Homeless and Empty Homes – An American Travesty

A colleague emailed this article from the Huffington Post last evening, by Richard Bronson, CEO of  Bronson Industries, 8/24/10. It got me thinking about homelessness, our neighborhoods and so on.

Upon reading this article, a neighbors’ plight immediately skipped across my brain. He and his family’s foreclosure woes are not any different than others.  This is a home in my own neighborhood which is just  two doors up. It is still up for sale. Weeds & trees are beginning to take over the front yard and the house is “dead”. No life. Sad.

 I reflected back to a conversation I had with my neighbor during his yard sale (clearing his home as they were moving to an apartment). He had opted into an adjustable rate mortgage and in the beginning, his mortgage was a manageable $1700 per month. Even with his business as a painter,  which did slow down with the economy, that mortgage was still manageable. Fast forward to six-eight months ago, and the mortgage adjusts to a $3,000 per month payment. It came down to a choice of paying a mortgage and/or putting food on the table for 3 young children. Clearly, he chose his family.

So I think perhaps, if the mortgage company had allowed him to stay, pay monthly rent, maintain the property..then our neighborhood would have been all the better.

No overgrown weeds, a well maintained home, happy children playing in each others yards and a family remains a stable, active contributor to the community. Personally, I like this option.

I totally GET that this scenario has played itself out, like a broken record across this city, region and country. Yet we continue crashing down the same disastrous path and it  is EXPENSIVE and ISN’T WORKING!

In case you didn’t want to click-through above to the article, here it is in its entirety…

About 3.5 million US residents (about 1% of the population), including 1.35 million children, have been homeless for a significant period of time. Over 37,000 homeless individuals (including 16,000 children) stay in shelters in New York every night. This information was gathered by the Urban Institute, but actual numbers might be higher.

Fox Business estimates, there are 18.9 million vacant homes across the country.

3.5 million people without homes; 18.9 million homes without residents.

While an array of legal and logistical obstacles present themselves, the math is staggering. It’s time to sort out the regulations and rates that would facilitate the solution: turning empty houses into homes for those in need.

While subprime loans have justly captured much of the ink as the culprit, overdevelopment is a major factor in the dramatic number of vacancies there are today. These are not just the homes of people who took on a mortgage they couldn’t afford; these are newly constructed houses without a buyer on the horizon. It’s not about taking a residence from someone who can’t pay his or her bills and giving it to another person who can’t make payments either, it’s about using resources we have in excess.

I’ve been in real estate development for quite some time, enough to know that regardless of which political party is in charge, the market will follow the same cycle: demand, saturation and then glut. A suburb will start to attract homeowners, developers will react by building new homes in that area, and inevitably the supply will far outpace the demand. I’ve seen it happen time and time again. Usually the cycle ends through absorption, after a lull the homes are eventually sold and the train starts rolling again. However, with the current economic climate, we appear poised to remain in the glut portion of the cycle for an inordinate amount of time.

Houses are unlike most products; they generally don’t depreciate with time and use. A house will not suffer from wear and tear the way a car will. Actually, the opposite is true. An empty residence will quickly go to seed. If you lived in a neighborhood with an abandoned house you’ll know what I mean. Without someone to take care of it, a property will decline steeply. But with someone living in the house…actually taking care of them…well, that’s a far better situation. No one benefits from an empty house.

I’m not advocating giving houses away — such a move would create a host of political and fiscal problems — but government should be working toward a solution to match up the empty homes with those who need a roof to live under.

A homeless population equivalent to the size of Los Angeles is unacceptable, and with over five times as many empty houses, we have not only a moral obligation but also an economic imperative to come up with a creative way to fix this travesty.

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