Expect More Rental Homes with Federal Policy Shift
Abandoning the home "ownership society" of George W. Bush's presidency, the Obama administration has plans to pump $4.25 billion of economic stimulus money into creating tens of thousands of federally subsidized rental units around the country, including rental homes, according to a recent story in the Boston Globe.
The money would pay for building low-rise rental apartment buildings and town houses, and buy foreclosed homes that can be refurbished and turned into rental homes for low- and moderate-income families at affordable rates.
The ideological shift from Bush's emphasis on encouraging home ownership acknowledges that not everyone can or should own a home. The shift is also a response to skyrocketing foreclosure rates, tight credit and the recession.
The federal Housing and Urban Development Department will still be in the business of helping people buy homes with existing lending subsidies, Carol Galante, HUD's assistant secretary for multifamily housing, told the Globe.
Homeowners who lost their homes to foreclosure are turning into renters themselves, and sometimes renting back their own homes from the bank.
Foreclosure notices nationwide increased 9 percent during the first half of the year, while nationwide vacancy rates for homeowner housing crept up for the second consecutive quarter, the Globe reported.
"People who were owners are going to be renting for a while," said Margery Turner, vice president for research fro The Urban Institute, a Washington think tank that studies social and economic policy.
"There is a housing stock that is sitting vacant. There is a real opportunity here" to use those homes as rental property and solve both problems, Turner said.
President Obama's budget also seeks $1.8 billion for the construction of rental housing, which is the same amount Congress approved last year.
For a list of some of the best cities to rent in, check out this story.
Aaron Crowe is a freelance journalist in the San Francisco Bay Area. Reach him at www.AaronCrowe.net