Today I saw a Wall Street Journal article claiming that the Obama administration was exploring ideas to assist government entities overwhelmed with foreclosure properties by allowing rental of those properties.
Let us consider the long term tendency of government regulation and expansion. Government surmises a situation involving a large industry with some existing conflicts and usually gets its tentacles in via regulation while encouraging the same business/behavior that created the situation in the first place. Over time, government intervention creates far worse problems but having ensnared citizens and business in a dependency trap, they then convince the public that only government can solve the problem and hence…a takeover.
Government created the housing debacle with low rates, money printing, My Community Mortgage and the entities (Fannie & Freddie) that guarantee and service loans. So now that the government has bailed out the lenders, ensnared millions into loans they cant pay, on properties nowhere worth what is owed, the next step is complete takeover.
In 2009, the writing was on the wall with the Deed for Lease program. Well, now that the market is still terrible, with worsening economic conditions, the Obama administration has announced that they are looking for ways to pull foreclosed homes off the market and rent them.
So I’m sure there will be ‘reasonable’ ideas regrading the best way to implement such a policy while protecting private citizens’ ownership rights. But in the end, I cant help but be suspicious…and believe that inevitably government will take ownership of millions of homes and the small scale rental policy will become a full-fledged government enterprise of rental properties. Soon after that will come a whole host of further “regulations” against the rental industry. At that point, in addition to their firm grip on education, retirement, health care and mortgage finance, government will then have a full, expansive grip on where we lay our heads at night.