...I watched a A documentary about affordable public housing, particularly the Section 8 Housing Voucher program, Poverty, Politics, and Profit (2017) – PBS/frontline. The documentary gave an overview of the affordable housing crisis and how some cities are growing the grows, the number of affordable homes is shrinking. This is a major issue for many low income families, especially after the 2007 housing crisis, over the last decade the average household incomes have declined while rents have been rising. There are more than 40,000 evictions are in Dallas every year and 2.5 million evictions throughout the country each year. The documentary followed a few different families who were in need of finding affordable housing and trying to do better...
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...through early 2004, the housing market was busting record rates in sales and the fast growth made housing prices soar to record highs. For example, the value of a home bought in late 2001, for a price of $290K, could well have the retail value of $340K by the middle of 2002, and by the following year could near double in value to an astonishing $460K or more. These out of the norm home values were driving people to suddenly sell their homes they had owned for years at double the original value, and make a nice profit to reinvest that money into a “dream home”. This also caused a swell of first time buyers to feel the need to quickly get in on the boom before it was impossible to own a home due to the price. The Fed Reserve set the stage for this boom and made this time frame an “anything goes” for the banking and investment community. In the late 1990’s through the early 2000’s, the U.S. economy was facing a mini recession and the tech industry’s dot com bubble popped; leaving Wall Street and it’s investors in a short fall. The Federal Reserve lowered interest rates to an all-time low, that hadn’t been seen in over forty years. Investment companies and banks were looking to get a higher return on their money and capital investments. Over the course of time, the Fed Reserve kept interest rates low. People started buying homes and the interest rates staying low caused a housing boom. The housing boom started the rise in housing prices. The rise in housing prices started people buying...
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...Reflection Paper Housing Crisis Frontline producer Michael Kirk tries to explain how the economy went so bad so fast. Why emergency measures by Federal Reserve Chairman Ben Bernake and Secretary of Treasury Henry Paulson couldn't manage to prevent the worst economic crisis in a generation. It was 2007 when the housing bubble began to burst and Wall Street started to panic. By spring of the following year, rumors began to swirl that prominent investment bank Bear Stearns was about to go bankrupt due to billions of dollars in bad mortgages. In the world of finance rumors can be the difference between success and failure. It was the beginning of a bad chain reaction, someone quoted in the clip “it was like a disease spreading quickly” Over the course of 24 hours, the stock market crashed and credit markets across the globe froze, effectively sending the economy into a downward spiral. It sent this huge confidence shock wave through the entire economy because all of a sudden, people were saying, "If two of the largest companies on earth can fail, that means anyone can fail." At that point, there is no company too large to not fail from the housing bubble Charles Duhigg. After exhausting all other options, Paulson personally called the CEOs of the nation's nine largest banks and told them to come to his office the next day at the Treasury building. Paulson gave each man a single piece of paper spelling out the conditions that said they agreed to sell shares to the government...
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...What provoked the largest financial crisis since the Great Depression? The answers include a diverse array of immediate and deeper causes in the housing and financial sectors of the U.S. economy. While the recessions initial spark was found in housing, U.S. government policy in addition to careless behavior on the part of both lenders and borrowers, along with poor corporate governance can be linked to the massive subprime loans that ultimately turned into the subprime crisis. Self-interest by subprime lenders and Government Sponsored Entities (Fannie Mae) are also liable for escalating the crisis. Among these factors, here I will mainly discuss three principal causes that have come to my attention; the housing price bubble, poor governmental oversee, and the subprime mortgage-lending boom that it fed. The Housing Bubble: From 1980 to 1997 the real price of housing in the United States had remained relatively stable. After controlling for inflation and differences in house size and quality, we still see that the average price of a home in 1997 was only 2% more than the average price one century earlier. This flat trend had ultimately ended beginning in the late 1990’s and early 2000’s. When the housing prices had peaked in 2006, the average price was close to twice the long-term average price from 1980 to 1997. Only six years later did the price return the long-term trend (Shiller Housing Price Index). The origin of the housing bubble is much similar to prior price...
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...In researching how information asymmetry played a role in mortgage defaults, I found at least two types of asymmetry. The first is between a home buyer and the mortgage company. The second is between the lender and the insurer. Although I have a mortgage of my own, I am not too familiar with all of the mortgage types and other background information. The information asymmetry between the home buyer and the lender is where the lender knows more about the financial history and type of loan that the buyer is taking out. For example, with an option ARM, the first couple years there is nothing or little owed on the principle, and some owners choose to pay nothing. But after that period of no principle due, the principle has increased and the owner cannot afford the mortgage. If the owner knew not paying any towards the principle would make it harder to pay later, they may have made different financial decisions. The other information asymmetry is between the lender and the protection seller (insurer). The lender had the information advantage on the buyers’ credit, and the insurer did not have the ability to evaluate the quality of the loan. The lender would screen buyers and decide to buy protection if necessary. But with buying protection via a CDS, the lender would screen buyers even less. When there were few mortgage defaults, the system was working, but as they increased, the system failed. Both of these examples of information asymmetry contributed to the increase...
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...to the Housing Crisis? “Worm or beetle - drought or tempest - on a farmer's land may fall, Each is loaded full o' ruin, but a mortgage beats 'em all” (Will Carleton 1845-1912). A mortgage is the greatest investment the average individual will make in their entire life-time. However, according to today’s standards, the true magic of a mortgage is not when one signs the note and mortgage but what the lender does with it after it has been conveyed. In almost every case after a mortgage is signed, it is almost immediately sold to the secondary market, this is where the loans become securitized. This is where most Americans believe is the root of our current housing crisis. This paper will analyze (1) why most Americans believe that loan securitization is the reason why we are in a housing crisis. (2) How lax screening processes by lenders played a part (3) Risky lending practices and (4) finally, the opposing views on securitization and our current crisis. Why do most Americas believe loan securitization is the problem? In most cases, when we can’t laugh at our mistakes, we have already started looking for someone to blame. In the case of our current mortgage crisis, we have engaged in a myriad of who’s to blame. Some say the lenders failed to properly screen borrowers, while others say the government protected the secondary market as they bought and sold one bad note after another. Most people believe that securitization started in 2004 and continued until the housing market...
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...THE FUTURE OF FORECLOSURE LAW IN THE WAKE OF THE GREAT HOUSING CRISIS OF 2007-2014 Clinical Professor of Law Notre Dame Law School Judith Fox 54 WASHBURN L. J. (forthcoming, 2015) Notre Dame Law School Legal Studies Research Paper No. 1504 A complete list of Research Papers in this Series can be found at: http://www.ssrn.com/link/notre-dame-legal-studies.html This paper can be downloaded without charge from the Social Science Research Network electronic library at http://ssrn.com/abstract=2573203 Electronic copy available at: http://ssrn.com/abstract=2573203 The Future of Foreclosure Law in the Wake of the Great Housing Crisis of 2007-2014 Judith Fox* ABSTRACT As 2014 came to an end so, perhaps, did the worst foreclosure crisis in U.S. history. On January 15, 2015, RealityTrac, one of the nation’s leading reporters of housing data, declared the foreclosure crisis had ended. Whether or not their declaration proves true, the aftermath of the crisis will be felt for years to come. During the crisis it is estimated more than five million families lost their homes to foreclosure. Federal, state and local responses to the crisis changed laws and perceptions regarding foreclosure. Despite these changes, we end the crisis much the way we began---with a nationwide foreclosure system mistrusted and disliked by lenders and consumers alike. This paper examines the responses to the crisis in an effort to determine what worked, what did not, and where foreclosure law should...
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...Images such as an ambulance careening down the highway, lights flashing and sirens wailing, or a city block filled with riots and turmoil, are what comes to mind when one thinks of the word crisis. In the minds of many, crisis is synonymous with chaos. The Asheville housing crisis, however, is a crisis of a different nature. It is a silent crisis, one that is the affecting the lives of countless households throughout Asheville. Despite these widespread effects many citizens are turning a blind eye to this crisis, as it is not loud or chaotic one. The housing crisis in Asheville exists as a constant state of a shortage of affordable housing. Affordable in this statement is the key word, as many houses are being developed regularly that sell...
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...What have you discovered about how you construct your own mental model & ladders of inference on issues and phenomena in general. Upon reflecting on how the use of mental models and the ladder of inference affected my handling of a problem regarding incentives, I was forced to conclude that it made me more disciplined and logical. I found that the use of mental models gave me a greater awareness of the economic, psychological and sociological incentives and motivations that define people’s actions. A particularly good example of this is how I was forced to reconsider my views on the long term unemployed. I come from a middle class background with a strong business ethos in my family. It is undeniable that this led to me being engrained with the impression that if people are unable to find work, it is due in part to a lack of initiative. The discipline that the use of the ladder of inference forced on me led me to realize that it is possible for people to become locked in to a cycle of poverty through a lack of incentives being provided to them. If people are not provided with means or incentives, it is very hard for them to improve their lives. What do you feel easy & hard? Additionally, I feel that the project regarding incentives crystallized some thoughts regarding my previous work in car sales that lay unformed till now regarding the unrecognized importance of incentives. In my time working in the industry, I was continually surprised as time after time, people purchased...
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...Impact of different window types in regulating natural ventilation of residential buildings of Dhaka, Bangladesh |Md. Nymul Haque¹ |Jinia Sharmeen² | |haque.nymul@gmail.com |jinia_lima@hotmail.com | Abstract Natural ventilation is most desirable for cooling and providing fresh air in residential buildings for better indoor air quality and thermal comfort. The natural ventilation performance is affected by a combination of internal and external factors. External factors include the location, the orientation, the prevailing wind speeds and the building forms of the residential development, which are subject to constraints beyond the control of site planners and architects. Whilst for internal factors like the openings configurations and window types, site planners and architects are always given free hand for a proper design. Dhaka, a city in the Tropics, has become such a city where with rapid urbanization users are moving towards mechanically ventilated buildings putting ever increasing demand on the dwindling energy resources. This paper focuses on the influences of window types on the natural ventilation of residential units in Dhaka in order to improve quality of indoor living environment. Primary objective of the study is an attempt to investigate...
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...History The area first developed about two hundred years ago in what was then the village of Holbeck. Activities such as flax spinning, iron casting and machine manufacturing were carried out in a range of steam-powered mills and workshops. Interspersed amongst these mills and factories were hundreds of families living in poor conditions in back to back houses. Why was an urban village created? The northern part of Holbeck is an area that is in need of major regeneration and in which there is now strong developer interest. It is also an area that is of great importance both historically, as the cradle of the industrial revolution in Leeds, and architecturally, with two conservation areas and a number of listed buildings including the Grade I Temple Works. The special nature of this area merits a special response from developers that respects the scale and quality of its important buildings, the diversity of the area and its potential to develop into a sustainable community. It was clear from the early schemes to re-develop the area a decade or so ago that this was not happening and that the special quality of the area was being lost. In order for the future of Holbeck to be sustainable, the traditional principles of a village, which include a mixture of living, working and recreational opportunities, need to be adopted. It appeared to be appropriate to regenerate the area as an urban village and the Urban Villages Forum (which promotes urban villages) confirms this. The area...
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...The True Face of Los Angeles: Homelessness Marqueta Oliver BSBO1ELEG6 10/29/2014 Paul Korzeniowski The True Face of Los Angeles: Homelessness Even though some people believe that tourism is a more important focus in Los Angeles than poverty, Homelessness is a crisis in Los Angeles because it affects everyone and reducing homelessness will improve the economy. Homelessness in our nation affects our, communities, economics and families at large. Being a native Angelino, I grew up not realizing that homelessness is an epidemic. I did not understand why there were so many homeless people, nor did I think of seeing panhandlers asking for money and food as a crisis, but I viewed it as “normal”. I always knew local transients by name and would try to help with spare change or a meal when I could. I had no idea of the staggering statistics of homelessness in my community; I didn’t understand the effects of homelessness on our economy and that the alarming rate of poverty level in my metropolitan city, affects us all. By focusing more attention, resources and time to housing our poverty-stricken communities in the long run it would cost less and would also create a more humane society. In the beautiful city of Los Angeles, tourists from all over world fill the cities top attraction sites daily. What most tourist may not know is that every morning before dawn, Los Angeles has a long history of using police to control public spaces by limiting the appearance of homelessness...
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...INTRODCTION Housing is both a social good, providing core security for families, neighbourhoods, societies and communities and an economic good stimulation growth and development. The country faces acute housing shortage with a deficit of over 1 million housing units in the midst of rapid population growth and rising urban population. It is common knowledge that the Housing deficit in Ghana now stands well over one (1) million houses. To address this deficit and accommodate new households, there is the need for an annual delivery of about 150,000 units for the next 20 years. GREDA PROBLEM DEFINITION The rate of construction of homes for a number of reasons has fallen behind the growth of population in general and the number of people entering the working class. This has created a big deficit in the country's housing delivery system, particularly in the urban centers. Needs assessment survey conducted in the housing sector in the 2000's was conclusive that the ideal housing properties on high demand are 2-4 bedroom houses in view of the large family size they tend to have. The trend in population growth coupled with the rising cost of building materials has shot up the prices of houses and rent chargeable is exorbitant. The size of the market for residential properties is large as it covers Ghanaian national's resident abroad. The general consensus is that the houses constructed are of poor quality and the finishing fall short of the dream houses that potential homeowners are...
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...countries or economies that have housing policies or measures to stabilize the housing markets. Provide your views or suggestions on the best measure to stabilize the housing markets that could be considered or used in Melbourne. In 2013, Melbourne’s population was 4.3 million. By the year 2030 Melbourne’s population is set to reach 6 million and by 2051 the population will jump to 7.8 million. With population growth of this magnitude the demand on housing will undoubtedly increase. In 2014, in his opening remarks at the Bundesbank/German Research Foundation/IMF Conference, Mr Min Zhu, Deputy Director of the International Monetary Fund (IMF) stated remarked: “Housing booms have different characteristics across countries and time periods. What is common is that when the bust comes, it very often damages financial stability and the real economy. The tools for containing housing booms are still being developed. The evidence on their effectiveness is only just starting to accumulate. The interactions of various policy tools can be complex. But all this should not be an excuse for inaction. The interlocking use of multiple tools might overcome the shortcomings of any single policy tool.” Indeed, as there are no magic bullets to ensure a stable housing market, it is prudent to therefore to review differing policies that are currently used by other countries to help stabilize their housing markets. In the paragraphs bellows are housing market policy examples or measures...
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...Individuals described as chronically homeless are those with a protracted homeless experience whose stays in the homeless system or on the street are both frequent and long. People that are homeless are reflective of every population demographic. There is no single path to homelessness, and despite stigmatizing images, no single stereotype fits. Individuals that are chronically homeless represent a range of individual vulnerabilities and face a many of systematic barriers that impede accessing adequate housing and services. Current economic climate presents the chance for homelessness to remain high (Coalition for the Homeless, 2002a). According to research, a substantial reduction in the occurrence of chronic homelessness could be achieved by linking affordable housing with treatment and support services. Alcohol and substance abuse is known as both a precipitating factor and consequence of homelessness can effect an individual’s ability to retain housing or limit housing options offered by programs requiring sobriety, and mask underlying or related mental health issues undetected or untreated in addiction treatment programs (Zerger, 2002). Individuals who have co-occurring disorders (COD) are particularly vulnerable to homelessness caused by more severe psychiatric symptoms, self-medication with drugs and alcohol, and frequent contact with the criminal justice system. Typically, once homeless, individuals with COD will have greater problems, need more help and...
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