Nationalization of Property Management

It appears that each day brings more and more debate about how to convert houses and condos to rental units and who would bear the risk in so doing. As I stated in my earlier post, it would be much more efficient for property management corporations to manage much of the foreclosed property as opposed to financial institutions that know little to nothing about property management. In turn, the banks would be able to free up their balance sheets by moving uninhabited properties to corporations that actually have a vested interest in seeing these properties inhabited and taken care of. This would at a minimum separate the property management issue from the financing issue, the former of which has much more of a significant and immediate effect on housing prices and community welfare.

Of course, the problem remains that property management corporations can't raise sufficient capital to buy up properties at reduced prices from banks and the government lenders, Fannie and Freddie. In other words, the federal government shouldn't be capitalizing banks or Fannie and Freddie since these entities have no interest in owning and managing property. The federal government should instead be capitalizing the people and the corporations with an interest in owning the property.

The Obama Administration has begun to do just this with regard to individual homeowners, but what really needs to happen is for the Obama-ites to have the political epiphany that the majority of Americans should not and should never have been in the business of owning homes, and that instead, corporations with diversified shareholders should own and manage these properties.

I'm not arguing that no one should be allowed to own home, but that whoever owns a home should be able to bear the financial risk of owning that home. If one cannot bear that risk without relying on the American taxpayer for assistance, then that person should have never been given a loan to buy in the first place and ought to be renting from a corporation with many diverse stakeholders and properties.

Chicago Trib's story on foreclosure blight

NPR story about benefits of renting