Webner House In Winter

IMG_5905I believe in giving credit where credit’s due. I therefore want to thank the builders of our house, for building a sturdy, snug structure that has held up to this winter’s harshness.

Bad winters, like this one, can expose the problems with a house that isn’t well built. You can develop cracks in your basement from freezing and thawing, or feel the cold seeping through windows that aren’t properly framed. Or the weight of snow on the roof can buckle support beams that aren’t up to code. Most perilous of all, water pipes that aren’t correctly placed and insulated can freeze, and you come home to find water cascading down the stairwell or dripping through the kitchen ceiling.

We haven’t had any of those problems — knock wood — even though this has been one of the worst winters in years. Our houses are like our health — we tend to take them for granted until something bad happens, and only then do we appreciate what good health or a house that doesn’t require expensive and disruptive repairs truly means.

Your Landlord, Uncle Sam

Here’s a discouraging follow-up to a post about Fannie Mae’s enormous roster of foreclosed homes that require millions of dollars in upkeep: our government now owns so many homes it is thinking of getting into the rental business.

According to AP, the government owns 248,000 homes, about 70,000 of which are for sale.  What’s more, officials are expecting even more homes to fall into that category as foreclosures pick up after a brief lull.  So, what to do with so many government-owned houses?  One option is to turn them into rental units.  The acting head of the agency that oversees Fannie Mae and Freddie Mac says changing the homes into rentals may reduce “credit losses and help stabilize neighborhoods and home values,”  because sales of foreclosed homes are, on average, at a 20 percent discount, thereby depressing the prices of surrounding homes.

I think turning foreclosed homes into rental properties would be a ludicrous mistake.  It’s bad enough that the federal government lost its shirt in the mortgage guarantee business and owns hundreds of thousands of unwanted properties — now we are going to hire countless people to try to rent and manage the properties and collect rent checks and security deposits?  And while the below-market sale of a foreclosed home isn’t great for a neighborhood, often living next to a rental home is worse because the renters could care less about upkeep on the property.  Speaking as someone who once lived next to a rental home, I think it is far better to sell the property to someone who will live there and take care of it, even if the sale is at a discount.

Renting just defers the problem.  I’d rather the federal government do whatever it takes to sell its inventory of homes, get out of the home ownership and upkeep business once and for all, and get back to focusing on doing what federal governments are supposed to do — like, say, providing for our national defense.

Fannie Mae, Baby Won’t You Please Sell A Home?

NPR ran a very interesting story about Fannie Mae, the government-sponsored enterprise that was supposed to support stable, affordable housing markets in the United States.  Fannie Mae itself became unstable during the economic crash in 2008.  Since Fannie Mae went into conservatorship in September 2008, taxpayers have supported it to the tune of a mind-boggling $86 billion.

What’s interesting about the NPR story is not the crushing cost of Fannie Mae — that sad story has been known for years — but the continuing costs imposed by the fact that Fannie Mae is the largest owner of foreclosed properties in America.  Fannie Mae owns a stunning 153,000 foreclosed homes, which means that it must pay to mow the yards, trim the shrubs, paint the exteriors, and engage in the other upkeep costs that normally would be borne by homeowners.  NPR estimates that Fannie Mae pays more than $36 million a year just in lawnmowing fees.  Fannie Mae also is generally considered to be the largest purchaser of paint and general appliances in America.  Of course, people in the neighborhoods where the foreclosed properties are located are counting on Fannie Mae to spend what is necessary to keep the places from becoming rundown hellholes that destroy neighborhood property values.  And, our government being what it is, one wonders how Fannie Mae decides whom to hire for all of the lawnmowing and home upkeep jobs for those many distressed properties.

Fannie Mae’s efforts clearly contributed to the housing bubble, and now those efforts leave us in the absurd position where the federal government is saddled with unwanted properties that will impose costs for years.  Our approach to government clearly has taken a wrong turn when a program, however well-intentioned, leaves our federal government owning more than 150,000 private residences and being the largest customer for home fix-up products and services in the country.