Wednesday, July 2, 2008

The foreclosure crisis: local government to the rescue?

Suburb2    Okay, here’s your challenge, local government:  You’ve got an explosion in home foreclosures, which pushes thousands out of their homes, pulls down neighborhood values even further, encourages crime, and shrinks government tax coffers.  And for years, you’ve fretted about the problem of “affordable housing” for modest-income families, because of high prices and high demand.  Is there a potential solution worth trying?    
   In Fairfax County, Va., which is very large (population: 1.1 million), very affluent, and increasingly diverse, the county government is beginning a plan to buy up some houses at foreclosure.  These purchases would take advantage of fire sale prices (sometimes, close to literally), keep the houses occupied and away from vandals (if government handles its purchases well), and helps the county make more housing units more affordable.  Is it a win-win idea?  Perhaps.  How many houses will the county buy?  The program will spend about $10 million, which will enable it buy … 10 houses outright, and help up 200 other buyers through government loans.  These numbers compare to the total of more than 1,700 homes that went into foreclosure in Fairfax during the past 12 months.  These staggering numbers show how difficult it is, or would be, for local government to “bail out” homeowners by itself ...

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