I'm surprised I haven't seen this mentioned on DailyKos anywhere yet.
Today, In the New York Times, an op-ed appears by Paul O'Neill, former chairman of Alcoa, who was the secretary of the Treasury from 2001 to 2002.
It's titled "Tear Down That House." In it, he proposes that "the federal government should reimburse cities and towns who hire people from the unemployment rolls to tear down these structures, clean up the properties and, if there is no immediate buyer for them, to turn them into green spaces."
If you'd like to read the column (it's pretty short), it can be found at: NY Times Op-Ed Article
So... my initial and only response is... WTF?!? In America, where we have approximately 800,000 homeless people, it somehow makes sense to tear down abandoned houses? Because there are no "immediate buyer[s]" for them?
There's no "immediate buyer" only because the banks haven't been willing to take the losses yet! (And because they're busy tracking down the hundreds of chopped bits of title that have been repackaged and resold in derivatives.) If there's no "immediate buyer," I can just about guarantee it's only because the property hasn't been listed at the right price yet.
There are lots of people wanting to buy and move into a house; after all, that concept has been sold for generations as the single biggest material key component of "the American dream." Too many people just can't afford single-family housing yet, because houses still cost too much (in terms of percentage of monthly/annual income, as well as in the good credit score needed, and heft of downpayment required). There's plenty of demand! Just not at the current price points, given the current unemployment rates and (downward) wage pressure problems.
There are two better solutions. The first would be to raise the area's overall wages and employment, preferably NOT by tearing down houses. This can be accomplished, at least partially, by making offshoring more painful (expensive) to large companies, as well as by offering tax breaks to all companies that create new, permanent, full-time positions (sliding scale; smaller the company, bigger the tax break). How about creating jobs by weatherizing existing homes, with that crucial step making them more attractive to home buyers?
The second suggestion is to adjust the damn price of the house downward. Then you'll see buyers lining up - even if it's only to buy a fixer-upper house for $50,000 that would have gone for two, three or four times that amount only two years ago.
I have no doubt there may still be too much single-family housing out there to be sustainable in the long term. After all, how many 4000 square foot McMansions does any metro area need? But geez, that doesn't mean it's time to tear houses down! How inefficient - all those materials put into building a house, only to tear it down because the banksters won't sell it for what buyers are willing to pay?!?
Can someone enlighten me? Is there some tax or business advantage to writing off a piece of real estate entirely, rather than taking a partial loss on it? I keep thinking there's some piece of the puzzle I must not be seeing clearly...