The Democrats have demonstrated a more activist housing program than the Republicans. They want more government involvement. They want more government subsidies. They want more government direction of the free market. But both parties have been sobered by the housing boom and crash and large swathes of both parties want to leave housing to recover on its own. With enormous budget deficits, government doesn’t have much room to operate here.
Kenneth R. Harney reports: Call it the political elephant in the room: 1.2 million families across the country are at some stage of foreclosure, 3.8 million homeowners have been foreclosed upon since September 2008, 11.4 million are underwater on their mortgages and $6.5 trillion in home equity has been lost by owners since 2005.
Moreover, home building and sales are intimately linked with job creation. Yet the subject of housing policy was virtually a no-show at the Democratic and Republican conventions and in the party platforms.
Given the huge impact that the housing and mortgage crashes have had on millions of voters and workers, you would think housing would have been high on both parties’ priority lists. They’d say: OK, here’s how we’re going to turn this crucially important situation around — getting builders building again to pre-boom historical levels, helping out the good folks who paid their loans on time even when underwater, plus making sure that banks make loans available to creditworthy buyers who want a mortgage rather than penalizing them for the banks’ mistakes.