Northeastern professor suggests new “stimulus” plan

Just because you’re a professor doesn’t mean you know what’s good and what’s bad for people.

Case in point?

Barry Bluestone, dean of Public Policy and Urban Affairs and member of the Kitty and Michael Dukakis Center for Urban and Regional Policy at Northeastern University (what used to be “CURP”), spoke out this week about the Boston Foundation’s 2009 housing report card, which he co-wrote.

Bluestone says that rents were up 11 percent this spring compared to the second quarter of 2005, according to a story on WBUR.

This is going to cause continuing problems for Boston and the Commonwealth.

“The Third Civil War’s going to be what regions of the country, what metro areas, what states can retain and attract young people,” Bluestone said. “Housing costs (and) rents are going to be a critical decision in where people decide to move, where people decide to remain. If we can’t solve our housing price and rent problems in the future, we’re going to lose that civil war.”

I don’t have a problem with the veracity of his data – its seems to be accurate – it’s what he thinks should be done as a result that I have a problem with.

1) For a short-run fix to rising rent, Bluestone recommends expanding voucher programs to help people pay the rent;

2) He advocates federal legislation that would allow new homebuyers to purchase home insurance from the federal government; if a homebuyer is forced to sell the house after three years and ends up taking a loss, the government would insure 90 percent of the loss.

Huh? Both of these would artificially inflate prices for what is, to most people, an already inflated product – housing. The “short-term” fix to high rents would do nothing to bring down cost – how does that even make sense? It puts more money in the pockets of landlords for basically doing nothing.

Insuring people against loss on their home purchases seems outright anti-capitalist to me. Almost offensive, in fact! There was no guarantee that prices would go up when I bought but I bought anyway.

Increasing down payment minimums for first-time homebuyers (or everyone) would mean owners could sell three years from now and still not have to write a check to the bank. That would solve that problem.

It seems that, whatever the problem, Barry Bluestone thinks government intervention is the solution. He fails to see how an open- and free-market would solve the problem.

Housing too expensive?

Increase supply.

Related posts:

1. Depressing: Boston-area housing costs still high
2. China Gov’t stimulus plan: $1 billion new city, no people
3. MA Governor’s legislation will preserve affordable housing for many
4. Tishman Speyer returns massive NYC apartment complex back to creditors
5. Boston: We’re #4! – MA owners have high-level of equity in their homes