New Approach to Foreclosed Homes

A while ago I discussed the City of Milwaukee selling foreclosed houses that they own to Gorman & Company, who then will use tax credits to rehab the properties and rent them out.  Since then, the City has entered a similar agreement with developers Maures and Brinshore.

Now the federal government is getting into the action-sort of.  They're looking at ways to convert foreclosed houses into rental housing, and easing the pressure on home sale prices that are depressed by the glut of foreclosed homes on the market.

I'm of mixed feelings about this.  On one hand, actions like what the City has done, and what the federal government might do, could be seen as subsidies to investors.  With the City, because of the involvement of tax credits from the state, it's a double bonus; they get affordable rental housing, and they get run-down houses that will be rehabbed and improved, as well as maintained for the next thirty years.

But a program like the City's is unlikely to be replicated on a national level, which means that there likely will be no affordability requirements, and who knows what will be involved regarding maintenance.  This could very well end up being a new generation of slumlords who put the bare minimum into the properties.  There'd have to be some kind of upkeeping requirement and oversight, which won't be popular.