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Tuesday, October 30, 2007

Groping for Alternatives to the Housing Mess

From today's headline, "Home Prices Fall in August for 8th Month," we can see that cutting interest rates is not exactly helping ease the housing meltdown. I think we should be exploring alternatives. Dean Baker of the CEPR has an idea with "Own to Rent".

I find his plan interesting, though I don't like the part about giving renters leases "forever." That's restraint of trade for one thing, along with making people permanent landlords when they never wanted to do such a thing AND potentially prolonging a new kind of housing crisis. Still, Mr. Baker's plan has some interesting ideas -- maybe it could be fixed with long-term (as opposed to "permanent") leases. And that's my point -- I think we should be exploring alternatives, because cutting interest rates isn't the panacea it's supposed to be.

Meanwhile, some parts of the world are still having
massive real estate booms.
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