Download the memo (pdf)
Today the Center for American Progress released a new memo, “An Untapped Source of Green Rental Homes,” that proposes a targeted program to convert already-foreclosed homes owned directly by the federal government into thoroughly energy efficient, affordable rental homes.
Rather than sell these homes “as-is,” and at a considerable loss to the Federal Housing Administration and taxpayers, this program would strategically aggregate houses by location and rehabilitate and retrofit them using clean-energy technologies. Instead of selling them off individually to homeowners—who have many other foreclosed properties to choose from—FHA would rent these houses at affordable levels to families in need of suitable housing. Once a local portfolio of homes is fully leased up, the FHA would then sell the portfolio of rental properties to private investors. The cash flow from the rents translates into greater property values than would be obtained by selling with homeownership in mind.
Mortgage relief programs initiated by the Obama administration and Congress are making a difference in the foreclosure crisis, but Andrew Jakabovics, Associate Director for Housing and Economics and author of the memo, believes that policymakers need a few more arrows in their quiver to address the housing crisis and stabilize communities.
Here are a few of the many benefits such a program would produce:
- Taxpayer losses are minimized when the foreclosed properties are sold by recognizing there is more value in the foreclosed properties as rental units rather than owner-occupied houses.
- Well-paying jobs are created through the process of rehabilitating these homes.
- Moves a greater share of the nation’s housing toward a lower carbon footprint by retrofitting these homes to be more energy efficient.
- Increases the supply of affordable rental housing and helps rebalance housing policy to help meet the needs of families not ready for homeownership or who are no longer deemed creditworthy because of a previous foreclosure.
- Injects private capital into the real estate market in a productive way.
Download the memo (pdf)
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