Fix Government Regulation By More Regulation

    Do not think about, write about or deal with  human behavior without determining the effects of incentives.

   More Global Warming is falling as I write this. Imagine how much more snow there would be if Climate Change were not occurring. Scary.

    The following is from an editorial in the New York Times. Naturally, this resolutely liberal organization gets it wrong, concentrating on redistribution and not on the role of government in making a product more costly. It also mentions that the same irredeemably stupid government agencies, Freddie Mac and Fanny Mae, be involved in the latest government nostrum.

A Step Toward Affordable Housing
By THE EDITORIAL BOARD

Representative Melvin Watt, a Democrat of North Carolina, who was confirmed earlier this month as the director of the Federal Housing Finance Agency, will need to use all of his agency’s powers to cope with a worsening affordable housing crisis that is placing poor and elderly Americans at risk of homelessness and forcing many of the nation’s 43 million renters to skimp on food and medical care to meet the rent.

One thing he can do right away is to require Fannie Mae and Freddie Mac, the federally backed mortgage companies that the agency oversees, to pay into the National Housing Trust Fund, which was created by Congress in 2008 but was never financed because the two companies were brought low by the mortgage crisis.

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    A crisis in which they played a central part.

The crisis in affordable housing was underscored in an alarming study released this month by the Joint Center for Housing Studies at Harvard. The study found that, from 2000 to 2012, renters were caught in a relentless squeeze, with falling wages on one side and rising rents on the other. Median gross rents went up by 6 percent, while the median renter’s income declined by 13 percent.

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    The decrease in income has nothing to do with government, of course.

Nearly half of all renters earn less than $30,000 a year. According to the report, about half of them now pay more than a third of their incomes on rent — up 12 percentage points from a decade ago. A quarter of renters pay more than 50 percent of their incomes in rent, which places them at clear risk of homelessness.

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   First, if there were any sense to government, many of the myriad regulations should be eliminated–square footage to occupant, land transfer taxes, number of toilets, bedrooms, and etc. and on an on, should be left to the discretion of the buyers and builders

Mr. Watt needs to encourage Fannie Mae and Freddie Mac to stimulate affordable housing production by purchasing and guaranteeing more multifamily mortgages. He must find ways to make home loans more affordable to moderate-income borrowers. And he should direct Fannie and Freddie, which have recovered from the mortgage crisis, to begin paying into the trust fund.

The fund, modeled on successful state programs, could provide grants and loans to preserve, rehabilitate and build housing, primarily for extremely low-income families that earn 30 percent or less of median income in their areas. The fund could also be used to develop healthy, mixed-income communities; a developer who receives a subsidy would set aside a proportionate number of units for low-income families who would be charged affordable rents. Given the current crisis, programs like this are needed more than ever.

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    Ask the same entity responsible for the problem to solve it. Yep, that’ll do ‘er.

    More regulation, not less. How innovative. Never worked, never will. There will be more overpaid government bureaucrats, more waste, more political corruption, higher taxes. How can that fail?  It can’t because, in spite of the outcome, liberals define success as their INTENTION, not their RESULTS.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

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