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The Housing Crisis is Getting Worse

Down payment is out of reach for many
Homes Out of Reach for Many

While Republicans are doing everything they can to make the rich richer, middle and low income families are having a harder and harder time buying a house.  The majority of jobs are in the urban areas.  Big businesses want to be located in cities so they have a large pool of workers to choose from  People move to cities to be part of those pools to have a better chance of getting a job that pays a decent wage.  Those people need places to stay.

The housing and rental industry will always aim for the highest price the market will bear.  That’s to be expected.  But the market price in a lot of the big cities has become the high end of the middle class.  That makes it difficult if not impossible for anyone below that level to be able to buy a house.  There are many areas that are even pricing apartments out of the reach of a lot of people.

One answer to the problem would be to put caps on the prices the two industries are able to charge.  That may be an answer but our country does not believe in that type of approach.  While we do believe in some regulation, in general, we believe in the value of our free market.  So what other options are there?

The reality is a very large segment of our society can’t afford to cover a $500 emergency.  But just because many businesses won’t pay a living wage doesn’t mean workers in those industries are not responsible.  A lot of those people pay their bills, including rent, on time, all the time.  One of the biggest obstacles for them being able to get a house is coming up with a down payment.

How do people, who can’t afford a $500 emergency, come up with $10,000 or more to put down on a house?  A down payment on a home is supposed to make people less willing to walk away from that loan.  There is truth in that but if the intent is to protect the loan shouldn’t a stable history of payment work just as well?  When you have a family that has lived in a $1300 a month apartment for the last 10 years and who has a history of paying their rent on time why shouldn’t that history count in their favor?  Why shouldn’t their proven stability be able to replace the need for a down payment?

You can receive the down payment as a gift but how many of those people, who can’t afford to come up with a down payment on their own, have family or friends who can afford to gift them a down payment?  And there are all kinds of rules on down payment gifts depending on what type of loan you are trying to get.  Mostly, being able to receive a down payment as a gift is excellent for people who already have money.

Maybe it’s time we also find a way to give people who aren’t rich, a break.