The Broader Market

by Alon Cohen, Jordan Eizenga, Bracken Hendricks, John Griffith, and Adam James

Half a million houses, many of them vacant and deteriorating, are languishing in a bloated U.S. real estate market, threatening to turn some cities into ghost towns, undermining the stability of working families, and proving to be an anchor on a shaky economy. Many of these vacant homes, nearly a quarter-million, are controlled by the federal government.

If the situation wasn’t already bleak enough, there are also more than a million additional American homes saddled with delinquent mortgages that are in the process of foreclosure. Chances are many of these homes will also end up as the property of the federal government. The only way to lower the inventory of decaying homes is to find a use for the ones we have before new ones swell the pool. Without assistance, the current “overhang” of foreclosed homes is expected to take four years to work back into the market.

The good news is the Obama administration and independent federal regulators are formulating plans to sell government-controlled foreclosed properties to investors who would bring them onto the rental market. (For more, see here).

by Jordan Eizenga

Our still-ailing housing markets need all the first-time homebuyers and affordable rental housing investors we can find. The New Issue Bond Program, which the Department of the Treasury launched in 2009 to help state and local housing finance agencies continue financing housing for working families during the housing crisis, is set to expire at the end of 2011. The program’s imminent expiration threatens access to affordable rental housing and homeownership for many of those hardest hit by the housing crisis.

Fortunately, Treasury has the authority to extend the program beyond its current deadline. With half of all American renters devoting more than a third of their income to housing alone, and with private lenders writing off struggling communities and households that the housing finance agencies are uniquely able to serve, Treasury should extend the existing authority of the New Issue Bond Program so that it remains available through at least the end of 2012.[1]

For more of the article, see here.

The following is a great article calling on the Obama administration to be bold in its job creation agenda. Enjoy.

by Michael Ettlinger, Donna Cooper, Sarah Rosen Wartell, and Bracken Hendricks

When President Barack Obama announces his jobs plan in September, it should be a plan that matches the scale of the problem. With millions unemployed and job creation sluggish, this is not the time to be timid.

In particular, the president needs to offer much more than proposals that conservatives in Congress might support—tax cuts that wouldn’t be nearly as effective as the alternatives. The president’s proposals also will have to go well beyond simply extending provisions such as payroll tax cuts that are set to expire. With millions of unemployed Americans, the plan needs to be one that will improve the economy, not just tread water. And the plan needs to create jobs fast, not just lay the groundwork for jobs in the future.

In short, the plan should be a sharp contrast to the economically nonsensical agenda his political opposition is passionately arguing for. The idea that simply slashing government programs and taxes is the key to economic success is a tried and failed strategy. The tax system we have now is a tax system inherited from President George W. Bush. We’ve seen the results. Economists across the political spectrum agree that spending cuts in a weak economy run counter to everything we know about getting a country out of an economic hole. President Obama should not meet halfway those who only offer economic incoherence. He should take them head on.

For the rest of the article, see here.

by Donna Cooper and Jordan Eizenga

The Environmental Protection Agency estimates that over the next 20 years, more than $600 billion in water system infrastructure improvements will be necessary. Much of the cost of these improvements will be borne by consumers. But state drinking and clean water revolving loan funds do subsidize a portion of the project costs by offering low-interest loans to water authorities and water companies for these improvements.

For the rest of this article, see here.

by Donna Cooper and Jordan Eizenga

We will need to invest at least $636 billion over the next two decades to keep our water systems in safe working, according to EPA estimates. That could mean Americans will pay higher water bills in the coming years. But we can curb that increase if clean water and drinking water state revolving funds—the vehicles through which most water infrastructure investment is done—make better use of their existing resources.

For the rest of the article, see here.