration revealed plans to turn the huge inventory of foreclosed homes into rental properties.
One might envision a standardized system wherein the U.S. government maintains control over foreclosed or abandoned properties, while management is placed in the hands of subordinate agencies. Investors would be assured that potentially large profits wouldn’t fall into the accounts of CEO’s as unreasonable salaries or bonuses. The management companies hire plumbers, electricians, roofers; all at standardized rates and overseen by government agencies. While the houses would span a wide range of property values and mandated rents, fundamentally, the rental agreements would be standardized, and overseen by such as the Federal Housing Administration.
The states, cities, and counties might have participation in these agreements which, with effective management, present a great opportunity for workers, renters and investors. The Obama administration is soliciting ideas and plans that may be utilized for the venture. Some plans may place greater emphasis on selling the properties. Timothy Geithner, Treasury secretary, states that exploring options for renting and selling will, “expand access to affordable rental housing, promote private investment in local housing markets and support neighborhood and home price stability.”
Secretary of Housing and Urban Development Shaun Donovan notes the fall of home values in neighborhoods in which houses stand empty, and acknowledges that, “We have to find and promote new ways to alleviate the strain on the affordable rental market.”
Sen. Jack Reed (D-R.I.) seeks to convert vacant homes into affordable, energy-efficient rental housing. He talks of creating jobs for out of work people, “Government agencies,” he says, have “recognized the urgent need to be proactive and creative in pulling the housing market out of the foreclosure tailspin.”
Officials from the administration and the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, said they would accept ideas in a request for information process through Sept. 15. Details are available on both the HUD and FHFA websites.