Getting rid of houses

Although this may come as a surprise to some people, we have too many houses in the U.S. right now.  The boom in real estate prices lead to builders producing more houses than the market needed, which means that houses are standing empty, waiting for someone to buy them.  At the same time, people are losing homes to foreclosures, which puts more houses on the market.

The Troubled Asset Relief Program, or TARP, was created to buy up bank assets that had lost value, but so far, the money has not been used that way.  I purpose that we put some of what remains of the TARP funds into buying houses, and then trading those houses to lower income people who live in old, inefficient houses, which waste a lot of energy.  The old houses would be torn down, and the land sold to repay some of the cost of the program.

This would create some demand for new houses, while removing some of the most inefficient homes from the market.  Houses which are not structurally sound should not be upgraded in energy efficiency, but simply removed from use.  As the worst homes are often rental units, the owners would probably be willing to swap for newer houses which are energy efficient.

Somehow, we have to remove nearly a million houses from the market if home prices are to stabilize at anything near what existing houses are worth.  Otherwise, the over supply will drive prices to artificially low levels, wiping out most of the value that houses still have.  We could use this opportunity to remove some of the worst, most inefficient housing from the roles through a property swap financed by the governments Troubled Asset Recovery Program.

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