Want to fix America’s housing market and economy fast? Demolish a million of the now-unwanted houses America built during the housing boom. As the Economist, PIMCO’s Bill Gross, and the Wall Street Journal’s Holman Jenkins have observed, this would:
- Reduce the bloated inventory of houses for sale
- Shore up pricing and demand for the remaining houses on the market
- Relieve municipalities of the costs of maintaining unoccupied real estate
- Limit the losses of banks paying taxes and maintenance on foreclosed houses they can’t sell
- Reduce neighbourhood blight as vacant houses fall apart
- Give construction companies something to do (demolishing)
- Accelerate the demand for new construction (giving construction companies more work)
- Create and/or save jobs (demolishing/construction/retail/home-supply)
- Accelerate the economy’s recovery.
In fact, the only downside would be having to stomach the sickening waste of labour and resources that went into building the houses in the first place.
This would be the physical-world equivalent of Merrill Lynch unloading its CDO garbage for pennies on the dollar, thus accelerating its own recovery. It won’t happen on a national level–the national embarrassment would be too much to take–but it could begin to happen on a local level: cities and towns demolishing rather than maintaining abandoned real-estate.
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