Utah's state welfare program for the housing industry is going gangbusters with $3.2 million in $6,000 grants toward buying a new house having been doled out.Because there's no limit on the price of homes that qualify for the program — hey, developers built too many MacMansions, too — some of the 300 taxpayer-funded bounties helped builders unload properties worth more than $500,000.
Not surprisingly, the so-called Home Run program is a big hit with developers. Curt Dowdle, executive officer of the Salt Lake Homebuilders Association, exclaims:
The response has been overwhelming. It's been the single greatest stimulus that the local homebuilders have had.Some "Debbie Downers" might point out that Utah's experiment in socialism does little for people who need shelter and mostly aids developers who are sitting on an excess inventory because they were greedily contributing to the housing bubble that got us into this mess. Steve Graham, director of the Utah Community Reinvestment Coalition:
Is that the best use of public funds? Obviously the Legislature and the governor felt it was. I focus on affordable housing, so certainly we would have loved to see that kind of funding go to low- and moderate-income homes.Sorry, Steve, your folks need to find some low- and moderately-priced lobbyists.
Eerily, the success of Utah's Home Run program was predicted by an op-ed article in the satirical newspaper The Onion. In "The Only Way Out of This Crisis is to Build More Houses," a pundit proposed this genius solution to the recession:
I have the medicine for what ails us all. It's so simple, I can't believe no one thought of it until I did, just now. Ready?
We build more houses.
There. That's it. It's so obvious, maybe that's why I'm the first one to come up with it. Houses got us into this mess, and by God, it's houses that are going to get us out!The pundit points out that finding lenders to cover the mortgages on all these new homes could be tough.
But what if—what if—the banks made a whole lot of loans really quickly, put a bunch of them together in a big package, or bundle, and then sold them to investors for some quick cash? They'd be turning a profit right away, so they wouldn't have to worry so much about whether people could pay back what they borrowed. And they could give loans to anybody—homeless people, kids, immigrants...it wouldn't matter!
You can't lose with this!
2 Comments:
Clearly another Government program touted as helping the needy, but in reality just more pork for special interests (in this case developers).
Hey anon 8:07, it wasn't touted as helping the needy. It was touted as stimulating sales of newly constructed houses clogging the market. On that count, it's working, as even the community housing guy noted in the article. If it were a program to house low income folks, it would obviously not be geared toward anybody who could buy a house. You can quibble with whether that needed stimulating (if your no good brother-in-law works construction and has little work and is thinking about crashing at your place for a few months til he finds something else, you might not quibble), but dissing the program because it's not going to poor folks misses the point.
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