The Broader Market

by Alon Cohen and Jordan Eizenga

The federal government is holding a significant number of foreclosed properties from mortgages it guaranteed before the housing bubble burst. The weak housing market would surely yield depressed prices if the government were to sell off these properties en masse. So what should we do with our growing stock of foreclosed homes? And can we put Americans back to work in the process?

Here’s what we propose: Institutions that hold tens or hundreds of thousands of these properties—both private institutions and those backed by the government, such as Fannie Mae, Freddie Mac, and the Federal Housing Administration, or FHA—should rehabilitate, retrofit, weatherize, and rent them or sell them to investors.

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