How to Fix the Housing Mess: An Alternative to Dean Baker
espite the large number of people who lack adequate housing and rents that make decent housing unaffordable, the Wall Street Journal’s Holman Jenkins suggests housing demolition as a way to eliminate the excess supply of “homes going rancid on the shelf.” As discussed in
New York, inspired by Roger Starr, engaged in the planned shrinkage of New York, which meant letting houses burn in poor neighborhoods, which inspired arson, which helped to clear out neighborhoods for developers.
This kind of logic might even lead to reducing unemployment by ….
Jenkins, Holman W. jr. 2008. “How to Shake Off the Mortgage Mess.” Wall Street Journal (30 July): p. A 13.
Jenkins reports: “The Economist, in its July 10 edition, endorsed a
“wrecking-ball response.” Bill Gross, the Pimco bond king, says in an
ideal world Washington would “buy one million new/unoccupied homes, blow them up, and then start
all over again”.”
“… a relevant policy would consist of judiciously buying unsalvageable houses and
demolishing them. Fannie and Freddie’s strength is housing market software:
They could be put to work devising a least-cost, maximum-bang strategy for
demolishing unoccupied homes to preserve as much value as possible for the
homeowners and mortgage creditors who remain.”