Big news out of Washington: Fannie Mae and Freddie Mac – which many (including me) think were at the heart of the financial collapse, and currently have some stake in the vast majority of post-crash mortgages – may be getting wound down soon. This NYT is reporting that the Obama administration may be releasing three plans at the end of the week, and the preferred (!) one is to shut down the two lenders entirely.
These lines also stood out to me:
Representative Scott Garrett, the New Jersey Republican who is chairman of the House subcommittee that deals with housing finance, on Monday told a mortgage conference in Florida that the government should leave the mortgage business.
“I believe that, if there is to be any government assistance to homeownership, it should be limited to first-time homebuyers or rental housing,” Mr. Garrett said.
Note that “rental housing” isn’t “homeownership” at all.
Personally I think it’s a good idea to get the government out of encouraging homeownership entirely, on the grounds that homeowners are more likely to be in the perverse position of wanting the cost of housing – a basic expense for everyone – to go up, resulting in pervasive government interventions like anti-density zoning and blowing up the housing bubble. But even beyond this indirect sprawl promotion, they have inherent anti-density biases like their refusal to fund small mixed use projects.