Ideas: Fixing the World July/August 2009

Rent Your Own Home

More

The housing mess is screaming out for a simple but effective solution. Ideally, such a solution would keep underwater homeowners in their homes even after they found themselves unwilling or unable to pay their mortgages; it would stop renters from being evicted from foreclosed homes when they’re up-to-date on their rent; it would slash the number of foreclosure sales, which are driving house prices down nationwide; it would improve the quality of the national housing stock; it would give banks an easy-to-value income stream, instead of an impossible-to-value home, whenever they foreclosed on a property; and it would cost the government nothing. Amazingly, all of this can be done with just one policy: a decree that whenever a bank forecloses on a home, the current occupant has the right to remain in the property indefinitely, simply by paying the fair-market rent. Banks are killing each other by racing to sell their foreclosed houses as quickly as possible, before they fall further in value; this policy would force a cease-fire that would help all of them. It would also put an end to the equally destructive syndrome of soon-to-be-foreclosed-upon homeowners trashing their houses before they’re kicked out. This plan might not single-handedly end the recession. But it would certainly help.

Felix Salmon is the finance blogger for Reuters.
Jump to comments
Presented by

Felix Salmon is the finance blogger for Reuters.

Get Today's Top Stories in Your Inbox (preview)

Hunting With Poison Darts

An indigenous forest dweller in Borneo explains one of his tribe's oldest customs: the art of the blowpipe.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Juice Cleanses: The Worst Diet

A doctor tries the ever-popular Master Cleanse. Sort of.

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Video

What If Emoji Lived Among Us?

A whimsical ad imagines what life would be like if emoji were real.

Video

Living Alone on a Sailboat

"If you think I'm a dirtbag, then you don't understand the lifestyle."

Writers

Up
Down

More in Business

More back issues, Sept 1995 to present.

Just In